http://www.omaha.com/money/oppd-ceo-shut-down-fort-calhoun-nuclear-plant-by-end/article_f8b86658-184e-11e6-b852-8f5144170b67.html
[Even with subsidies for nuclear in place, and coal prices at rock
bottom due to falling demand, this utility is switching away from both
because they are no longer economically viable. The replacements
include wind power and natural gas. See this article and another below.
video in on-line article]
OPPD CEO: Shut down Fort Calhoun nuclear plant by end of the year
Posted: Thursday, May 12, 2016 9:45 am | Updated: 2:44 pm, Thu May 12,
2016.
By Cole Epley / Only in the World-Herald
The Omaha Public Power District would permanently shut down its nuclear
power plant at the end of the year under a plan its chief executive is
presenting to the utility’s board Thursday.
That means engineers at Fort Calhoun Station would split their last atom
in 2016.
Omaha Public Power District President and Chief Executive Tim Burke on
Thursday morning is telling the utility’s board of directors it no
longer makes financial sense to continue operations at Fort Calhoun,
which is the smallest nuclear power plant in the U.S.
Burke will recommend to the board at its monthly meeting that OPPD cease
operations at Fort Calhoun by the end of the year. The board will
consider its options and will reconvene to make a decision on June 16.
In an interview, Burke told The World-Herald on Wednesday that
regulatory pressure to reduce carbon emissions, a goal to make rates
more competitive and depressed prices on the wholesale electricity
market influenced management’s recommendation to shut down the plant.
From September 1973 through March 2012, the plant accounted for more
than 34 percent of OPPD’s annual electricity generation.
The plant in recent years has been under the microscope of U.S.
regulators: Problems at Fort Calhoun came to a head when the plant was
taken off line for refueling in April 2011, then suffered a fire and
reeled from troubles related to the historic flooding of the Missouri
River that year.
Soon after that, federal regulators found dozens of safety deficiencies
and put the plant in an intense oversight program to address
"significant performance and/or operational concerns."
After power production ceased in April 2011 and regulators ratcheted up
oversight, OPPD in 2012 entered a 20-year, $400 million contract with
Exelon; that Chicago-based nuclear company is the largest of its kind in
the U.S. and now runs the Fort Calhoun plant for OPPD, which continues
to own the plant and has its own staff of around 650 workers connected
to its operation.
Many of those workers would lose their jobs, though not all immediately
because powering down a plant can take years. Burke said that was the
toughest part of the decision to make the recommendation to close the plant.
"To see the way those men and women worked, to see them put their lives
and souls into keeping the plant safe during the flood, and the manner
in which they restored the plant ... they started the plant back up and
have made continued improvements and performed their jobs," Burke said
in the interview.
"We’re not recommending to cease this because of performance because
we’ve seen performance as high as it’s been in years, by all measures,"
he said.
The plant restarted in December 2013 and has operated under a normal
level of federal regulatory oversight since April of last year.
The plant’s now-rectified regulatory issues aren’t the reason for the
recommendation to power down, though, Burke said. It’s simply become too
expensive from a cost-benefit perspective to operate the country’s
smallest nuclear plant, he said.
The utility spends $250 million each year to produce energy and maintain
facilities at Fort Calhoun.
That’s a hurdle, Burke says, when it comes to achieving its goal of
taking rates from about 7 percent below the regional average to 20
percent below that average.
And the utility’s revenues have been falling. First, there is lower
demand for electricity as customers move toward energy efficiency.
Second, the utility is getting less money for the excess power it
generates that it sells on the open market.
Recently, an oversupply of natural gas and increased regional wind
energy production has made it increasingly difficult for OPPD to make up
for revenue shortfalls associated with flat or falling demand for
electricity, Burke said.
Even though the utility in 2015 sold more energy to off-system customers
than it did in 2014, year-over-year revenues from those sales were down
12 percent.
That’s due in part to the added expense and overhead that accompanies
nuclear power generation; utilities competing with OPPD in the open
market that generate excess power via natural gas, for example, have a
leg up on the local utility because their fuel is cheaper and they don’t
have the increased regulatory scrutiny or physical infrastructure
driving up prices.
