Xcel Energy 2015 Annual Report Download - page 28
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Annual Automatic Adjustment (AAA) of Charges — In June 2013, the DOC proposed that the MPUC adopt a fuel clause incentive
that would normalize FCA recovery using monthly patterns derived from averages of the prior three-year period, setting and fixing
this level during a rate case with no adjustment between rate cases. NSP-Minnesota and other utilities opposed this proposal. The
DOC proposal is pending MPUC action.
Additionally, the DOC has indicated it will review prudence of replacement power costs associated with the Sherco Unit 3 outage
event within the 2013 AAA docket. The 2013 and 2012 AAA dockets remain pending.
In September 2015, the 2014 AAA was filed with the MPUC and also remains pending.
Nuclear Power Operations and Waste Disposal
NSP-Minnesota owns two nuclear generating plants: the Monticello plant and the PI plant. Nuclear power plant operations produce
gaseous, liquid and solid radioactive wastes which are controlled by federal regulation. High-level radioactive wastes primarily
include used nuclear fuel. LLW consists primarily of demineralizer resins, paper, protective clothing, rags, tools and equipment that
have become contaminated through use in a plant.
NRC Regulation — The NRC regulates the nuclear operations of NSP-Minnesota. Decisions by the NRC can significantly impact the
operations of the nuclear generating plants.
The NRC imposed new requirements after events at the nuclear generating plant in Fukushima, Japan in 2011. In 2012, the NRC
issued orders which included requirements for mitigation strategies for beyond-design-basis external events, requirements with regard
to reliable spent fuel instrumentation and requirements with regard to reliable hardened containment vents, which are applicable to
boiling water reactor containments at the Monticello plant. The NRC also requested additional information including requirements to
perform walkdowns of seismic and flood protection, to evaluate seismic and flood hazards and to assess the emergency preparedness
staffing and communications capabilities at each plant. Except with respect to the revised order described below, all units are on track
to meet the required compliance dates and be fully compliant by December 2016.
In 2013, the NRC issued a revised order with regard to reliable hardened containment vents. Compliance with the revised order will
be completed during refueling outages in 2017-2019.
NSP-Minnesota expects that complying with these external event requirements will cost approximately $90 to $100 million at the
Monticello and PI plants over the period 2012 through 2018. The majority of these costs have been and are expected to be capital in
nature. The costs associated with compliance have been and are expected to continue to be recoverable from customers through
regulatory mechanisms and consequently NSP-Minnesota does not expect a material impact on its results of operations, financial
position, or cash flows.
The NRC continues to review its requirements for mitigating the risks of external events on nuclear plants. NSP-Minnesota expects
the costs associated with compliance will be recoverable from customers.
Nuclear Regulatory Performance — The NRC has a Reactor Oversight Process that classifies U.S. nuclear reactors into various
categories (referred to as Columns, from 1 to 5). Issues are evaluated as either green, white, yellow, or red based on their safety
significance, with green representing the least safety concern and red representing the most concern.
At Dec. 31, 2015, Monticello and PI Unit 1 were in Column 1 (licensee response) with all green performance indicators and no greater
than green findings or violations. Plants in Column 1 are subject to only a pre-defined set of basic NRC inspections.
Based on a December 2015 shutdown, PI Unit 2 will be moved from Column 1 to Column 2 (regulatory response) due to an
anticipated white performance indicator related to the level of unplanned rapid shutdowns of the nuclear reactor, of which only a
certain level is allowed per year to remain at the green performance level. Plants in Column 2 are subject to special NRC inspections
to review and validate that performance issues or inspection findings have been properly addressed. PI Unit 2 returned to service in
late February 2016 after addressing the issues leading to shutdown and will be eligible to return to Column 1 once the performance
indicator returns to green, subject to an NRC inspection to close the issue. Depending on the unit’s operation in 2016, PI Unit 2 could
return to green performance and Column 1 later in 2016.