The Omaha Public Power District’s board of directors is poised to accept the recommendation of the utility’s management to permanently close the Fort Calhoun nuclear power plant.
In interviews this week with members of the eight-person board, five of the elected officials told The World-Herald that shuttering the plant makes the most financial sense for the utility and its ratepayers.
Two board members said they were either undecided or would wait to hear from the public at the board meeting Thursday before making a final decision. Both told The World-Herald last month that the writing was on the wall at Fort Calhoun — it would need to close.
Another board member who last month said the plant had become too costly to keep running didn’t return calls this week.
OPPD executives have said it has become too expensive to operate Fort Calhoun, the country’s smallest nuclear plant. They have refused to release the exact costs to generate electricity at Fort Calhoun, but an analysis by The World-Herald of the utility’s financial information found that it cost the plant more than $71 to generate a single megawatt hour of electricity in 2015.
That’s double the industrywide average of $35.50 per megawatt hour as reported by the Nuclear Energy Institute, placing Fort Calhoun in a position where the plant is “just not a competitive alternative anymore,” board member Mick Mines said.
(To compare, a megawatt hour of electricity has been selling on the open market on which OPPD buys and sells power for about $20.)
It’s been a long and costly road for Fort Calhoun over the past five years: An electrical fire that followed historic Missouri River flooding in mid-2011 beset the plant with a federal regulatory shutdown. Those regulators followed up with a strict oversight program. All told, there was hundreds of millions of dollars in repair costs and lost revenue.
Those costs have added up to the tune of $250 million annually, OPPD President and Chief Executive Tim Burke said at the board of directors’ public meeting last month.
That’s more than it costs Nebraska Public Power District to operate its Cooper Nuclear Station in Brownville. The only other nuclear plant in Nebraska is capable of churning out about 800 megawatts of power at full steam, or nearly 70 percent more than OPPD’s 478-megawatt plant at Fort Calhoun.
“We’ve looked at trying to uprate it to generate more megawatts, and you can’t do that,” said Tim Gay, vice chairman for the board and chairman of its nuclear oversight committee. “You can’t ask ratepayers to continue to subsidize the plant at that level.”
Ratepayers were socked with an increase in their monthly bills to the tune of 7.7 percent starting in January 2013 as a result of OPPD’s increased costs to run Fort Calhoun.
“Fort Calhoun drops out in every case that we ran when it’s given an option,” compared with other forms of energy, said Mary Fisher, division manager of corporate planning and analysis. “We see much cheaper options out there in the industry today.”
Those options include wind blowing more energy onto the OPPD grid in the future. Not all of Fort Calhoun’s output will be replaced, because the utility has more generating capability than it needs. But wind energy will make up nearly all of the replacement power in the wake of the nuclear plant’s expected closure. Natural gas-fired electricity will replace a smaller fraction.
Those two energy sources have become a common theme, especially in the Midwest and Plains regions of the United States, where wind energy resources and gushing natural gas opened up by fracking have dramatically dragged down wholesale energy prices in recent years.
Said four-year board member Tom Barrett: “When you look at it from either the future of energy or the price of energy, the economics kill it. My vote is going to be to shut it down.”
Energy prices are not the only factor likely to doom the Fort Calhoun plant.
Past and present board members and executives have said a turning point for the plant was the final version of the federal Clean Power Plan, which came out last August.
Early proposals of the environmental legislation would have given operators of nuclear plants some credit for running power plants that did not emit greenhouse gases; the final rule omitted that credit.
Still, even though the board seems likely to vote to kill the plant, there are voices of dissent when it comes to the publicly owned utility’s plans.
Representatives of the Nuclear Energy Institute have said nuclear plants like OPPD’s are due far more credit for their lack of greenhouse gas emissions, especially when compared with fossil fuel-powered sources like coal and natural gas. “Let’s be clear. No other carbon-free generating source can match the scale of nuclear energy’s carbon-free electricity output or its reliability,” NEI Chairman Donald Brandt said during a speech in Miami on May 24.
Nuclear power proponents haven’t gotten their way lately, though. Should OPPD’s board vote as expected on Thursday and follow management’s recommendation to close Fort Calhoun, the plant will be the third nuclear facility in the past three weeks to hit upon its day of reckoning.
Chicago-based Exelon Corp. on June 2 announced plans to shut down two nuclear plants in Illinois that together have hemorrhaged $800 million in the past seven years. The company’s Clinton Power Station in Clinton and its Quad Cities Generating Station in Cordova will close on June 1, 2017, and on June 1, 2018, respectively.
Exelon is the largest operator of nuclear plants in the United States. In 2012, the company entered a 20-year, $400 million contract with OPPD to operate Fort Calhoun through what was supposed to be the end of the plant’s license period in 2032. Since September 2012, OPPD has paid Exelon about $87.5 million.
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