Xcel Energy 2008 Annual Report Download - page 24

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. In February 2006, the NRC commissioners issued
the license for PFS. 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. 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.
Nuclear Plant Power Uprates and Life Extension — NSP-Minnesota is pursuing life extensions and capacity increases of
all three of its nuclear units that will total approximately 230 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 the replacement of the
original steam generators, currently planned for replacement during the refueling outage in 2013. Capital investments
for life cycle management and power uprate activities through 2008 have totaled over approximately $125 million. For
the years 2009 through 2015, spending is estimated at over $1.0 billion. See additional discussion in Capital
Requirements in Item 7A — Management’s Discussion and Analysis.
NSP-Minnesota has filed two applications for certificates of need related to its nuclear generating facilities to obtain
approval for these projects. The first addresses approximately 71 MW of power uprates at the Monticello plant. The
MPUC approved the Monticello power uprate certificate of need in December 2008. NSP-Minnesota re-submitted its
NRC application for the Monticello plant extended power uprate in November 2008, and the NRC’s Sufficiency review
of the license amendment re-submittal was completed in December 2008. Although this delays the extended power
uprate process slightly, NSP-Minnesota does not anticipate a substantial delay in the project at this time. The operating
life of the Monticello nuclear plant has already been extended through 2030.
The second application addresses both life extension and approximately 160 MW in power uprates at Prairie Island
Units 1 and 2. In July 2008, the MPUC determined that the application was complete and referred it to an ALJ for
contested case hearing. The Prairie Island Community has indicated its interest in the power uprate portion of the case
and has expressed interest in revisiting its 2003 settlement with NSP-Minnesota, in which it agreed that certain
concerns it may have regarding Prairie Island life extension would be addressed in the federal relicensing process.
In April 2008, NSP-Minnesota filed an application with the NRC to renew the operating license of its two nuclear
reactors at Prairie Island for an additional 20 years, until 2033 and 2034, respectively. The Prairie Island Indian
Community (PIIC) filed contentions in the NRC’s license renewal proceeding in August 2008. The PIIC request was
referred to an Atomic Safety and Licensing Board (ASLB) for review. The ASLB has granted the PIIC hearing request
and has admitted 7 of the 11 contentions filed. The resulting adjudicatory process and hearings are expected to add
approximately 8 months onto the NRC’s standard 22 month review schedule. Therefore the NRC is not expected to
make a decision until late 2010. An application for a Certificate of Need to expand the spent fuel storage capacity at
Prairie Island to support 20 additional years of operation was filed with the MPUC in May 2008. It is expected that
the MPUC will act in late 2009, which would result in the MPUC decision being stayed during the 2010 session of
the Minnesota legislature before going into effect.
NMC — On Sept. 28, 2007, NSP-Minnesota obtained 100 percent ownership in NMC. Accordingly, the results of
operations of NMC and the estimated fair value of assets and liabilities were included in NSP-Minnesota’s consolidated
financial statements from the Sept. 28, 2007 transaction date. NSP-Minnesota has reintegrated its nuclear operations
into its generation operations. The application to the NRC to transfer the nuclear operating licenses from NMC to
NSP-Minnesota was completed on Sept. 22, 2008.
For further discussion of nuclear obligations, see Note 18 to the consolidated financial statements.
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