Xcel Energy 2009 Annual Report Download - page 155

Other Contingencies
See Note 16 to the consolidated financial statements.
18. Nuclear Obligations
Fuel Disposal — NSP-Minnesota is responsible for temporarily storing used or spent nuclear fuel from its nuclear
plants. The DOE is responsible for permanently storing spent fuel from NSP-Minnesota’s nuclear plants as well as from
other U. S. nuclear plants. NSP-Minnesota has funded its portion of the DOE’s permanent disposal program since
1981. The fuel disposal fees are based on a charge of 0.1 cent per Kwh sold to customers from nuclear generation. Fuel
expense includes the DOE fuel disposal assessments of approximately $12 million in 2009, $13 million in 2008 and
$13 million 2007, respectively. In total, NSP-Minnesota had paid approximately $398 million to the DOE through
Dec. 31, 2009. The Nuclear Waste Policy Act of 1982 required the DOE to begin accepting spent nuclear fuel no later
than Jan. 31, 1998. NSP-Minnesota and other utilities have commenced lawsuits against the DOE to recover damages
caused by the DOE’s failure to meet its statutory and contractual obligations.
NSP-Minnesota has its own temporary on-site storage facilities for spent fuel at its Monticello and Prairie Island nuclear
plants, which consist of storage pools and dry cask facilities at both sites. The amount of spent fuel storage capacity
currently authorized by the NRC and the MPUC will allow NSP-Minnesota to continue operation of its Prairie Island
nuclear plant until the end of its current license terms in 2013 and 2014 and its Monticello nuclear plant until the end
of its renewed operating license in 2030. Other alternatives for spent fuel storage are being investigated until a DOE
facility is available, including pursuing the establishment of a private facility for interim storage of spent nuclear fuel as
part of a consortium of electric utilities.
Regulatory Plant Decommissioning Recovery — Decommissioning of NSP-Minnesota’s nuclear facilities is planned for
the period from cessation of operations through 2067, assuming the prompt dismantlement method. NSP-Minnesota is
currently recording the regulatory costs for decommissioning over the MPUC-approved cost-recovery period and
including the accruals in a regulatory liability account. The total decommissioning cost obligation is recorded as an
ARO in accordance with ASC 410 Asset Retirement and Environmental Obligations.
Monticello began operation in 1971 and with its renewed operating license and CON for spent fuel capacity to support
20 years of extended operation can operate until 2030. The Monticello 20-year depreciation life extension until
September 2030 was granted by the MPUC in 2007. Construction of the Monticello dry-cask storage facility is
complete and 10 of the 30 canisters authorized have been filled and placed in the facility.
Prairie Island units 1 and 2 began operation in 1973 and 1974, respectively, and are currently licensed to operate until
2013 and 2014, respectively. 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
PIIC filed contentions in the NRC’s license renewal proceeding in August 2008. The PIIC request was referred to an
ASLB for review. The ASLB has granted the PIIC hearing request and has admitted seven of the 11 contentions filed.
To date, all seven admitted contentions have been resolved and removed from the ASLB docket. Subsequent to the
NRC issuance of the final Safety Evaluation Report and the draft supplemental environmental impact statement, the
PIIC filed four additional contentions. The ASLB has admitted one of the contentions and has not issued a decision on
the other three. NSP-Minnesota is challenging the admitted contention, and a decision on whether the other
contentions will be accepted will be made in early 2010. If the contentions are not resolved, the resulting adjudicatory
process is expected to add approximately eight months onto the NRC’s standard 22 month review schedule, resulting in
a decision on the Prairie Island license renewal in late 2010.
The total obligation for decommissioning currently is expected to be funded 100 percent by external funds, as approved
by the MPUC, when decommissioning commences. The MPUC last approved NSP-Minnesota’s nuclear
decommissioning study request in October 2009, using 2008 cost data. The next study update will be submitted in
October 2011 for the 2012 accrual. The MPUC approval, eliminated 2009 decommissioning funding for Minnesota
retail customers, due to a full extension of the accrual period for the Monticello unit from 2020 to 2030, along with
an extension of the accrual period for Prairie Island (from 2013 for Unit 1 and 2014 for Unit 2 to 2023 and 2024
respectively). Further, in November 2009, the MPUC also approved a proposal to refund the Minnesota portion of the
Monticello escrow fund in a supplemental filing.
The assets held in trusts, primarily consist of investments in fixed income securities, such as tax-exempt municipal
bonds and U. S. government securities that mature in one to 20 years and common stock of public companies.
NSP-Minnesota plans to reinvest matured securities until decommissioning begins.
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