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NEI VP Richard Myers |
Over the past 24 hours, we've seen a number of folks online ask the question of why it's no longer economically feasible for Dominion to continue to operate the
Kewaunee Power Station in Wisconsin. Earlier today, I put the question to
Richard Myers, NEI's Vice President, Policy Development, Planning and Supplier Programs. Here's what he wrote back:
In 2005, when Dominion bought the plant: (1) power prices in the Midwest were in the $40-50/MWhr range; wellhead gas prices were in the $6-10 per million Btu range; and U.S. electricity demand was growing.
Today: (1) power prices in the Midwest are in the $30/MWhr range: gas prices are in the $2-3 per million Btu range; and (3) the U.S. has had 5 years of no growth in electricity demand, thanks to the worst recession in 80 years.
Thanks to Richard for laying out the numbers for us. For a statement from NEI's Marv Fertel on the decision to close Kewaunee, click
here. For a a quote from an RBS research note that defended the decision, click
here.
Comments
Given this, closing Kewaunee because of the short-term price situation is extremely short-sighted. I hope some patient capital is willing to buy the plant and keep it open, because it will be well-rewarded in just a few years.
Dominion is an East Coast company and they have this plant on the other side of Lake Mchigan.
It would make more sense for another company to take over this plant.