Don’t expect Xcel Energy to pursue new nuclear anytime soon

The daunting cost and turbulent market dynamics make it highly unlikely that Xcel Energy (NYSE:XEL) would develop a new nuclear reactor unit anytime soon, Xcel’s Managing Director of Resource Planning Kurt Haeger said May 5.

Haeger made his comments in response to a question asked by a participant at the TransForum West conference in Denver. TransForum West is organized by PennWell’s TransmissionHub news service.

Developing 700 MW to 1,000 MW of new nuclear generation might cost up to $10bn, Haeger said in response to the question. That represents a huge chunk of the overall value of many utility holding companies, the Xcel Energy official said. That price tag, coupled with the many years required for planning, licensing and eventual construction, might prove to be a tough sell to potential financiers, Haeger said.

Xcel Energy operates the Monticello and Prairie Island nuclear plants in Minnesota. “We just went through a really tough hearing in Minnesota,” Haeger said, alluding to the prudence case for upgrade work at the Monticello nuclear plant.

In addition to increasing power output, the company also ended up having to implement costs Fukushima-inspired safety improvements. Costs increased significantly and the process was “painful” all the way around, Haeger said.

The question-and-answer session came after Haeger had delivered a presentation on the increasing complexity of planning for electric generating capacity.

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.