Nuclear energy milestones in the Midwest

Despite the record low price of natural gas, progress in being achieved and sought, in Michigan, Minnesota, and Missouri

  • NRC renews operating license of Ameran’s Callaway reactor for another 20 years
  • DTE’s FERMI III project plots market plan to overcome competitive threat from low price of natural gas
  • Xcel Energy dances with the legislature on policy for a new reactor
  • PUC rules in favor of costs, but denies profits, to Xcel on cost overruns at Monticello plant

Callaway renewed for 20 years

Despite contentions by green groups over spent fuel, this week the NRC renewed the operating license of the Callaway plant in Missouri for another 20 years. The license will now run through October 2044. The agency said in a press release that under NRC procedures, the staff may renew a nuclear plant’s operating license with Commission approval despite outstanding adjudicatory contentions.

The Missouri Coalition for the Environment filed multiple contentions last September and December seeking to re-open the Callaway case. The Coalition challenged the NRC’s Waste Confidence rule that says spent nuclear fuel can be safely stored at the nation’s nuclear reactors until a permanent solution is found for it.

On Feb. 26, the Commission denied the September request to reopen and suspend licensing of reactors based on this contention. Still pending before the Commission is the December request to reopen the hearing and file an environmental contention.

Once the NRC staff completed comprehensive environmental and safety reviews, it concluded Ameren met all the requirements for license renewal. The staff on Feb. 3 requested authorization to renew the license. The Commission granted authorization on March 4. If the renewed license is set aside on appeal, Callaway would revert to its original license, which is effective until Oct. 18, 2024.

The Callaway plant is a single PWR type unit. The Union Electric Co., doing business as Ameren, applied to renew its license on Dec. 19, 2011. Renewal of the Callaway plant brings to 76 the number of commercial nuclear reactors with renewed licenses. Another 18 licenses are under review.

National case on spent fuel 

Separately, the NRC denied a national level petition by several environmental groups to suspend all licensing operations claiming the agency disregarded the requirements of the Atomic Energy Act for a permanent repository for spent fuel.

This decision may once and for all time remove the “put the cork back in the genie bottle” strategy of anti-nuclear groups who sought to stop reactor licensing decisions by pointing to the lack of a permanent storage solution for spent fuel.

The Nuclear Energy Institute filed an amicus brief opposing the contention. In a press statement, NEI General Counsel Ellen Ginsburg said,”Neither the Atomic Energy Act nor any other statute requires safety findings on repository disposal of spent fuel as part of reactor licensing decisions.”

The NRC’s decision reflects that point of view.  It wrote in its decision that neither the courts or Congress, or, for that matter, the NRC have ever held that the Atomic Energy Act requires a safety finding regarding disposal of spent nuclear fuel as a “prerequisite to issuing a nuclear reactor license.”

The agency also wrote, “we find no reason to alter our long standing interpretation of the act.”

FERMI III anticipates NRC COL

The NRC is close to issuing a combined construction and operating license for the DTE Energy (NYSE-DTE) FERMI III reactor. If built, the 1560 MW ESBWR will be the first commercial unit based on this design in the US. It is expected to cost in the neighborhood of $10 billion. With a market capitalization of $14 billion, it is a ‘bet the company’ decision. The firm currently operates FERMI II an 1198 MW BWR which began operation in January 1988.

The project is a lightning rod for opposition from anti-nuclear groups. However, its biggest challenge is the low price of natural gas. Since the construction license does not expire, if plans for the unit do not change, the firm can wait out the market. In the meantime, DTE has been buying up natural gas plants to replace aging coal fired units. Tougher pollution control requirements for coal plants, and for carbon emissions in general, may also alter the market. Also, DTE applied for a 20-year extension to the license for Fermi II.

The slow recovery of the US economy may eventually increase demand for electricity to the point where the reactor will have a profitable future. Once built it will have a 60 year operational lifetime.

Michigan is still the home to the US auto industry who’s shuttered factories from the great recession might yet one day again reopen to produce cars and the parts to build them.

Minnesota debates a reactor it might need

A state law that bans the construction of new nuclear power plants in Minnesota may be overturned even if the lead utility that operates one there has no plans to build one in the near future. State Sen. Mary Kiffmeyer (R-Big Lake) is the chief sponsor of the bill.  She is pushing for passage so that the state’s utilities can build a nuclear reactor in the future if needed.

