Wisconsin Energy chief thinks state needs fresh look at nuclear power

Wisconsin Energy (NYSE: WEC) CEO Gale Klappa believes it’s time for the state of Wisconsin to put the nuclear option back on the table.

The state has had what amounts to a moratorium on new nuclear plant construction since 1983. The state policy bars new power reactors until there is a federally licensed spent fuel repository with enough capacity to handle the waste from all nuclear power plants in Wisconsin.

But Klappa recently told a Milwaukee business group that the state needs to start thinking about replacing the generation from its two existing nuclear plants.

The plants are NextEra Energy‘s (NYSE: NEE) Point Beach and Dominion’s (NYSE: D) Kewaunee plant. The state needs to start thinking about new nuclear generation as an option when those facilities approach retirement, Klappa said.

On Oct. 9, a Wisconsin Energy spokesperson confirmed Klappa’s comments, which were published in the Milwaukee Business Journal. The comments came during a question-and-answer session and were not part of the CEO’s prepared remarks. This was not the first time, however, that Klappa has publicly endorsed lifting the nuclear ban, the spokesperson said.

The spokesperson noted that Wisconsin Energy no longer holds an ownership interest in Point Beach, although it still buys power from the nuclear plant.

Point Beach Units 1 and 2 are currently licensed to run through 2030 and 2033 respectively, according to the NextEra website. Likewise, Kewaunee has also had its original license extended by 20 years, allowing it to run until 2033, according to the Dominion website.

Klappa has suggested that any utilities interested in building new nuclear units in the state would probably want to start the planning process by 2020.

Wisconsin Energy spending on environmental controls, biomass

As far as Wisconsin Energy’s own generation, it recently completed a $900m emission control project at the Oak Creek coal plant.

Wisconsin Energy is also developing a $255m biomass plant that should enter commercial operation in 2013. The plant is under construction in Rothschild, Wisc., at the site of a paper mill. The 50-MW plant will use wood waste from northern Wisconsin forests to provide steam for the paper mill and electricity for the grid. The biomass facility should help Wisconsin Energy meet the state’s renewable energy standard of 10% by 2015, the spokesperson said.

During a Bank of America Merrill Lynch conference in September, Klappa also said that Wisconsin Electric will rebuild 2,500 miles of electric distribution lines that are more than 50 years old.

Wisconsin Energy has also announced plans to convert the old Valley power plant in downtown Milwaukee from coal to natural gas. The conversion project should be complete in 2015 or 2016 – following completion of an upgrade to an existing gas line. The conversion project is expected to cost $60m to $65m.

Wisconsin Energy has said it is investing up to $3.5bn in needed infrastructure projects through 2016.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.