And despite a pending court challenge that has left in limbo President
Barack Obama’s plan that sought to restrict carbon emissions from power
plants, OPPD is determined to proceed with a power-generation plan that
reduces greenhouse gas emissions from its own facilities, Burke said.
The so-called federal Clean Power Plan offers utilities no incentive for
existing nuclear power, which is emission-free, despite a preliminary
proposal that would have included some nuclear generation offsets in
emissions calculations.
Despite having adopted a new generating portfolio plan in 2014, Burke
said, "Now we’re back two years later with complete market changes,
complete technology changes and more clarity around some of the
regulations."
Since then, the value proposition for maintaining operations at OPPD’s
sole nuclear power plant hasn’t gotten any better; Burke said even if
the federal emissions plan credited nuclear operators for reducing
emissions, the impact to the local utility would be negligible.
Part of Burke’s recommendation to the board includes replacing some of
Fort Calhoun’s 478.1-megawatt capacity with wind energy and natural gas.
Burke said not all of the nuclear plant’s capacity must be replaced
because demand isn’t forecast to rise as consumers’ homes and businesses
become increasingly energy-efficient.
If the board follows through on the recommendation, OPPD’s wind and
renewable generation will comprise 49 percent of the portfolio by 2020,
up from 38 percent that is currently forecast.
OPPD’s relationship with renewables grew in 2014 when the utility
approved a long-term generation plan that included the phase-out some of
its coal-burning units, conversion of others to natural gas and added
400 megawatts of wind power from a massive wind farm near O’Neill, Nebraska.
Under the plan presented Thursday, those plans remain intact, but Burke
said the most economically viable course is one that does not include
nuclear power and effectively ends more than 40 years of nuclear generation.
Contractors broke ground on Fort Calhoun Station on Feb. 9, 1968, and
the plant’s first sustained nuclear reaction was at 5:47 p.m. on Aug. 5,
1973.
Burke said he expects the plant to enter a "cold shutdown" in October of
this year, should the board proceed with the recommendation. In a cold
shutdown, pressure and temperature conditions within the plant’s nuclear
reactor are lowered to a level that prevents a nuclear chain reaction
from occurring.
From there, the utility will proceed with various regulatory
applications required to decommission the plant. That process includes
dismantling the facility, decontaminating it and safely disposing of
radiated materials.
Burke said radiated fuel rods likely would remain on the site — there is
nowhere else to transport them since a proposed radioactive waste
repository at Yucca Mountain in south-central Nevada is still in limbo.
For now, radioactive waste from nuclear power plants is stored on-site
in concrete casks.
Decommissioning can take 10 years under a process known as Decon, under
which the plant is immediately dismantled and contaminated materials are
either decontaminated or removed. In a deferred dismantling process
known as Safstor, facilities are maintained for a period of up to 60
years and radioactivity decays to a safe level.
OPPD in its 2015 annual report estimated the costs to decommission Fort
Calhoun would be about $884 million. The utility has socked away about
$373 million for those costs.
The board will take 30 days to consider management’s proposal, during
which time it will field concerns and suggestions from stakeholders and
ratepayers.
====================================================================
http://www.usnews.com/news/articles/2014/07/10/amid-alleged-war-on-coal-nebraska-plant-finds-path-forward
[video and images in on-line article]
Amid Alleged 'War on Coal,' Nebraska Plant Finds 'Path Forward'
Even as industry groups rail against new greenhouse gas emissions
limits, one public utility has found a way to switch from coal to gas
and wind – potentially setting an example for others.
By Alan Neuhauser | Staff Writer July 10, 2014, at 12:01 a.m.
In one of the reddest states in the nation, one utility is turning green.
As debate rages between industry and environmental groups over how new
emissions restrictions will affect coal-fired power plants, Nebraska’s
Omaha Public Power District announced last month that it will phase out
three coal units at a plant in the city of North Omaha by 2016.
Over the next 20 years, they will be replaced with wind and natural-gas
generators, plus a pair of upgraded coal plants, which together will cut
the facility’s greenhouse gas emissions by nearly half – a very big deal
in a city with an asthma rate that’s twice the national average. And the
estimated price increase? No more than 2 percent, the utility says.
“We knew we were going to have to make some changes with our current
fossil fuel generation,” says Tim Burke, Omaha Public Power District's
vice president of customer service and public affairs.
