Xcel Energy 2006 Annual Report Download - page 23

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Nuclear power plant operation produces gaseous, liquid and solid radioactive wastes. The discharge and handling of such wastes are
controlled by federal regulation. High-level radioactive wastes primarily include used nuclear fuel. Low-level radioactive waste
consists primarily of demineralizer resins, paper, protective clothing, rags, tools and equipment that have become contaminated
through use in the plant.
Low-Level Radioactive Waste Disposal — Federal law places responsibility on each state for disposal of its low-level radioactive
waste generated within its borders. Low-level radioactive waste from NSP-Minnesota’s Monticello and Prairie Island nuclear plants is
currently disposed at the Barnwell facility located in South Carolina (all classes of low-level waste) and at the Clive facility located in
Utah (class A low-level substance only). NSP-Minnesota has an annual contract with Barnwell, but is also able to utilize the Clive
facility through various low-level waste processors. NSP-Minnesota has low-level storage capacity available on-site at Prairie Island
and Monticello that would allow both plants to continue to operate until the end of their current licensed lives, if off-site low-level
disposal facilities were not available to NSP-Minnesota.
High-Level Radioactive Waste Disposal — The federal government has the responsibility to dispose of, or permanently store,
domestic spent nuclear fuel and other high-level radioactive wastes. The Nuclear Waste Policy Act requires the DOE to implement a
program for nuclear high level waste management. This includes the siting, licensing, construction and operation of a repository for
domestically produced spent nuclear fuel from civilian nuclear power reactors and other high-level radioactive wastes at a permanent
Federal storage or disposal facility. To date, the DOE has not accepted any of NSP-Minnesota’s spent nuclear fuel. See Item 3 —
Legal Proceedings and Note 15 to the Consolidated Financial Statements for further discussion of this matter.
NSP-Minnesota has on-site storage for spent nuclear fuel at its Monticello and Prairie Island nuclear plants. In 1993, the Prairie Island
plant was licensed by the federal NRC to store up to 48 casks of spent fuel at the plant. In 1994, the Minnesota Legislature adopted a
limit on dry cask storage of 17 casks for the entire state. In 2003, the Minnesota Legislature enacted revised legislation that will allow
NSP-Minnesota to continue to operate the facility and store spent fuel there until its current licenses with the NRC expire in 2013 and
2014. The legislation transfers the primary authority concerning future spent-fuel storage issues from the state Legislature to the
MPUC. It also allows for additional storage without the requirement of an affirmative vote from the state Legislature, if the NRC
extends the licenses of the Prairie Island and Monticello plants and the MPUC grants a certificate of need for such additional storage.
It is estimated that operation through the end of the current license will require 12 additional storage casks to be stored at Prairie
Island, for a total of 29 casks. In October 2006, the MPUC authorized an on-site storage facility and 30 casks at Monticello, which
will allow the plant to operate to 2030. There decision becomes effective June 1, 2007, unless the legislature takes action. As of
Dec. 31, 2006, there were 22 casks loaded and stored at the Prairie Island plant. See Note 15 in the Consolidated Financial Statements
for further discussion of the matter.
PFS — NSP-Minnesota is part of a consortium of private parties working to establish a private facility for interim storage of spent
nuclear fuel. In 1997, PFS filed a license application with the NRC for a temporary storage site for spent nuclear fuel on the Skull
Valley Indian Reservation in Utah. On Feb. 28, 2006, the NRC commissioners issued the license for PFS, ending the 8-year effort to
gain a license for the site. The license is contingent on the condition that PFS must demonstrate that it has adequate funding before
construction may begin. In December 2005, the U.S. Supreme Court denied Utah’s petition for a writ of certiorari to hear an appeal of
a lower court’s ruling on a series of state statutes aimed at blocking the storage and transportation of spent fuel to PFS. Also in
December 2005, NSP-Minnesota indicated that it would hold in abeyance future investments in the construction of PFS as long as
there is apparent and continuing progress in federally sponsored initiatives for storage, reuse, and/or disposal for the nation’s spent
nuclear fuel. In September 2006, the Department of the Interior issued two findings: (1) that it would not grant the leases for rail or
intermodal sites and (2) that it was revoking its previous Conditional Approval of the site lease between PFS and the Skull Valley
Indian tribe even though the conditions had been met. The stated reasons were principally lack of progress at Yucca Mountain and
lack of Bureau of Indian Affairs staff to monitor this activity. Both findings are expected to be appealed.
Prairie Island Steam Generator Replacement — Prairie Island Unit 2 steam generators received required inspections during a
scheduled 2005 outage. Based on current rates of degradation and available repair processes, NSP-Minnesota plans to replace these
steam generators in the 2013 regular refueling outage. Due to the potential shortages in the world markets for materials and shop
capabilities, NSP-Minnesota received Xcel Energy board approval in August 2006 to begin the process for long-lead time materials.
NSP-Minnesota Nuclear Plant Re-licensing — Monticello’s current 40-year license expires in 2010, and Prairie Island’s licenses for
its two units expire in 2013 and 2014. Monticello’s license renewal was approved by the NRC in November 2006, and the MPUC
issued its approval in October 2006 allowing additional spent fuel storage. Minnesota statutes provide that the MPUC decision
becomes effective June 1, 2007, which allows the legislature the opportunity to review the MPUC action if considered appropriate.
Prairie Island has initiated the necessary plant assessments and aging analysis to support submittal of similar applications to the NRC
and the MPUC, currently planned for submittal in early 2008.
Nuclear Plant Power Uprates — At the direction of the MPUC, NSP-Minnesota is pursuing capacity increases of all three units that
will total approximately 250 MW, to be implemented, if approved, between 2009 and 2015. The life extension and a capacity increase
for Prairie Island Unit 2 is contingent on replacement of Unit 2’s original steam generators, currently planned for replacement during
the refueling outage in 2013. Total capital investment for these activities is estimated to be approximately $1 billion between 2006 and
2015. NSP-Minnesota plans to seek approval for an alternative recovery mechanism from customers of its nuclear costs. NSP-