NextEra Energy Resources, the wholesale power generating subsidiary of Florida-based NextEra Energy Inc., announced it has struck a deal to shorten its power purchase agreement (PPA) with Alliant Energy and will retire the Duane Arnold Energy Center (DAEC)—a 615-MW nuclear power plant located in Palo, Iowa—before the end of 2020.
DAEC’s reactor is licensed with the U.S. Nuclear Regulatory Commission to operate until February 21, 2034, but it was expected to close in 2025 when the PPA with Alliant was originally slated to expire. If the agreement to cut five years from the term is approved by the Iowa Utilities Board, Alliant would pay NextEra $110 million in September 2020 as part of the buyout. Furthermore, NextEra would supply Alliant’s customers with wind energy from four of its repowered Iowa wind facilities—about 340 MW of combined capacity—under other PPAs. The transactions are expected to save customers nearly $300 million in energy costs, on a net present value basis, over 21 years, according to NextEra.
The DAEC is the only nuclear power plant in Iowa. It was constructed in the early 1970s, entering commercial operation in February 1975. It was built in a low-risk seismic area on the Cedar River about 8 miles northwest of Cedar Rapids. With a plant elevation 20 feet above river level, it was well protected against flooding, even continuing to operate during a “500-year flood” that occurred in 2008. Nonetheless, the facility faced similar financial struggles as other relatively small single-unit nuclear plants across the country.
Aaron Larson – Power – July 29, 2018.
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