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Kewaunee Power Station To Close In 2013

Dominion's senior vice president of nuclear operations says the decision to close the nuclear power plant in Kewaunee was a difficult but a necessary one.

Dan Stoddard says although there was more than one factor that went into the decision, the primary reason for the move is economic -- namely the lower price of energy.

Stoddard says other reasons for the move include Kewaunee's smaller plant size, the 2013 expiration of power purchase agreements, and being "somewhat geographically isolated" from other company assets and not having other units around for economies of scale.

Dominion announced Monday that the Kewaunee Power Station will be closed and decommissioned in the second quarter of 2013 after it was unable to find a buyer for the 556-megawatt nuclear facility. The plant had been for sale since April 2011.

The station, located about 9 miles south of Kewaunee, employs about 650 workers.

Stoddard says he met with plant leaders Monday morning and then shared the news with employees.  

When he met with members of the media Monday, Stoddard didn't want to offer specifics in terms of what help Dominion would offer displaced employees, but Dominion's nuclear public affairs manager Richard Zuercher says the company does plan to provide assistance.

"The company is offering employees benefits, severance and we are providing opportunities for them," says Zuercher. "They can still apply within the larger company, but we are also looking at providing help for them in looking for new work." 

The plant has been in operation since 1974 and in February 2011 received a 20-year license renewal from the Nuclear Regulatory Commission.

Earlier Story:
Dominion announced Monday it plans to close and decommission its Kewaunee Power Station in Carlton, Wis., after the company was unable to find a buyer for the 556-megawatt nuclear facility. Pending a grid reliability review by the Midwest Independent Transmission System Operator (MISO), the station is expected to cease power production in the second quarter of 2013 and move to safe shutdown.

Dominion announced in April 2011 that it would seek to sell Kewaunee as part of a regular review of its portfolio of assets to determine which assets fit strategically and support its objectives to improve return on invested capital and shareholder value. The company was unable to find a buyer for the facility.

"This was an extremely difficult decision, especially in light of how well the station is running and the dedication of the employees," said Thomas F. Farrell II, Dominion chairman, president and CEO. "This decision was based purely on economics. Dominion was not able to move forward with our plan to grow our nuclear fleet in the Midwest to take advantage of economies of scale. In addition, Kewaunee's power purchase agreements are ending at a time of projected low wholesale electricity prices in the region. The combination of these factors makes it uneconomic for Kewaunee to continue operations."

Farrell said the company's top priority will be a continued focus on safety.

"We intend to take all steps necessary to ensure the protection of the public, employees and the environment during the remaining period of power generation, as the station is shut down, and throughout the decommissioning process," Farrell said. "We will be vigilant, and we plan to make sure the facility has the resources it needs."

The station, which has about 655 employees, will remain under the oversight of the Nuclear Regulatory Commission (NRC) throughout the decommissioning process.

Following station shutdown, Dominion plans to meet its obligations to the two utilities that purchase Kewaunee's generation through market purchases until the power purchase agreements expire in December 2013.

"One thing that should be perfectly clear is that the employees of Kewaunee have been doing an outstanding job, and this decision is in no way a reflection on them," Farrell said. "I want to thank them for all they have done, and Dominion will work to make the transition as smooth as possible for them and their communities. I also want to thank Governor Walker and other elected officials for their help and support since we purchased the station back in 2005. We regret leaving the positive business environment the State of Wisconsin provides."

Kewaunee Power Station, located on Lake Michigan about 35 miles southeast of Green Bay, began commercial operation in 1974. It has one Westinghouse pressurized water reactor. Dominion acquired the station in July 2005. In February 2011, the NRC renewed the station's operating license for an additional 20 years, until 2033.

Farrell said Dominion still firmly believes that nuclear energy must play an important part in the nation's energy future.

"History has proven that nuclear energy is a major reason the United States enjoys one of the most reliable, least expensive and cleanest electric grids in the world," he said. "The situation Dominion faces at Kewaunee is the result of circumstances unique to the station and do not reflect the nuclear industry in general. The nation will be hard-pressed to meet its energy needs, let alone do so in a secure and affordable manner, without a robust and growing nuclear energy program."


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