The main motivator, he says, was pure dollars and cents: Prices for
natural gas have fallen, tax breaks – since expired – had made building
wind turbines cheaper and those new emissions limits from the
Environmental Protection Agency would have made upgrading the plant's
60-year-old coal units a risky bet.
Indeed, over the past year, since President Barack Obama announced a
Climate Action Plan to address climate change, the EPA has rolled out a
range of new regulations for power plants, including limits on mercury
and other airborne toxins and, in a Clean Power Plan proposed June 2,
the first-ever federal limits on carbon emissions from existing power
plants.
Critics have blasted Obama and the EPA for declaring an alleged “war on
coal,” one they say could put coal plants and their operators out of
business.
OPPD’s transition in North Omaha from coal to wind and gas, however,
offers an alternative narrative. The utility, environmental groups
argue, has blazed a new trail – one that plenty of other coal operators
can follow.
“The fact that this happened in Omaha, Nebraska, shows that this can
happen in any part of the country,” says Emily Rosenwasser, deputy press
secretary of the Sierra Club, which joined a local coalition of
conservation, faith and community groups to push OPPD to take its coal
plants offline. “Politicians are railing against the Clean Power Plan,
but there are solutions being put in place in Omaha that are really
going to cut pollution and really put a local utility on an economical
path toward getting energy from wind.”
[ALSO: With Growing War Chest, Green Group Takes Aim at Climate Deniers]
As Duane Hovorka, executive director of the Nebraska Wildlife
Foundation, describes: “What they’re showing is the path forward.”
The coalition did have some factors working in its favor: OPPD, like
every other utility in Nebraska, is a public entity – its board members
are elected, making them more accountable to the public. For months,
advocates and local residents attended OPPD board meetings, urging
members to make clean power a part of the plant’s long-term plan. The
strategy appears to have worked.
“Instead of a knee-jerk, industry lobby-group response to these [EPA]
rules, Omaha took the chance to actually take a couple steps back, start
a stakeholders’ collaborative and start a conversation with its various
stakeholders across the community about how people wanted OPPD to supply
power,” says Holly Bender, deputy director of the Sierra Club's Beyond
Coal campaign.
Nebraska is also among the windiest and flattest states in the nation,
making it a prime location for wind turbines. Moreover, it is home to an
extensive natural gas infrastructure, which means implementing gas-fired
generators is a comparatively easy proposition compared to other states,
such as those in New England.
“It’s unique," Bender allows, "but the truth is that there’s no reason
it can’t be replicated.”
Experts, however, think it might not be that easy.
[MORE: Administration Eases Oil-Export Ban]
As gas prices have plummeted over the past decade amid a domestic
production boom, and especially as the EPA began introducing new
emissions limits, other utilities, public and private, have indeed
embraced gas, wind, and solar over coal. Duke Energy, for example, one
of the largest energy companies and carbon producers in the country –
and perhaps remembered most recently for spilling 39,000 tons of coal
ash into a North Carolina river – plans to shut down about 6,300
megawatts of coal power across four of its six utilities.
Yet many other states lack the gas infrastructure Nebraska boasts.
Still others don't have the same access to wind or solar energy, or
enough money to invest in new generating plants, or a diversified
portfolio allowing an easier switch between power sources, or a utility
board made up of elected officials.
"Each situation is going to be different," Burke, of OPPD, says. "But if
they engage their customers to make this decision, then I think it does
become a win win."
Still, there is a price: In making the switch between coal and other
energy sources, as many as 50 workers may lose their current jobs at
OPPD, Burke acknowledges. Some will be transferred and others are
expected to retire, but a few may be let go, he says.
“I’m not sure it’s necessarily a path or example, but I think it’s safe
to say there’s probably a linkage here between what’s come out from the
EPA and the kinds of decisions people have to make like this on whether
or not to invest to continue to run a coal-fired plant,” says Larry
Mackovich, chief power strategist at the consulting firm IHS. “With the
emergence of climate change as a serious environmental problem that
people care about in the political sphere, you’re seeing then that power
itself and decisions about fuel and technology has moved out of the
realm of engineering economics into a bigger realm that includes a lot
of political and public influence.”
And that could mean, just as in Omaha, consumers find themselves holding
real power over where they get their electricity.
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