Fort Calhoun Nuclear Power Plant to Close by Year-end

The Omaha Public Power District (OPPD) board of directors voted unanimously on June 16 to close Fort Calhoun Station, the smallest nuclear power plant in the U.S., due to economic reasons.

In April, OPPD Board Chairman Mick Mines asked senior management to develop potential scenarios regarding future power resources. Tim Burke, president and CEO of OPPD, recommended closure of the plant during the board’s May meeting, but the board chose to review the proposal for a month before making a decision.

With today’s vote, Fort Calhoun becomes the twelfth U.S. nuclear unit to close or announce plans to close since October 2012. Many of the plants have been small, single-unit facilities facing economic difficulties similar to Fort Calhoun. But the recently announced closure of Quad Cities station, an 1,871-MW dual-unit facility in Illinois, demonstrates that current market prices—driven low by the abundance of natural gas in the U.S.—can affect any size nuclear plant.

U.S. Secretary of Energy Ernest Moniz acknowledged that economic trials are facing nuclear plants during a May 19 summit on “Improving the Economics of America’s Nuclear Power Plants.” Moniz said, “When this fleet of reactors was built, it was a very different market structure. It’s that change of market structure that has posed at least many of the challenges.”

The Omaha World-Herald reported that it had conducted analysis of OPPD’s financial information and found that electricity supplied by the plant cost more than $71/MWh in 2015. The cost is substantially higher than the roughly $20/MWh that OPPD can buy and sell power for on the open market.

According to the plan approved by the board, Fort Calhoun will cease commercial operations by December 31, 2016.

OPPD will begin the decommissioning process this year using the SAFSTOR methodology, which places the facility in a safe, shutdown condition, allowing radioactive elements to decay over time. Using this method, owners have up to 60 years before the site must be decontaminated to levels that permit release for unrestricted use.

In the short-term, OPPD plans to replace Fort Calhoun’s capacity by extending operation of its North Omaha Units 1, 2, and 3 through at least 2018 and purchasing capacity from other Southwest Power Pool participants. An integrated resource plan will be utilized in the long-term to finalize capacity replacement options.

“This has never been about employees. It’s never been about our partners. It’s been about a facility that has an economy-of-scale issue, has market forces that are fighting against it, that’s creating the current situation that we’re in,” said an emotional Burke (Figure 1) before the vote was taken. “It is what it is.”

1. OPPD President and CEO Tim Burke (right) answered a question posed by a customer who questioned the decision to close Fort Calhoun during the June 16 board meeting, while Board Chairman Mick Mines (left) looked on. Source: OPPD

Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)

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