Monday, October 22, 2012

Statement from NEI President and CEO Marv Fertel on Closing of Kewaunee Power Station

Earlier this morning, Dominion announced that it would be closing the Kewaunee Power Station, a 556 MWe nuclear facility located about 27 miles outside Green Bay, Wisconsin.The following is an official statement from Marv Fertel, NEI's President and CEO, concerning the announcement.

"Nuclear energy remains a reliable, cost-effective producer of electricity for America’s homes and our economy. As stated by Dominion, the company’s decision to close Kewaunee is based on the fact that it did not acquire additional reactors in the Midwest markets, so it could not achieve the economy of scale needed to be economical in that low-price power market.

"Dominion is one of the best nuclear energy facility operators in the country and is committed to nuclear energy in other states it serves as part of the company’s electricity portfolio. Nuclear energy is vital to meet America’s growing electricity needs today and to ensure the secure, reliable and low-carbon power for decades to come. Nuclear energy facilities lead the electric utility sector in reliability and are among the lowest cost electricity producers for American families and the economy. They will play a vital role as America transitions to a lower-carbon electricity portfolio."
Kewaunee Power Station, located near Green Bay, Wisconsin.
The following passage comes from Dominion's press release regarding the closure:
"One thing that should be perfectly clear is that the employees of Kewaunee have been doing an outstanding job, and this decision is in no way a reflection on them," (Dominion Chairman, president and CEO Tom) Farrell said. “I want to thank them for all they have done, and Dominion will work to make the transition as smooth as possible for them and their communities.”
For more information on the facility from the U.S. Nuclear Regulatory Commission, click here.

5 comments:

Anonymous said...

This is really bad news. You have a fully amortized plant, a license renewal, and a good operating record, yet it is somehow uneconomical to continue operating? I don't buy the "it's too small" argument, especially with people beating the drums for "small" modular reactors. I have been to Kewaunee. It is a good, clean operation. Surely someone in the nuclear generating business could take it over and make a go of it.

Engineer-Poet said...

Perhaps it wasn't economical given the organizational overhead.  If sale to Entergy wasn't considered, the shareholders ought to raise a stink.

Anonymous said...

Exelon is so close, yet they won't touch it? Oyster Creek had a similarly dire outlook in 2000, yet they got picked up for a song by Exelon after prepping for for shutdown for several years. Could it be due to Wisconsin opting out of the energy market liberalization trend that many states leaped into during the late 1990s? Or, with OC now staring once again down the barrel of decommissioning after only 10 of its 20 year license extension, are smaller, older reactors simply falling out of vogue, regardless of market regulation.

Anonymous said...

The real reasons behind the KNPP closure is that the local utilities that previously owned KNPP had planned for it to be retired (and PBNP as well). The Utilities in Wisconsin have built about 1200 MW of new coal fired units, with another 600 MW Unit comming on line shortly that are in the regulated utility rate base. WPS, the key power buyer from KNPP built Weston 4 as the planned replacement for its large portion of KNPP. The power contract with WPS is expiring; and the local utilites do not need to buy base load power as they have built replacement plants. Currently there is not a huge other power market in the midwest to sell the full output of a nuclear plant to(even a 500+ MW one); and at least for the next couple of years other electrical options are available. KNPP is a great plant - but, it is now a Merchant Plant and their is no current power market to support it. While I suspect that may change in 5 - 10 years - it is likely cheaper to just decomision the plant than pay to keep it arround until then in the hopes that a future power market would develop.

Anonymous said...

But I don't understand why they can't be cost-competitive with those other (fossil) plants. Surely the marginal costs for power generated are lower because of lower fuel costs. KNPP is a mature plant. It's contruction costs have been paid. That leaves fuel and O&M as the cost drivers. I was always under the impression that nuclear plants had a cost advantage on the fuel side. Can they bring their other O&M costs down to make it more competitive? It would seem a review of plant operational costs would be in order before any kind of knee-jerk reaction to decommission, unless, again, all they are interested in is raiding the decommissioning fund.