Nuclear Power in Minnesota

Monticello Nuclear Generating Plant. Nuclear Regulatory Commission, at

Two nuclear stations in Minnesota, Monticello and Prairie Island, produced 23% of the state’s energy last year. Both were built in the 1970s. Between the three reactors at the two plants, they have a maximum capacity of 1,594 megawatts (MW)—enough to power more well more than a million homes. For those curious about how they work, the folks at Minnesota State Mankato have a nifty explainer on the Monticello plant here.

Regulated utilities, like those in Minnesota, must balance the public good of reliable, cheap, clean power with the private good of profit. The Minnesota Public Utilities Commission (MNPUC) approves capital investments, sets rates, approves utility programs, and reviews utility records, among other functions. In exchange utilities in Minnesota make a guaranteed return on investment in a regulated environment. Regulated utilities traditionally seek profit through large capital investments, like nuclear power plants. Ratepayers—anybody with an electric bill—pay for the capital investments, plus a return for the utility, over time.

According to the federal Energy Information Agency, the Monticello plant cost $554.7 million to build in 1971, in 2017 dollars. The Prairie Island facility, which features two reactors, cost more than $1 billion in 2017 dollars when it was completed three years later. Monticello employs roughly 500 full-time employees; Prairie Island, about 700. Anecdotal information from online job boards suggests salaries range from just under $40,000 for security guards to six-figures for many of the quality assurance positions.

As recently as February of 2016, Xcel Energy, which owns both nuclear stations, mulled the retirement of the aging Prairie Island facility, which is licensed to operate by the Nuclear Regulatory Commission until 2034. In that filing with the MNPUC, Xcel noted that the plant needed $175 million more in maintenance and operation costs than had been expected in its previous rate case, in 2012.

In the last six years, Xcel has spent $800 million in upgrades at the facility, and expects to spend another half-billion before 2020. While the bulk of these expenditures have already been approved in rate cases before the PUC, Xcel forecasts another billion dollars to keep Prairie Island running through the end of its licensure, and another $420 million for Monticello. The state legislature has clashed with the state Department of Commerce and the Chamber of Commerce over the process to pay for these costs. Whichever process wins out, ratepayers will bear the cost. The debate will resolve when and how much it will cost consumers.

As Minnesota’s small nuclear fleet ages, it has fared better than many facilities across the country. In recent years 14 reactors across the country have closed or announced closure. Only one reactor has come online since 1996, Unit 2 at the Watts Bar facility in Tennessee; the first reactor at that facility began operation more than 40 years ago. The new reactor has run into trouble during its infancy. Other projects in the South have ceased construction altogether before operation.

The decline of the nuclear industry in the United States has produced some strange bedfellows. Climate hawks point out that nuclear plants, once built, produce zero-carbon electricity. Xcel Energy, the only nuclear utility in Minnesota, claims that operating costs for their plants are among the lowest-cost to operate, and generate $2 in economic activity for every $1 spent. The Trump administration has argued for, so far lost, but not given up, a national regulatory scheme that would reward baseload power—coal and nuclear, which stay on for vast stretches of time, and take several hours to ramp up or down—for grid resilience.

Nuclear technology has improved since the 1970s. In the 21st century, the federal Department of Energy has pushed so-called small modular reactors, which cost less, and “offer distinct safeguards, security and nonproliferation advantages.” Despite these advantages the technology has struggled to gain adoption.

No new nuclear plant of any kind will be built in Minnesota, so long as the state’s moratorium remains law. That moratorium will likely remain in place until a permanent storage solution for nuclear waste emerges. And, as at least one critic has noted, the solution hasn’t come from lack of trying. Minnesotans have grappled with the issue for decades.

Minnesota’s three nuclear reactors have roughly a decade-and-a-half of licensure left. During that period they will help Xcel meet its carbon-reduction goals, and continue to provide more jobs than coal, both in total and on a per-megawatt basis. Every refueling or refurbishing project—30 of them in 44 years at the Prairie Island facility—will not only support hundreds of high-skill Minnesota jobs (not Homer), but also thousands of specialist contractors.

Nuclear energy may present Minnesota ratepayers with the occasional high bill, but a wide array of stakeholders would seem to ensure its place in Minnesota for the time being.



* EIA data gives 2007 dollars, which were converted using the Bureau of Economic Analysis tool for nonresidential fixed investments.