Xcel Energy 2013 Annual Report Download - page 29

11
NSP-Minnesota does not believe that there will be an immediate impact on operations at the Prairie Island or Monticello nuclear
generating plants.
See Notes 13 and 14 to the consolidated financial statements for further discussion regarding nuclear related items.
Nuclear Plant Power Uprates and Life Extension
Prairie Island Independent Spent Fuel Storage Installation (ISFSI) License Renewal — The current license to operate an ISFSI at
Prairie Island was scheduled to expire in October 2013. An application to renew the ISFSI license for an additional 40 years until
2053 was submitted by NSP-Minnesota to the NRC in October 2011. As Prairie Island met the NRC’s criteria for timely renewal by
submitting its ISFSI license renewal application more than two years in advance of the expiration of the ISFSI’s current license, it will
be allowed to continue to operate under the current license until the NRC has rendered a decision on the license renewal application.
In December 2012, the ASLB found that the Prairie Island Indian Community (PIIC) had standing to intervene and admitted three of
the seven contentions put forward by the PIIC. The ASLB will establish a schedule for the hearing which should be completed by
mid-2014.
Monticello Nuclear Uprate Project — NSP-Minnesota has filed with the MPUC two CONs related to changes at its Monticello
nuclear generating plant. The first CON is related to state approval of a 20-year extension of the plant’s operating license, which also
needed approval by the NRC. The second CON is related to the expansion of output capacity at the plant by 71 MW, or 12 percent,
referred to as an EPU. The MPUC approved the first life extension CON for resource planning purposes in 2008. In 2006, the NRC
approved the 20-year extension of Monticello’s operating license through 2030. The MPUC approved the second CON for EPU in
2008, and the NRC approved an EPU license amendment for the plant in December 2013.
NSP-Minnesota prepared for the upgrading and replacement of equipment at the plant to support an extended license period through a
capital program known as LCM. Since the EPU project design also affected equipment needs and modifications at the plant, the LCM
and EPU projects were integrated from an implementation standpoint to leverage project planning and efficiency.
The plant life extension CON dealt mainly with the need for additional on-site storage of spent nuclear fuel, pending resolution of the
longer-term federal issues with permanent fuel storage. The economic modeling for the life extension CON included underlying
assumptions regarding future capital requirements, but the scope of the life extension CON proceeding did not specifically include
discussion or request approval of capital investment for LCM work.
The EPU project CON dealt mainly with a resource planning proposal to expand output capacity at the plant and was planned to occur
with the LCM project. The MPUC approval of the EPU CON authorized the resource need for additional capacity but did not include
approval of a total project cost estimate. However, the modeling assumptions that combined EPU and LCM work were estimated to
be $320 million in NSP-Minnesota’s internal models. Estimated capital expenditures for the EPU portion of the integrated project
were discussed in the EPU CON filing, and at the time such capital expenditures were estimated at approximately $133 million based
on an allocation method.
In July 2013, NSP-Minnesota completed the Monticello 20-year life extension and EPU projects. Final costs for the integrated LCM/
EPU project were approximately $665 million, excluding possible reductions from the results of ongoing vendor negotiations. Of that
total cost amount, NSP-Minnesota estimated that approximately $146 million related to EPU capital work and $519 million related to
LCM capital work. This cost level for the EPU work completed exceeded the CON estimate by approximately 10 percent. NSP-
Minnesota believes that the LCM/EPU costs, while substantially higher than the preliminary estimates assumed at the time of the EPU
CON, were reasonable and prudently incurred to allow for safe and reliable operations of the plant until 2030. NSP-Minnesota asserts
that had it known of the higher costs at any earlier date, it would still have made economic sense to complete the project. NSP-
Minnesota also believes that even at the higher cost level, the total capital investment made to prepare the Monticello plant for another
20 years of operation provides customers with a highly reliable, cost-effective carbon free generation source.
With the approval of the NRC EPU license amendment, the Monticello plant began testing ascension to higher power levels in
December 2013. A second NRC license amendment (Maximum Extended Load Line Limit Analysis Plus, or MELLLA+) is also
needed to proceed to full uprate capacity, for final approval of fuel configuration and utilization under full uprate conditions. NRC
approval of this complementary MELLLA+ fuel license amendment, which includes a plant safety analysis allowing for greater
operational flexibility, is anticipated to be received in the first half of 2014.
The method and timing of rate recovery of the costs associated with the Monticello life extension and EPU construction projects were
included as part of the 2013 electric rate case and 2014 electric rate case filed in November 2013. The project costs will be subject to
a prudence review by the MPUC coincident with the 2014 electric rate case, as discussed below.