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Prairie Island license renewal application submitted; generation capacity expansion request pending

MINNEAPOLIS - Xcel Energy is beginning the regulatory processes to extend the operating life of the Prairie Island nuclear plant and to increase its power generation capacity.

An application to renew the operating licenses for Prairie Island’s two reactors was submitted to the federal Nuclear Regulatory Commission today. The plant’s current 40-year licenses expire in 2013 and 2014. The application requests 20-year license extensions for each 538-megawatt reactor.

Meanwhile, Xcel Energy is finalizing a Certificate of Need application to support the proposed license extensions. The application, which will be filed later this spring with the Minnesota Public Utilities Commission, will seek to increase the number of used fuel storage containers at Prairie Island.

The 5.5-acre used fuel storage facility on the plant site now has 24 containers. It is authorized for enough containers to accommodate plant operation through expiration of the current licenses, which is estimated to total about 29.  The application will seek to add 35 containers, which would fit within the existing storage site boundaries, to support plant operations during the license renewal period.

The filing with the Minnesota commission also will include a Certificate of Need application seeking to increase the generating capacity of each Prairie Island reactor by approximately 80 megawatts. That proposal would bring the plant’s total generating capacity to nearly 1,240 megawatts.

“The Prairie Island plant generates approximately 20 percent of the electricity used by our customers in the Upper Midwest, and it has operated safely, reliably and economically for 35 years,” said Dave Sparby, acting president and CEO of Northern States Power Co.-Minnesota, an Xcel Energy company.

 “Our analysis shows that continuing to operate the Prairie Island reactors is a cost-effective option for meeting our customers’ growing demand for electricity while helping us accomplish state policymakers’ environmental objectives for carbon reductions. Continued operation of our nuclear plants also enhances our fuel diversity, which provides a valuable hedge on price risks and potential carbon regulation costs.”

The license renewal and capacity expansion proposals were previewed late last year in Xcel Energy’s 2007 Resource Plan filing, which also cites the need for adding generating capacity at the Monticello nuclear plant. A Certificate of Need application for the Monticello project was filed with the Minnesota commission earlier this year.

The Resource Plan, which covers 2008 through 2022, describes how Xcel Energy aims to meet renewable energy, conservation and greenhouse gas reduction goals established by the 2007 Minnesota Legislature, while at the same time meeting customers’ increasing demand for electricity. Continued operation of and capacity expansions at the company’s nuclear plants are integral parts of the plan.

“The proposed Prairie Island plant license renewal and increased capacity complement our other efforts to greatly expand wind resources and conservation on our system,” Sparby said. “We are committed to achieving a well-balanced portfolio of energy resources that best meets our customers’ needs and accomplishes the state’s environmental goals.”

The NRC will schedule public meetings on the license renewal application, and an environmental report will be prepared. After a thorough review, the NRC is expected to decide on the application in 2010. The NRC has renewed the operating licenses of 48 of the 104 operating reactors in the United States, including Monticello’s.

State regulators will conduct separate reviews of the requests for additional generating capacity and to increase the number of used fuel containers. If approved by regulators, the Minnesota Legislature would have an opportunity to review the storage increase request, likely during its 2010 session.

The license renewal application will be posted on Xcel Energy’s Web site at www.xcelenergy.com after the NRC accepts it. The Certificate of Need applications will be posted on the company’s Web site after the state filing is made.

Additional information about the license renewal process is available on the NRC’s Web site at www.nrc.gov, and more information about the Prairie Island plant is available on Xcel Energy’s Web site at www.xcelenergy.com.

The Prairie Island and Monticello plants are owned by Xcel Energy and operated by Nuclear Management Co.

Xcel Energy (NYSE: XEL) is a major U.S. electricity and natural gas company with regulated operations in eight Western and Midwestern states. Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.3 million electricity customers and 1.8 million natural gas customers through its regulated operating companies. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.