Regulators allow Dominions purchase of Kewaunee

29 March 2005

On 17 March, regulators in the US state of Wisconsin reversed an earlier decision and approved the sale of the single unit Kewaunee plant to Dominion Resources, based in the state of Virginia.

The unanimous decision by the three-member Public Service Commission of Wisconsin (PSCW) came after Dominion agreed to additional provisions that the commission had determined were needed to protect Wisconsin ratepayers. The decision reversed an earlier order rejecting the sale (see NEI December 2004). As NEI went to press, PSCW had not issued its new order spelling out the terms of the final decision.

Kewaunee’s current owners, Wisconsin Power and Light (WP&L) and Wisconsin Public Service (WPS), propose to sell the 543MWe plant to Dominion for $220 million. The sale means that Wisconsin “ratepayers will not be saddled with the possible costs of running and maintaining the ageing facility and costs associated with relicensing the nuclear power plant,” according to a PSCW statement.

To obtain approval, Dominion agreed to provide power to customers in the Kewaunee service area, which includes the city of Green Bay and residences in four surrounding counties, at favorable rates until 2014, when the plant’s current operating licence expires. The new conditions also increase the amount Dominion guarantees to pay WP&L and WPS if it cannot provide the power.

The conditions establish a legal procedure to ensure that WP&L and WPS will have first right of refusal if Dominion decides to sell the plant, and that approval conditions, such as the agreement not to import radioactive wastes from other plants and to return the site to greenfield conditions after decommissioning, will follow on to future owners.

Dominion also agreed to return to ratepayers money from one of the plant’s two decommissioning funds. Dominion will receive approximately $400 million from one of the funds and will return $193 million from the other fund to ratepayers after the sale. Any money left in the first fund after decommissioning work is complete also must be returned to ratepayers.

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