Made to Be Broken

Diana McKeown of Clean Water Action: "It's almost like Xcel is saying, 'F You.' "
Craig Lassig

In 1994, the Minnesota legislature made what many environmentalists regard as a deal with the devil. NSP--now Xcel Energy--had come to the state requesting permission to store high-level radioactive waste from its Prairie Island nuclear power plant in 48 concrete casks on an island in the Mississippi River. After much heated debate, the legislature compromised by allowing NSP the use of 17 casks. There were, however, a few caveats: The utility would invest $500,000 per cask per year in a renewable energy fund; NSP would make plans to decommission the plant; and, most significantly, the plant would shut down if the waste was not moving out of the state by 2007.

In return, NSP's then-CEO Jim Howard vowed that the company would not return asking for more storage capacity.

"It was the most bitter, contentious debate we've had in my 10 years here," recalls state Senator Ellen Anderson, who was then in her freshman term. "But I thought the law was clear: The policy of the state was that the plant was going to close."

As chair of the senate's Regulated Industries Committee, Anderson is likely to be hip-deep in the controversy once again during the upcoming legislative session. Earlier this month, Xcel released a report to the state's Public Utilities Commission laying out a number of scenarios for closing the Prairie Island plant in 2007, when it will have reached its storage capacity. According to the utility's estimates, replacing the plant's 1,100 megawatts (about 18 percent of the state's energy use) with coal or natural gas plants would mean increased pollution, decreased reliability, and a cost to Minnesota ratepayers of up to $2 billion. The way to avert the looming crisis, the report concluded, would be for the legislature to authorize more waste storage at Prairie Island--precisely what Xcel had promised not to ask for a decade ago.

According to Laura McCarten, a spokesperson for the utility, the about-face is driven by necessity. "We've done everything we can do not to come up to the state again," she says. "There are a number of alternatives, but nothing's likely to come in on time. The consequences are so large in terms of cost and emissions that we feel it would be irresponsible not to bring the issue back to the legislature."

To Xcel's critics, though, it looks as if the company is simply trying to subvert state law for its own ends. "They've consistently been scofflaw," says Diana McKeown, energy program coordinator at Minneapolis-based Clean Water Action. "They're acting as if they need clarification of whether nuclear energy is going to be in the state's mix. That's confusing to those of us who were around in 1994, because there was no uncertainty in that legislation: If the waste wasn't leaving the state, the plant has to shut down. It's almost like Xcel is saying, 'F you.'"

To some extent, though, Xcel is caught between a rock and a hard place--or, more specifically, between state law and federal inaction. The 1994 compromise was forged under the assumption that a planned federal repository at Yucca Mountain, Nevada, would begin accepting nuclear waste from commercial reactors before 2007. In 1998, Xcel successfully sued the U.S. Department of Energy for failing to live up to its commitment to take the waste by the proposed deadline, January 31, 1998. But today the project, which has already cost $8 billion, remains in political and regulatory limbo. By the most liberal estimates, Yucca Mountain will not begin receiving waste shipments before 2012--and even then, it could take up to three decades to transport all of the waste from the nation's 103 commercial reactors to Nevada.

Recognizing that the Prairie Island plant would exceed its storage capacity long before Yucca Mountain was prepared to accept the waste, Xcel, leading a consortium of nuclear utilities, began searching for an alternative. They settled on a temporary private storage facility on an Indian reservation in Skull Valley, Utah, about an hour southwest of Salt Lake City. Over vehement opposition from Utah state officials and environmentalists, the Xcel-led consortium, called Private Fuel Storage, signed a 25-year lease with the Goshute Indian tribe in 1996. However, after Congress authorized the Yucca Mountain project earlier this year, the consortium's other utilities--whose storage problems are less pressing than Xcel's--signaled that they wouldn't invest in the Utah facility. Xcel was essentially left in the lurch.

Given the perpetual uncertainty of the Yucca Mountain project, critics like McKeown argue that Xcel ought to have taken earlier and more aggressive steps to replace Prairie Island's generating capacity. "They've dragged their feet on this since '94," she says. "New power is going to cost more no matter what we do." In essence, McKeown contends, Xcel has let a crisis build until the legislature has no reasonable alternative but to authorize increased waste storage. And, she adds, the specter of a looming energy deficit may be somewhat disingenuous: Because one of Prairie Island's two reactors needs a new $200 million steam generator, it will be off-line for at least a year anyway. Indeed, according to a recent Department of Commerce study, Prairie Island's Unit 1 may have to be decommissioned as soon as 2009--the plant's federal operating license expires in 2013--due to poor performance.

Anderson agrees that Xcel's nuclear dilemma is largely self-imposed. "This is really the result of poor planning on their part," the senator says. "They really haven't taken responsible steps toward replacing that power. They pushed this to the last second, and that minimizes the options and maximizes the cost."

The utility's foot-dragging puts the legislature in a difficult spot, Anderson adds: Welsh on the 1994 law, or shift the financial burden of hastily replacing the state's nuclear power generation to ratepayers. While the utility has yet to proffer any concrete legislation, Anderson is already preparing for a debate as bitterly divisive as the one in 1994. "Obviously they think they have a more favorable political climate this time," she says. "I'd sure like to avoid a bloodbath if possible, but I don't know if we can."

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