Omaha Public Power District (OPPD) has confirmed that the US Fort Calhoun NPP in Nebraska is to be permanently shut down by the end of this year. Decommissioning of the single-unit pressurised water reactor unit will begin immediately after shutdown, OPPD said. The plant is owned and licensed to OPPD, and has been operated by Exelon since 2012.

The decision follows a recommendation made by senior managers at the plant last month, based on a review of the utility’s resource planning for the future. That review was requested by OPPD board chairman and CEO Mick Mines in April. OPPD said its board had decided the move was "in the best financial interest of the district and its customer-owners".

Mines said the decision had not been taken lightly. "The industry is changing and it is imperative that we make strategic decisions to better position the district in the future for all our 365,000 customer-owners," he said. "As tough as this decision is, we cannot afford to ignore the changes happening around us. We must look to the future."

OPPD cited market conditions, including historically low natural gas prices and lower energy consumption, as a major factor behind the board’s decision. The utility also cited the failure of the USA’s Clean Power Plan – the US Environmental Protection Agency’s proposed programme to reduce carbon dioxide emissions from power generation by 30% from 2005 levels by 2030 – to give existing NPPs such as Fort Calhoun credit for their carbon-free generation.

The company also considered economies of scale. Fort Calhoun, a 482MWe unit that started commercial operation in 1973, is the smallest operating nuclear unit in the USA in terms of its accredited capacity. Unlike larger and multi-unit nuclear plants it cannot spread costs over high levels of production. However the NPP accounts for 34% of OPPD’s total electricity generation and 9% of Nebraska’s electricity. OPPD said: "According to extensive modelling conducted by a third party, Pace Global, ceasing operations at Fort Calhoun and rebalancing the generation portfolio will save the district between $735m and $994m over the next 20 years." The unit underwent extensive operating and safety systems upgrades during an extended outage between 2011 and 2013.

The US Nuclear Energy Institute president and CEO Marvin Fertel said: "As recently as 2011, the US had 104 reactors operating in 31 states. Fort Calhoun represents the 12th reactor to close or be announced for premature closing in recent years. This is due in part because the full value of nuclear power plants is not recognised in the price of electricity."

OPPD said it will use the Safestor decommissioning option, a deferred dismantling strategy where residual radioactivity is allowed to naturally decay over a period of up to 60 years, after which the plant is dismantled. The company said this approach would provide both regulatory and financial flexibility. The cost is estimated at $1.2bn. OPPD had anticipated having full funding available for a 2033 decommissioning date, when the unit’s current operating licence expires. At the end of May, OPPD said it had about $388m in total available decommissioning funds, but will add to the fund annually to allow for decommissioning ahead of 2033.