- The Minnesota Public Utilities Commission voted to allow Xcel Energy to recover from ratepayers and investors the $748 million spent on a five-year upgrade of its Monticello, MN, nuclear power plant, including $400 million in cost overruns. But the utility may not collect its almost 10% regulated rate of return on the overruns.
- The upgrade of the 1970s-era reactor was completed in 2013 after it ran to over twice the $346 million estimate. A commission-launched investigation concluded Xcel repeatedly mismanaged the upgrade and deserves blame for the cost overruns. The profit limitation will cost the utility an estimated $24 million annually.
- Commissioners questioned the cost overruns but accepted that the upgrade benefits Xcel customers. It will eventually increase the plant’s output nearly 12%, enhance safety, and theoretically extend its life 20 years.
The state attorney general’s office recommended Xcel pay up to 75% of the cost overruns. The state Commerce Department recommended customers pay more. The cost overruns were mostly for labor needed to replace the plant’s turbine, water-treatment and heating systems, electric wiring and other major equipment.
That work necessitated new, bigger components being installed in cramped spaces designed for older, smaller ones. It also required dealing with high radiation levels. Nuclear experts said Xcel should have anticipated those challenges.
“Nuclear just doesn’t make the cut economically,” former NRC Commissioner and Vermont Law School Adjunct Professor Peter Bradford recently told this reporter.
“Ten years ago, the operations cost was between $0.01 per KWH and $0.02 per KWH but now, largely because of substantial capital investment needs, the operating cost is between $0.04 per KWH and $0.05 per KWH,” he explained. “If plants were still able to operate in the $0.01 per KWH to $0.02 per KWH range, they would be fine.”