Minnesota May Be Next to Support Nuclear Plants

Following the lead of Illinois and New York, which have enacted policies supporting nuclear power plants, the Minnesota Legislature is weighing a bill that could help the owner of two nuclear facilities within its borders.

Minnesota is home to the single-unit 671-MW Monticello nuclear plant and the dual-unit 1,100-MW Prairie Island plant (Figure 1). Xcel Energy owns a 100% stake in both of them.

1. Home on the prairie. The Prairie Island Nuclear Generating Station generates about 20% of the electricity used by Xcel Energy's customers in the Upper Midwest. Unit 1 began operation in December 1973 and Unit 2 followed in December 1974. The reactors are licensed until 2033 and 2034, respectively. Courtesy: Nuclear Management Co.

Current Minnesota regulations require investor-owned utilities, such as Xcel, to file multi-year integrated resource plans (IRPs) with the Minnesota Public Utilities Commission (MPUC). Companies give details about their future generation mix in the IRPs. Once the MPUC approves the plan, the utility decides how much money to allocate toward capital, and operations and maintenance expenses at each of its generation facilities. Customers' rates are adjusted after-the-fact to pay for the expenses, as long as the MPUC determines that the investments were prudent.

The senate bill being considered-SF 3504-is titled: "Carbon reduction facility designation for certain nuclear energy electric generating facilities." If passed, it would allow Xcel to submit proposals to the MPUC designating each of the nuclear plants as a "carbon reduction facility." As part of the process, the company would "include a proposed statement of the total expected costs, including but not limited to capital investments and operation and maintenance costs associated with the facility's operation."

The MPUC would then be required to approve or reject the total expected costs within 10 months of the filing date. The solution would give Xcel the ability to recover a qualifying facility's total costs outside of a general rate case proceeding. Proponents of the legislation suggest that would give Xcel more certainty than it currently has concerning cost recovery.

According to an article published by the Minneapolis StarTribune newspaper, Xcel plans to spend at least $1.4 billion on its nuclear plants over the next 17 years. It said more than $1 billion is needed to keep Prairie Island Units 1 and 2 in operation through license expiration in 2033 and 2034, respectively, and another $420 million is required to keep Monticello going through 2030, when its license expires.

The bill faces stiff headwinds, however. Opponents include the Minnesota Department of Commerce and the Minnesota Chamber of Commerce. Gov. Mark Dayton (D) has also aired concerns. In a Minnesota Public Radio sound bite, he said: "These end-runs through the legislature to try to give special interests what they want violates the whole purpose of the public utilities commission, which is [to] have an independent group of experts who make these determinations in the public interest."

But the authors of the bill disagree. Sen. David Osmek (R-Mound) was quoted in the StarTribune as saying, "I don't see where the commission would be wiped out or defanged." He suggested the MPUC would still be able to reject, modify, or approve Xcel's cost recovery proposals.

The Minnesota Senate Energy and Utilities Finance and Policy Committee voted 7-2 in favor of the bill on March 27, referring it to the Senate floor. A similar bill is pending in the House.

-Aaron Larson, executive editor (@AaronL_Power, @POWERmagazine)

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