Randy Evans, a spokesman for Xcel Energy (NYSE:XEL), told a Duluth, MN, newspaper the firm has no plans to build another reactor, but,. he said the firm wants to keep its options open. With a market capitalization value of $17 billion, a new reactor is within its financial grasp if market conditions are right.

Currently, low natural gas prices, and hydro electric power from Canada, are meeting demand for electricity in addition to what the state’s two reactors provide.

Opposition to the bill comes from the Prairie Island Indian Community.  It said that while it was not opposed to nuclear energy in principle, it felt it is “irresponsible to build one” without a place to send spent fuel.

Minnesota has two nuclear power stations.

  • The Prairie Island Nuclear Generating Plant is located in Red Wing, MN, along the Mississippi River, adjacent to the Prairie Island Indian Community reservation. The nuclear power plant, which began operating in 1973, has two PWR type reactors manufactured by Westinghouse that produce a total 1,076 MW. Units 1 and 2 are licensed to operate through 2033 and 2034, respectively.
  • The Monticello Nuclear Generating Plant is a nuclear reactor in Monticello, MN, along the Mississippi River. The site, which began operating in 1971, has a single BWR type unit generating 671 MWe. The reactor was originally licensed to operate until 2010, however in 2006, it was extended to operate until 2030.

Separately, the Minnesota House of Representatives is reported to be leaning toward removing the ban on new plants. In the Senate the prospects for the bill hinge on an amendment to an energy bill that will come before the full Senate.

The future action in both houses may be impacted by a recent PUC finding on cost overruns for upgrades to the Xcel Monticello plant.

Minnesota PUC rules on Xcel reactor upgrade costs

The Minnesota Star Tribune reports for March 6 that the state’s public utilities commission (PUC) has ruled that while Xcel Energy may recover $748 million in costs for an uprate and related improvements to the Monticello plant, but it cannot ask for the regulated rate of return (profit) of about 10% on the cost overrun.

The Star Tribune reports on Feb 3 that an investigation by the state PUC of Xcel Energy Inc.’s cost overruns during a five-year project to upgrade its nuclear reactor in Monticello is placing much of the blame on the company’s management for letting it happen.

The newspaper reported that nuclear and financial experts working for Minnesota utility regulators have concluded that Xcel managers didn’t understand or fully plan for the complex job of replacing major reactor components, didn’t adequately oversee contractors, and  tried to shift the blame on to the U.S. Nuclear Regulatory Commission (NRC) for some of the costly delays.

The project to extend the plant’s life and increase power output increased from an estimated $320 million in 2008 to $665 million when it was completed last year. However, the final price tag has risen to $748 million.

“The project was not adequately thought out,” said Mark Crisp, a nuclear consultant hired by the state Commerce Department to review Xcel’s handling of the project. He submitted written testimony on his findings to the PUC.

The utility has disputed some of the charges of mismanagement.

“We had an experienced team in place that relied on the best information available from our own internal experience and other projects,” said Dave Sparby, chief executive for Xcel’s Minnesota operations, in an interview with the newspaper.

The upgrades boosted the plants power by 12%, replaced the turbines, water treatment systems, and other non-reactor electrical components.

A state administrative law judge found in favor of the PUC stating that the utility mismanaged the project.

Aakash Chandarana, Xcel’s VP for Regulatory Affairs, told the PUC that the firm now believes it was “naïve” about some of the difficulties it faced in dealing with the older equipment and high radiation levels in some parts of the plant. He agreed the 2008 cost estimate fell short, but called it a “conservative” number.

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About djysrv

Dan Yurman ~ The Twitter feed is a hiatus due to the turmoil on that platform. The news feed of nuclear energy headlines can be found on Mastodon at: ~ About this blog and disclaimers for NeutronBytes ~ ~ Contact Me ~ neutronbytes [at] gmail [dot] com ~ Text via Signal 216-218-3823 ~ I am NOT active on Facebook, Reddit or Instagram. Attempt no landings there. ** Header Image Credit: ~ ** Emails sent by readers about blog posts are considered to be comments for publication unless otherwise noted. ** The content of this blog is protected by copyright laws of the U.S. "Fair use" provisions apply. The RSS feed is for personal use only unless otherwise explicitly granted.
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