Omaha utility to shutter Fort Calhoun nuclear facility

Dive Brief:

The board of directors of Omaha Public Power District Board this week voted unanimously to retire the Fort Calhoun nuclear station by the end of the year, determining closure was "in the best financial interest of the district and its customer-owners," Power Magazine reports.
Closing the plant means customers will not face a general rate case within the next five years, the board said, helping maintain the utility's goal to offer rates 20% below the regional average. Mothballing the plant could save consumers almost $1 billion over the next two decades.
The move builds on a growing trend of nuclear plants being challenged by unfavorable market conditions. OPPD cited low natural gas prices, the Clean Power Plan and a lack of scale as drivers of the decision.

Dive Insight:

This latest closue underscores the difficulities nuclear facilities are facing in today's market. The announcement follows behind Exelon's bid to shut down its Clinton and Quad Cities facilities, after legislation to subsidize them did not pass in the latest session of the Illinois legislature.

OPPD has voted to close Fort Calhoun just a month after floating the idea, pressured by unfavorable market conditions and a higher cost-structure than competitors.

“This was a difficult vote and one we did not take lightly,” Board Chair Mick Mines said in a statement. “The industry is changing and it is imperative that we make strategic decisions to better position the district in the future for all our 365,000 customer-owners.”

Any rate increases will be staved off at least through 2021, the utility said. Senior management recommended closing the plant last month after a review of various resource portfolio scenarios. Modeling conducted by a third party, Pace Global, showed closing the plant and rebalancing the the utility's portfolio could save the district between $735 million and $994 million over the next 20 years.

"Market conditions are a major factor," the board said. "Historically low natural gas prices are a contributing factor; they reduce OPPD’s cost to generate electricity using natural gas. In addition, consumers are using less energy."

OPPD also pointed to the Clean Power Plan, noting that it does not give carbon-free generation credit for existing nuclear plants. And the plant's economies of scale were also an issue, with FCS operating as the smallest rated commercial unit in North America.

“As tough as this decision is, we cannot afford to ignore the changes happening around us. We must look to the future," said OPPD President and CEO Tim Burke. “We will move forward through the decommissioning process in a responsible and thoughtful manner," adding that decommissioning will take several years.

Fort Calhoun Station costs about $250 million annually to operate the plant, and OPPD gets about a third of its generation from the facility. Officials say they will continue to look at resource options, including construction of new natural gas, wind and solar generation, and and increasing demand side management.