Exelon Corp., the second-biggest U.S. utility owner, may abandon three power plants near Boston unless creditors agree to waive terms that would put the projects in default Friday for failing to be completed on time.
Because of contractor delays, the plants will not be finished by the deadline set in credit agreements, Chief Financial Officer Robert Shapard said at a Deutsche Bank AG investor conference in New York.
Exelon wants 19 lenders to extend the deadline or waive defaults so the utility owner does not risk investing more money only to have the units seized, he said.
The three plants' debt is guaranteed by the projects, not by Exelon, Shapard said. Two of the plants have begun generating power, and a third is being tested.
The unit building the plants has $1.1 billion outstanding on a $1.25 billion credit line, Exelon said in a filing with the U.S. Securities and Exchange Commission.
"We could walk away from this project," Shapard said. "In the financing agreement, there is a walk-away payment, less than $50 million we'd have to contribute on the way out the door."
Shares of Chicago-based Exelon, the biggest U.S. nuclear power generator, fell 23 cents to $58.61 in New York Stock Exchange composite trading. The stock still has risen 11 percent this year.
The three Boston-area plants would generate enough power for 1.9 million average U.S. homes and are being built by Raytheon Co.
Exelon took full ownership of the projects with its Nov. 1 purchase of the half of Sithe New England Holdings LLC it did not already own.
Sithe had hired Raytheon to build the plants. Raytheon then sold its power-plant construction business to Boise, Idaho-based Washington Group International Inc., which quit work on the projects in 2001 before seeking bankruptcy protection. Raytheon got the contracts back and has not completed work on any of the three plants, Shapard said.