EDF, Citing Shale Gas, Exiting U.S. Nuclear Investments

Electricité de France, S.A. (EDF) has moved to exit its investment in Constellation Energy Nuclear Group LLC (CENG), its joint venture with Exelon.

EDF cited the shale gas revolution, and its power market pricing impacts, for the decision.

In an 8-K, Exelon said that at the closing of a series of transactions, Exelon's Generation unit and an EDF subsidiary will enter into a Put Option Agreement pursuant to which EDF Inc. will have an option, exercisable beginning in 2016 and thereafter until June 30, 2022, to sell its 49.99% interest in CENG to Exelon's Generation unit for a fair market value price determined by agreement of the parties, or absent agreement, a third party arbitration process.

Exelon said that at the closing of several agreements, Constellation Energy Nuclear Group will make a $400 million special distribution to an EDF subsidiary.

Exelon's Generation unit will assume operation of the CENG nuclear fleet at closing, and provide corporate and administrative services for the remaining life of the CENG nuclear plants as if they were a part of the Generation nuclear fleet. CENG will reimburse Generation for its direct and allocated costs for such services.