It Won’t Cost Much to Reduce a Major Source of Nuclear Waste

For less than $6 a year per household, Xcel Energy can shut down the twin nuclear reactors at Prairie Island and eliminate two-thirds of the state’s nuclear waste production. That is the conclusion of the Minnesota Commerce Department in a little-reported study issued in December.

There is evidence that this remarkably modest cost estimate is too high.

In 1994, Minnesota had a contentious debate on the future of nuclear waste in our state. Xcel Energy (formerly NSP) needed permission for more waste storage. Fearing that an immediate shutdown would produce severe consequences, the Legislature arrived at a compromise allowing Prairie Island sufficient dry cask storage to take it through an orderly shutdown by 2003 (later changed to 2007).

In 1997, NSP’s CEO reaffirmed that the company would honor the 1994 agreement and not request additional waste storage. But in December 2002, that promise was broken when Xcel Energy announced that it would ask the Legislature to once again debate the future of nuclear power in Minnesota.

Now the Minnesota House has taken up the issue. The Legislature should hold the line. For Xcel ratepayers, today is perhaps even better than 1994 to phase out Minnesota’s production of nuclear waste. There is plenty of electric capacity in the region to meet all of our needs with a healthy reserve margin. In addition, the cost of clean, efficient energy technologies continues to drop.

In determining the $6 impact there are at least two factors that make the estimate too high. First, it appears that the department assumed that only Xcel’s Minnesota customers would be responsible for the cost of closing Prairie Island. However, since Prairie Island supplies electricity to customers in many states, it would be appropriate for all customers to share in the cost.

Second, the department estimate was based on preliminary figures from a contingency bidding process for new power plants to replace Prairie Island. Unfortunately, a successful developer could have its project pulled out from under it if Prairie Island is allowed to keep operating. Bidders in this process would have undoubtedly increased their bid price to account for this uncertainty. A final contingency selection is expected soon.

The actual cost may be closer to $4 a year per household. In either case, Minnesota can continue to phase out nuclear power, with all of its associated dangers, for less than a few cups of coffee.

Despite Xcel’s push to violate the 1994 agreement and keep its nuclear facilities operating, it acknowledges “the alternatives examined are viable and can be implemented.” The utility’s alternative scenarios for replacing Prairie Island rely heavily on coal and/or natural gas. Ideally, renewable energy, distributed generation and energy efficiency would have a role in replacing the power from Prairie Island rather than a continued reliance on central-station fossil-fuel plants.

Legislators should also be aware of an additional issue surrounding continued operation of Prairie Island. As George Crocker of the North American Water Office notes, Xcel is planning on investing almost $150 million to replace aging, corroded steam tubes on its Unit 1 generator. Crocker suggests that Xcel should immediately shut this unit down and avoid this costly repair. This would save about $100 million and allow the second reactor to operate until 2010 without violating the limitations on waste storage. Creative thinking like this can lessen the economic impact even further.

The low cost of replacing Prairie Island today is just one indication that legislators made the correct decision in 1994. The 2003 legislators would be wise to spend their time on other important issues. Xcel Energy should send its swarm of lobbyists home and pass those savings on to its ratepayers and shareholders rather than trying desperately to hold onto an energy technology with no future.

— John Bailey is a research associate at the Minneapolis and Washington, D.C., based Institute for Local Self-Reliance (www.ilsr.org).