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Smallest U.S. nuke plant not economically viable, should be scrapped: Nebraska utility head

AP

The head of a Nebraska utility recommended shutting down the nation’s smallest nuclear power plant by the end of the year, saying Thursday that it doesn’t make economic sense to keep it open.

Tim Burke, the president and CEO of the Omaha Public Power District, told the utility’s board that Fort Calhoun Nuclear Station isn’t financially sustainable.

Shuttering the plant would represent a major shift for the utility, which serves more than 310,000 customers in 13 counties in southeastern Nebraska. Utility officials previously maintained that Fort Calhoun would be a valuable part of its plans because of its ability to generate power without adding to carbon dioxide emissions.

Board Chairman Mick Mines asked in April for a report on potential scenarios regarding the district’s future power resources and told senior managers to provide recommendations. The board is expected to vote on the recommendations at its June 16 meeting.

The district spends about $650 million a year on generating power, which is a bit more than half of its budget. But the utility also has to make sure its mix of power plants can comply with environmental rules and restrictions on carbon dioxide emissions. The district typically gets about 30 percent of its power from the Fort Calhoun plant.

The economics of the utility business have changed significantly in recent years because of new environmental regulations and changes in natural gas prices. Fort Calhoun is the smallest U.S. nuclear power plant, according to the utility, and its size factored into the recommendation to close it.

“It’s just not viable. It’s just not economically viable,” board member John Green said.

Smaller nuclear plants, like Fort Calhoun, have the most difficult time competing on the price of power, especially if they have had serious safety problems, said Mark Cooper, who is a senior fellow for economic analysis with the Institute for Energy and the Environment at Vermont Law School.

“The older, smaller reactors are really uneconomic,” Cooper said.

Adding to Fort Calhoun’s problems is a series of setbacks it has had in recent years.

The utility spent more than $140 million on repairs after flooding and a small fire damaged the plant in 2011. Fort Calhoun’s closure in April 2011 began with routine refueling maintenance, but massive flooding along the Missouri River that year and several safety and security violations forced it to remain closed.

Among the violations cited by regulators was the failure of a key electrical part during a 2010 test, a small electrical fire in June 2011, several security issues and deficiencies in flood planning that were discovered a year before the river spilled its banks.

It resumed operations in December 2013 after the utility hired Chicago-based Exelon, the largest U.S. operator of nuclear power plants, to run Fort Calhoun.