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Nuclear plant upgrades will move forward

Xcel Energy is no longer seeking a power uprate at its Prairie Island nuclear plant, but planned improvements to facilities and equipment will go on anyway.

"We have continued to invest in Prairie Island from the day we started operating it," Terry Pickens, director of nuclear regulatory policy for Xcel, told attendees at a meeting Tuesday night with Xcel representatives and Red Wing City Council members.

The company started questioning the proposed power uprate last year and in October 2012 filed a statement with the Minnesota Public Utilities Commission saying it believed the uprate "is not in our customers' best interest."

The uprate would have increased the generating capacity of the plant's two reactors, allowing them to put out more power.

Typically Xcel puts about $10 million to $15 million per year into capital work for each unit at Prairie Island, Pickens said. But as the plant approaches 40 years of operation and prepares for another 20, sets of investments have been grouped together that will update the facility.

Those improvements include steam generators for Unit 2, high-pressure turbines, dry-cask storage upgrades and other work at the plant.

"Even with the decision not to go forward with the extended power uprate, these actions will be taken," Pickens said. If the uprate was going to occur, the work would just be done to a greater extent, he said. The upgrades will run close to $500 million to $600 million, he said. Work will start with the steam generators for Unit 2 being replaced during the planned 2013 fuel outage. Other work will continue in the next few years, Pickens said.

The plant also has discovered ways to better utilize current equipment and operations. More accurate equipment will allow the plant to produce slightly more power while still operating safely, for example.

Also, the plant started using wider fuel rods in 2009 in preparation for the power increase, Pickens said. But now that extra fuel will simply last longer, cutting down unit refueling outages to every 20 to 23 months instead of the previous 18 to 20 months.

The upgrades have a big impact on the city of Red Wing's budget. Mary Landstrom, tax reporting director for Xcel, said estimates show Xcel will see a 50 percent increase in its property taxes from 2012 to 2017.

But the city won't see those extra funds unless it increases the levy.

"Just because you're paying more ... that doesn't mean the city is getting more," Council member Lisa Bayley noted.

Instead, if everything else remained the same, Xcel would pay higher property taxes but other taxpayers would see their bills go down. The city wouldn't garner any extra money -- Xcel would just be paying more toward the total and others would pay less.

The city is planning to increase the levy to "capture" those extra funds from Xcel Energy. That increase likely won't have a significant effect on other local property taxpayers.

City officials are hoping to use the increase in tax funds to tackle a backlog of infrastructure maintenance and repairs.

Xcel Energy is the largest property taxpayer in Minnesota, Landstrom said. Utilities pay more than other businesses because equipment is included in their valuations along with land and buildings.

Danielle Killey

Danielle Killey covers local government for the South Washington County Bulletin. She has worked as a reporter for other Forum Communications newspapers since 2011. She graduated from the University of Minnesota-Twin Cities with a journalism degree.

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