Dive Brief:
- The Minnesota House failed to advance a bill that would have altered how Xcel Energy recovers investments made in its nuclear fleet. The Senate passed the measure last week but the legislative session ended before the House could act, the Star Tribune reported.
- Consumer advocates, a group of the utility's large electricity customers, and Minnesota Gov. Mark Dayton opposed the proposal, fearing it would weaken regulatory oversight and shift risk to customers.
- Xcel operates three units and will need to invest more than $1.4 billion through the end of their operating licenses.
Dive Insight:
It's a rough time for nuclear operators. The industry is at a crossroads, as cheap natural gas and a surge of interest in clean energy alternatives has put pressure on existing generators and stymied enthusiasm for new projects. Several states have taken steps to support struggling plants, but new projects are rare. South Carolina has canceled the overbudget V.C. Summer project, leaving only Georgia's Vogtle under construction in the United States.
In Minnesota, Xcel operates three units which are key to the utility's goal of supplying 85% carbon-free electricity by 2030. Facing a hefty maintenance bill through 2035, the company said the legislation would give it more certainty in its ability to recover necessary investments.
Several groups, however, found the proposal problematic: it would shift the timing of the cost-recovery proceeding, which now happens after the utility has made the investments. Opponents of the bill said approving expenditures in advance would give the utility cause to aim high in its estimates and would shift risk from shareholders to consumers.
Xcel operates the Monticello Nuclear Generating Station, which is rated at 671 MW. The plant began operating in 1970 and, following a 2006 license renewal, is planned to operate until 2030.
The utility also has two reactors at its Prairie Island Nuclear Generating Station, producing 1,100 MW in Red Wing, Minn. The units generate about 20% of the energy Xcel delivers in the Upper Midwest, and have been in operation since the early 1970s. Following license renewals, the units will operate until 2033 and 2034.
Other utilities have been making decisions based on actions out of state legislatures. Earlier this year, Public Service Enterprise Group and Exelon Corp. canceled multiple capital projects at their jointly-owned Salem nuclear plant after the New Jersey legislature failed to pass a bill to support the state's nuclear generation. However, the New Jersey bill is expected to be signed by Gov. Phil Murphy (D) today.
Other states that have passed laws to support struggling nuclear plants, include New York, Connecticut and Illinois.
