Nuclear Management Company to be reincorporated

15 October 2007

Nuclear Management Company (NMC) is to be re-incorporated into Xcel Energy, one of its founders and sole remaining member. Separately, Xcel is due for a $116 million payout over nuclear fuel storage costs.

NMC was set up in 1999 to take on the specialist task of operating nuclear power plants owned by Northern State Power Company's (NSP's) Minnesota and Wisconsin branches as well as those of some other electricity generators, such as Wisconsin Energies (We Energies).

NMC formerly operated the Point Beach nuclear power plant for We Energies, but this was sold in October to Florida Power and Light, which took over the operating licence, the role and all the NMC staff that carried out the work.

Point Beach was We Energies' only nuclear power plant and so the company ceased to be a member of NMC once the plant was sold. This, combined with the fact that NSP is now an Xcel subsidiary and some other corporate changes meant that Xcel was the only remaining member of NMC. Executives then decided to reintegrate the businesses.

David Wilks, President of Xcel's energy supply unit said he believed reintegrating nuclear operations would provide "best value for money" and would "strengthen overall operations."

For the time being NMC will continue to operate Xcel's Monticello and Prairie Island nuclear plants, but work is underway at the Nuclear Regulatory Commission to have the operating licence transferred into NSP's name. Once this occurs, expected in 2008, NMC employees will become Xcel Energy employees. Little effect on staff is forecast.

Fuel storage

In a separate development, Xcel is due to receive $116 million after the successful conclusion of legal action to recoup expenses for storage of used nuclear fuel.

Under the Nuclear Waste Policy Act of 1982, the US Department of Energy was meant to have taken title to used nuclear fuel from all US nuclear power plants and managed its safe storage and eventual disposal. Like all other nuclear power generators in the USA, Xcel had paid 0.1 cents for each kWh of power generated to pay for this.

However, DoE facilities for used nuclear fuel storage were not ready by the 1998 deadline and Xcel's subsidiaries had to pay for improved used fuel storage at Monticello and Prairie Island. A recent ruling said that Xcel should be refunded $43.1 million paid for additional storage, $48.7 million spent in complying with additional mandates and $24.7 million of other expenses.

Virtually every US nuclear power generator has or is expected to go through similar legal action. The DoE's permanent disposal facility for used nuclear fuel job at Yucca Mountain is scheduled to begin operation in 2017.

Further information

Nuclear Management Company
Xcel Energy

Nuclear Regulatory Commission

WNN: FPL completes purchase of Point Beach

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