Two states lift long-term bans on new nuclear reactors 

Minnesota and Kentucky open options to secure their long-term energy security

Winds of change are blowing for the better for nuclear energy in two states – Minnesota and Kentucky. Both states rely heavily on coal which makes what is happening all the more significant. 

Coal from North Dakota that fires new power plants in Minnesota won't last forever, and could in future years become subject to an expensive carbon tax.

Legislators in Minnesota, which already has two nuclear power stations, have reopened options to build more. Similarly, Kentucky, which is a big coal state, is considering lifting its ban on new reactors linking that action to enhanced employment at the Paducah uranium enrichment plant.

The Minnesota Senate voted 50-14 to repeal the state's 17-year old moratorium. The bill now goes to the House where it is expected to pass. In Kentucky, a bill offered by State Sen. Bob Leeper, S.34, was passed by the Senate Natural Resources & Energy Committee. This is the fourth time Leeper has sponsored the bill and the first time he's made progress with it.

Both states had enacted bans on construction of new nuclear reactors because the federal government had failed to develop a comprehensive solution to management of spent nuclear fuel. Minnesota has two nuclear power stations – one reactor at Monticello and two at Prairie Island. Kentucky is a big coal state which does not have any nuclear power stations. However, it is home to USEC's Paducah-based gaseous diffusion uranium enrichment plant.

Minnesota

No one in Minnesota expects the passage of the legislation lifting the ban to result in immediate efforts to build a new nuclear reactor at either of the two existing sites or anywhere else. Senate Majority Leader Amy Koch (right) told the Star-Tribune the measure is designed to open options for the future energy security of the state.

"I believe very strongly that Minnesota should not move into the future with one hand tied behind their back."

Minnesota Gov. Mark Dayton said if the federal government can find a solution to long-term storage of spent fuel that would make him more confident about supporting a new nuclear reactor in his state.

Koch also said she supports allowing utility to charge rate payers for its construction while it is being built. Otherwise, she said, it will be impossible for a utility to arrange the financing for one.

It could be some time before any of Minnesota's utilities initiate work on plans for a new reactor. Xcel Energy (NYSE:XEL) told the Star-Tribune it sees no need for new baseload plants for at least the next 15 years. Xcel's two nuclear power stations supply 12% of the state's electricity. The recession has cut demand for power.

The main uncertainty to pursue building a new reactor isn't cost, though that is a factor. A spokesman for the utility said the key issue is the length of time it would take, and the cost, of getting an NRC license.

Currently, the NRC takes about four-to-five years to review an application which can cost a utility $50 million. Even if it gets combined construction and operating license, anti-nuclear groups like the Sierra Club have vowed to file actions in court over the lack of a permanent management plan for spent fuel.

Sometime in the next two decades the current fleet of coal-fired plants will require replacement. According to the Energy Information Administration, coal provides more than three times electricity than nuclear energy in Minnesota. A decade from now the nation could have a carbon tax that would change the economics of new baseload construction.

The future of the state's three reactors suggests planning for new reactors would need to begin sometime in the next five years. The license for the Monticello reactor was renewed on November 8, 2006. The new license will expire September 8, 2030. On April 15, 2008, a license renewal application was submitted for both reactors at the Prairie Island plant. The license for Prairie Island Unit 1 expires August 2013 while the license for Prairie Island Unit 2 expires October 2014.

Kentucky

Tenacity may be the new middle name for Kentucky State Sen. Bob Leeper, (right) an independent legislator from Paducah. In his fourth try he finally got the Senate Natural Resources & Energy Committee to vote 7-3 in favor of a bill to overturn the moratorium on new nuclear reactors in the state. A 1984 law bans new reactors until the federal government executes a plan for permanent management of spent nuclear fuel.

Opposition to the change comes from the Kentucky Resources Council which told the legislature the reason for the ban, the lack of a solution for spent fuel, hasn’t changed which means Kentucky should not allow new reactors to be built within its borders. Also, Tom FitzGerald said that cost over runs for new nuclear reactors made them an unwise investment.

The measure has the backing of Kentucky Governor Steve Beshear. Passage of the measure by both houses this term seems likely Leeper said.

Leeper said he made the case for lifting the ban because of the importance of having a balanced energy mix and to promote jobs in his district which is home to the USEC gaseous diffusion uranium enrichment plant.

Recently, USEC announced plans to keep the plant open beyond 2013 by processing depleted uranium. It is a major electricity customer for TVA and has the basic infrastructure to support construction of a new reactor.

Leeper may have gotten the idea about promoting a new reactor at the site of a uranium enrichment plant from the announcement last year that Duke Energy and Areva are looking at an opportunity to build a new nuclear reactor near the USEC uranium enrichment plant located in Piketon, OH.

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