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Fuel expense includes the DOE fuel disposal assessments of approximately $5 million in 2014 and $10 million in 2013. There were
no DOE fuel disposal assessments in 2015. In total, NSP-Minnesota paid approximately $452.1 million to the DOE through Dec. 31,
2015.
NSP-Minnesota has its own temporary on-site storage facilities for spent fuel at its Monticello and PI nuclear plants, which consist of
storage pools and dry cask facilities at both sites. The amount of spent fuel storage capacity is determined by the NRC and the
MPUC. The Monticello dry-cask storage facility currently stores 15 of the 30 authorized canisters, and the PI dry-cask storage facility
currently stores 40 of the 64 authorized casks. Other alternatives for spent fuel storage are being investigated until a DOE facility is
available.
Regulatory Plant Decommissioning Recovery — Decommissioning activities related to NSP-Minnesota’s nuclear facilities are
planned to begin at the end of each unit’s operating license and be completed by 2091. NSP-Minnesota’s current operating licenses
allow continued use of its Monticello nuclear plant until 2030 and its PI nuclear plant until 2033 for Unit 1 and 2034 for Unit 2.
Future decommissioning costs of nuclear facilities are estimated through triennial periodic studies that assess the costs and timing of
planned nuclear decommissioning activities for each unit. The MPUC most recently approved NSP-Minnesota’s 2014 nuclear
decommissioning study in October 2015. This cost study quantified decommissioning costs in 2014 dollars and utilized escalation
rates of 4.36 percent per year for plant removal activities, and 3.36 percent for spent fuel management and site restoration activities
over a 60-year decommissioning scenario.
The total obligation for decommissioning is expected to be funded 100 percent by the external decommissioning trust fund when
decommissioning commences. NSP-Minnesota’s most recently approved decommissioning study resulted in an annual funding
requirement of $14 million to be recovered in utility customer rates starting in 2016. This cost study assumes the external
decommissioning fund will earn an after-tax return between 5.23 percent and 6.30 percent. Realized and unrealized gains on fund
investments are deferred as an offset of NSP-Minnesota’s regulatory asset for nuclear decommissioning costs.
As of Dec. 31, 2015, NSP-Minnesota has accumulated $1.7 billion of assets held in external decommissioning trusts. The following
table summarizes the funded status of NSP-Minnesota’s decommissioning obligation based on parameters established in the most
recently approved decommissioning study. Xcel Energy believes future decommissioning costs, if necessary, will continue to be
recovered in customer rates. The amounts presented below were prepared on a regulatory basis, and are not recorded in the financial
statements for the ARO.
Regulatory Basis
(Thousands of Dollars) 2015 2014
Estimated decommissioning cost obligation from most recently approved study (in 2014 and 2011
dollars, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,012,342 $ 2,694,079
Effect of escalating costs (to 2015 and 2014 dollars, respectively, at 4.36/3.36 percent and 3.63/2.63
percent, respectively). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,464 289,907
Estimated decommissioning cost obligation (in current dollars) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,138,806 2,983,986
Effect of escalating costs to payment date (4.36/3.36 percent and 3.63/2.63 percent, respectively) . . . 8,066,688 5,597,302
Estimated future decommissioning costs (undiscounted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,205,494 8,581,288
Effect of discounting obligation (using average risk-free interest rate of 3.01 percent and 2.82
percent for 2015 and 2014, respectively). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,891,392) (5,044,470)
Discounted decommissioning cost obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,314,102 $ 3,536,818
Assets held in external decommissioning trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,724,150 $ 1,703,921
Underfunding of external decommissioning fund compared to the discounted decommissioning
obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,589,952 1,832,897