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Powering down: Iowa's only nuclear plant nears end

Palo facility can't compete with cheaper sources of energy

The NextEra Energy Duane Arnold Energy Center in Palo will cease operations at the end of 2020, after about 46 years of operation. (Jim Slosiarek/The Gazette)
The NextEra Energy Duane Arnold Energy Center in Palo will cease operations at the end of 2020, after about 46 years of operation. (Jim Slosiarek/The Gazette)
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PALO — Behind secure doors and housed in concrete and steel, the uranium fuel in Duane Arnold Energy Center’s reactor produces about 600 megawatts of emissions-free power — close to 8 percent of Iowa’s energy generation.

But after 45 years of operation, the state’s only nuclear power plant is slated to close. The plant’s Florida-based owner, NextEra Energy, announced last summer that Duane Arnold would end energy production by the end of 2020.

Despite its reputation as a well-run and reliable plant, Duane Arnold joins a growing list of single-unit nuclear plants across the nation embarking on the long decommissioning process.

For Duane Arnold, plant site Director Dean Curtland said the Palo facility, which employs nearly 600 people, no longer fits in Iowa’s changing energy portfolio.

“We’re an industry leader, we run extremely well,” Curtland said. “But of all the nuclear plants built, we’re on the smaller side, so our costs are spread across fewer megawatts.”

CHANGING LANDSCAPE

While Duane Arnold has represented a consistent source of energy since coming online in 1974, Curtland said it has become outpriced by cheaper energy sources.

Similarly-staffed single-unit nuclear plants generate about 800 to 900 megawatts, but Duane Arnold is a 600-megawatt plant. What’s more, Iowa’s energy portfolio has seen renewable power — particularly wind energy — grow significantly.

About a third of Iowa’s energy generation — more than 7,300 megawatts — comes from wind. The Iowa Environmental Council estimated last year that 2,600 megawatts worth of wind turbines were under construction and another roughly 1,800 megawatts were in advanced development.

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And fracking has brought down the cost of natural gas in recent years, making the energy source more attractive.

Over time, those sources have overshadowed the small nuclear plant at 3277 DAEC Road, Curtland said.

“If you look at what our cost to produce is, if you look at a normal day, we can’t meet that wholesale price,” he said.

In addition to Duane Arnold, eight other nuclear plants have announced plans to permanently shut down in the coming years, according to the U.S. Nuclear Regulatory Commission.

The commission reports that approximately 20 nuclear power reactors in the United States are currently undergoing decommissioning or permanent shut down.

NEW AGREEMENT

The power purchase agreement between Alliant Energy — which utilizes 70 percent of the plant’s energy generation — and NextEra originally was slated to run through 2025.

However, in December, the Iowa Utilities Board approved a settlement between the two companies to shave five years off the agreement.

Alliant will have to make a $110 million buyout payment to NextEra at the end of 2020 and, if savings are not realized, the affected parties could seek recovery, according to settlement documents.

Alliant and NextEra officials have said closing the plant will save as much as $300 million over 21 years. That is expected to translate to about a 3 percent monthly savings, or about $42 a year, for Alliant’s residential customers starting in 2021. Commercial and industrial customers will see a roughly 2.3 percent fuel cost savings.

More photos, large display

Photographer Jim Slosiarek captured these images for Sunday's Gazette article about the NextEra Energy Duane Arnold Energy Center in Palo, Iowa. After 45 years of operation, the state's only nuclear power plant is slated to close. The plant's Florida-based owner, NextEra Energy, announced last summer that Duane Arnold would end energy production by the end of 2020.

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“Really our customers could start seeing that cost differential, that cost reduction, as early as 2021. We negotiated an agreement that was at lower costs for customers compared to just letting the agreement run through 2025,” said Terry Kouba, president of Iowa Power and Light and senior vice president of Alliant Energy.

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Besides NextEra, Des Moines-based Central Iowa Power Cooperative and Humboldt-based Corn Belt Power Cooperative own 20 percent and 10 percent stakes in the plant, respectively.

Bill Cherrier, executive vice president and chief executive officer of Central Iowa Power, said the news that Duane Arnold was set to close five years early caught some by surprise. He said he first heard last July that the plant’s power agreement would end in 2020,

“Typically in our industry, when you’re replacing power or plant capacity, usually you want at least five years or more. So it isn’t something you just can do in six or 12 months,” Cherrier said. “When we understood that it would be closed by the fall of 2020, we really started working in earnest ... to figure out what all the options were.”

The cooperative had announced plans a year earlier for the Heartland Divide Wind Energy Center, a more than 100-megawatt wind farm. Following the announced closure of Duane Arnold, it has doubled down on renewables with plans for a 100-megawatt Wapello Solar project, which is expected to open in late 2020.

Alliant has agreed to purchase about 340 megawatts of power from four NextEra-owned Iowa wind facilities to help make up for Duane Arnold’s impact.

WALL OF MEMORIES

Inside Duane Arnold, near the lobby area, signatures have begun appearing on the wall.

Curtland said he once constantly had to remind employees to not write their name on the walls of the plant, but people always felt the need to leave their mark, he said.

“There’s something about people writing their name on the wall, I never figured it out and it used to drive me crazy,” he said.

But with the plant slated to close, Curtland said he caved. The spot in the lobby has been dedicated to the plant’s employees, who are encouraged to leave a signature and sentiment on the wall.

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“It is pretty touching what a lot of people have written,” Curtland said. “So you know, it’s kind of just a way for people to kind of say, ‘You know what I’m proud to be part of the legacy of Duane Arnold.’”

About half the plant’s staff lives in Cedar Rapids, with others spread out among communities including Palo, Robins and Vinton.

Peter Robbins, director of nuclear communications with NextEra, said many Duane Arnold employees will transfer to other NextEra facilities. Others might take early retirement.

By the end of next year, Duane Arnold’s boiling water reactor will shut down production and nuclear material in Duane Arnold’s reactor will be held temporarily in a spent fuel pool. Ultimately, fuel will be removed from the plant and housed in an existing nearby facility.

What was once a staff of more than 500 specialists — more than double that during fuel outage operations — eventually will be reduced to a crew of about 50 tasked with monitoring the plant.

After the material is removed, Curtland said NextEra has a few options on how to proceed with decommissioning.

While nothing is determined at this point, a likely option, at least in the coming years, is to secure the plant and weigh the possibilities, Curtland said.

“To the average person driving by, they’ll see the plant sitting there looking like it has for years,” Curtland said. “The only difference is no plume off the cooling towers.”

• Comments: (319) 398-8309; mitchell.schmidt@thegazette.com

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