The company faces credit risk from counterparties, especially if credit ratings fall below investment grade, requiring additional collateral. Market fluctuations in commodity prices (electricity, natural gas, oil) and potential supply disruptions (especially Russian nuclear fuel) pose risks. Environmental regulations, including EPA rules on GHG emissions, and ongoing litigation related to these regulations, could lead to substantial remediation costs. The company's significant investments in nuclear decommissioning funds are exposed to equity and interest rate fluctuations. Litigation and asbestos-related personal injury claims also present potential liabilities.
Financial Upside
Favorable nuclear Production Tax Credits (PTCs) from the Inflation Reduction Act (IRA) are a significant revenue source. The company has a share repurchase program with remaining authorization. The restart of the Crane Clean Energy Center (formerly Three Mile Island Unit 1) and associated power purchase agreement (PPA) with Microsoft represent a potential revenue stream. Sales of customer accounts receivable and associated Deferred Purchase Price (DPP) collections are a source of cash flow. The company has access to substantial credit facilities.
