Iowa nuclear plant to close in 2020

30 July 2018

The single-unit Duane Arnold nuclear power plant is to close in late 2020 after utility Alliant Energy and owner NextEra Energy Resources agreed to shorten their existing power purchase agreement (PPA) for the plant by five years, the companies announced on 27 July.

Duane Arnold (Image: NextEra Energy)

Duane Arnold, a 615 MWe boiling water reactor in Palo, near Cedar Rapids, has been in commercial operation since 1975 and is currently licensed to operate to 2034. It is the only operating nuclear power plant in the state of Iowa and, according to the US Nuclear Energy Institute, produces 9.2% of the state's electric generation and 19% of its emission-free electricity. A factsheet on the plant from NextEra claims it stimulates USD255 million in economic activity in Iowa and USD514 million nationally, while paying property taxes of about USD3 million per year.

NextEra had already said it expected the plant to close on the expiry of the current PPA in 2025. Speaking at NextEra Energy's 2017 earnings conference call in January this year, Chief Financial Officer John Ketchum said it was "unlikely" that the facility's primary customer - Alliant Energy - would extend the current PPA. The plant's contribution to NextEra Energy Resources' net income had been and was expected to remain negligible over the next several years, he said.

The companies have now agreed to shorten the term of the existing PPA by five years in exchange for a USD110 million buyout payment, to be made by Alliant in September 2020. This is subject to approval by the Iowa Utility Board. New agreements including 360 MWe of output from four of NextEra's wind facilities - which are to be "repowered" at a cost of USD250 million - have been agreed. The companies say the transactions will save Alliant Energy's Iowa customers nearly USD300 million in energy costs over the 21 years following the nuclear plant's closure.

"The eventual closing of the Duane Arnold Energy Center is a difficult decision because of the approximately 500 highly skilled men and women who consistently have made it one of the top-performing nuclear facilities in the country," NextEra Energy Resources President and CEO Armando Pimentel, said. He added that "several hundred jobs" would remain at the plant "for a number of years to cater for a lengthy decommissioning process, along with the creation of new jobs through our continued investment in Iowa".

NextEra Energy Resource's planned investments include USD650 million in existing and new renewables generation by the end of 2020, including the USD250 million to repower the wind facilities included in the new PPAs. The company said it is also "evaluating redevelopment opportunities" at the Duane Arnold site, including the construction of new solar energy, battery storage or natural gas facilities.

The company said the regional transmission organisation, Midcontinent Independent System Operator, and the Nuclear Regulatory Commission will be notified of the intent to permanently cease operations and decommission the plant "at the appropriate time".

Duane Arnold minority owner Central Iowa Power Cooperative (CIPCO) said it was concerned about near-term, adverse effects from the plant's early closure to consumer-members for many of Iowa's electric cooperatives and municipalities. CIPCO owns 20% of Duane Arnold, which currently provides 35% of the cooperative's energy portfolio which also includes coal at 37% and wind, hydro, landfill gas and solar contributing a combined 27%.

"Replacing one-third of our energy portfolio will not occur overnight," CIPCO CEO Bill Cherrier said, adding that NextEra's announcement presented an "opportunity to explore additional resources".

He added: "Today, our energy supply stands at more than 60% emission-free. Nuclear energy is a key part of our carbon-free resource diversity.

"[Duane Arnold] has been a valuable economic engine in this state for over 40 years. We recognise economics are driving NextEra Energy's decision to prematurely close the plant."

Researched and written by World Nuclear News