Economic Benefits of the Exelon Pennsylvania Nuclear Fleet





Contents

EXECUTIVE SUMMARY ................................................................................................................................................................. 1

SECTION 1: INTRODUCTION .................................................................................................................................................. 3

SECTION 2: THE EXELON PENNSYLVANIA NUCLEAR FLEET ..................................................................................... 5

SECTION 3: ECONOMIC AND FISCAL IMPACTS ..............................................................................................................11

SECTION 4: ADDITIONAL BENEFITS PROVIDED BY EXELON PLANTS ..................................................................25

SECTION 5: NUCLEAR INDUSTRY TRENDS......................................................................................................................29

SECTION 6: ECONOMIC IMPACT ANALYSIS METHODOLOGY ................................................................................35


3
Economic Benefits of the Exelon Pennsylvania Nuclear Fleet


4

Economic Benefits of the Exelon Pennsylvania Nuclear Fleet
Executive Summary

Exelon Corp. owns and operates three nuclear plants in Pennsylvania: Limerick Generating Station in
Montgomery County, Peach Bottom Atomic Power Station in York County and Three Mile Island Unit 1
in Dauphin County. All three plants play integral roles in their local and state economies. The plants
generate low-cost electricity and make purchases that have stimulated their respective local economies
since beginning commercial operation.

Besides economic output, the plants provide jobs, labor income and tax revenues, as well as important
intangible benefits, such as environmental stewardship, community involvement, and stable, affordable
electricity prices. The economic impact of Exelons Pennsylvania nuclear power plants reaches beyond
their local communities to the state and nation.

Although this report highlights local economic benefits to each stations host county, it does not include
the specific economic benefits to other counties within 10 miles of each station (see Figure 2-4), some of
which are substantial. In addition to Montgomery County, Limerick makes a positive economic impact
on Chester, Bucks and Berks counties. At Peach Bottom, other counties reaping benefits include
Lancaster and Chester counties in Pennsylvania and Cecil and Harford counties in Maryland. And Three
Mile Island provides benefits to Lancaster, Lebanon, Cumberland and York counties. These additional
benefits are included in statewide economic results.

In 2004, the operation of Limerick, Peach Bottom and Three Mile Island increased Pennsylvanias
economic output by $229 million, including $5.8 million in Dauphin County,

$13.6 million in
Montgomery County and $6 million in York County.

Adding the direct value of each plants electricity generation brings the economic output attributable to
Exelons Pennsylvania nuclear plants to $2.6 billion for the state, and $383.6 million, $981.5 million, and
$947.3 million in Dauphin, Montgomery and York counties, respectively.

The operation of Exelons Pennsylvania nuclear plants and their secondary effects accounts for more than
4,000 jobs in the state. These include 275 jobs in Dauphin County, 385 jobs in Montgomery County and
319 jobs in York County. These jobs result in

$293.1

million in earnings to workers living in
Pennsylvania.

Exelons nuclear plants in Pennsylvania employ 1,903 people (excluding security personnel). This total
includes 208 Three Mile Island employees living in Dauphin County, 253 Limerick

employees residing in
Montgomery County and 248 Peach Bottom

employees

living in York County. These jobs pay
substantially higher salaries than the average salary in the three counties.

The Exelon nuclear plants principal expenditure within their local communities is employee
compensation. In 2004, the plants paid an average of $27 million in compensation to employees living in
their host counties, and a total of $214 million to employees living in Pennsylvania. Economic activity
created by the plants accounted for an additional $78.7 million in the state.

Exelon makes substantial purchases in each plants host county. In 2004, the Limerick, Peach Bottom
and Three Mile Island plants made local purchases of $11.8 million, $1.7 million and $2.4 million,
respectively. Purchases by all three plants totaled $76.2 million in Pennsylvania and $479.5 million in the
United States. Economic activity generated by the plants purchases and operation also led to an average
of $8.5 million in increased output in each county.

1 Economic Benefits of the Exelon Pennsylvania Nuclear Fleet

The three plants generate nearly $6 million in state and local tax revenue each year. Adding the economic
activity generated by the plants through increased business, corporate, payroll and personal taxes results
in a total state and local tax impact of $19 million.

Besides their economic benefits, the plants generated about 45.4 million megawatt-hours of electricity in
2004. This low-cost electricity helped keep energy prices affordable in Pennsylvania. In 2004, the
average production cost for the three plants was 1.15 cents per kilowatt-hour, compared with an average
production cost of 2.47 cents per kilowatt-hour for the rest of Pennsylvania.


2 Economic Benefits of the Exelon Pennsylvania Nuclear Fleet
Section 1: Introduction

This economic impact study, conducted by the Nuclear Energy Institute
1
(NEI) examines the economic,
fiscal and other benefits provided by the nuclear generating facilities owned and operated by Exelon
Corp. in Pennsylvania. These plants include Limerick Generating Station in Montgomery County, Peach
Bottom Atomic Power Station in York County and Three Mile Island Unit 1
2
in Dauphin County. This
study analyzes the economic and other benefits that these plants provide to Dauphin, Montgomery and
York counties, as well as Pennsylvania and the United States. The analysis uses detailed data provided by
Exelon to assess those benefits.

Although this study focuses primarily on economic benefits to the local communities in which the plants
reside, it also calculates state and national benefits. Benefits to other counties near each station, which
can be substantial, are included in the state benefits calculation. These benefits include direct impacts
such as employment, expenditures within the community and corporate tax paymentsand indirect
impacts, including jobs and money generated indirectly by plant expenditures in the local economy. The
study also discusses other benefits provided by the plants, such as reliable, low-cost electricity, the
benefits of an emission-free source of electricity and environmental stewardship.

Exelon Corp. and NEI cooperated in developing this study. Exelon provided data on employment,
operating expenditures and tax payments, as well as guidance on particular details specific to the counties
and the plants.

NEI coordinated the project and applied a nationally recognized model to estimate the direct and indirect
impacts of the plant on the local community. RTI International, a nonprofit research organization in
Research Triangle Park, N.C., developed the methodology employed in this analysis, the ninth such study
conducted by NEI.

The remainder of this report contains five sections:

Section 2 provides background on Limerick, Peach Bottom and Three Mile Island 1, including
generating costs, employment, plant history and performance, taxes, and local area details, such
as total employment and earnings, as well as regional electricity prices.
Section 3 examines economic and fiscal impacts of the plants at local, state and national levels.
Section 4 provides data on benefits not captured by the model, such as the plants contributions to
the community and the environment.
Section 5 outlines recent trends in the nuclear energy industry as a whole, including cost,
performance and safety.
Section 6 discusses the methodology used to complete the study and Impact Analysis for
Planning, the economic modeling software employed as part of this effort.


1
The Nuclear Energy Institute is the policy organization of the nuclear energy and technologies industry and
participates in both the national and global policymaking process.

2
This study includes only Three Mile Island 1. FirstEnergy owns the non-operating Unit 2 and maintains a small
contingent of workers at the site. This study excludes any economic impact of FirstEnergys activity at Three Mile
Island.

3 Economic Benefits of the Exelon Pennsylvania Nuclear Fleet


4 Economic Benefits of the Exelon Pennsylvania Nuclear Fleet
Section 2: The Exelon Pennsylvania Nuclear Fleet

This section provides background information on Exelons Pennsylvania nuclear plants to frame the
results of this report, including a brief history of the plants and data on their cost, employment, performance
and taxes. This section also provides details on D