CIPCO Guarded About DAEC Nuclear Plant Announcement by NextEra and Alliant Energy
FOR IMMEDIATE RELEASE
DATE: July 27, 2018
Vice President Corporate Communications
CEDAR RAPIDS, Iowa – Leaders at Central Iowa Power Cooperative (CIPCO) expressed guarded optimism about today’s announcement by Florida-based NextEra Energy Resources (NEER) and Alliant Energy that a 2020 closure of the Duane Arnold Energy Center (DAEC) will result in a win for the state of Iowa.
With earlier than anticipated decommissioning costs and the loss of a key source of clean, reliable, and safe energy, leaders at CIPCO are concerned about the near-term, adverse effects to consumer-members for many of Iowa’s electric cooperatives and municipalities. CIPCO is 20 percent owner of the nuclear plant at Palo.
Earlier in the year, NEER announced a likely 2025 end to energy production when Alliant Energy’s power purchase agreement (PPA) with NextEra Energy comes to an end, despite being licensed to operate until 2034.
“CIPCO hopes NextEra Energy and Alliant Energy will work with all parties involved in the ownership and operation of DAEC to achieve a net economic benefit for consumer-members who have funded this emission-free resource since 1974,” said CIPCO’s Executive Vice President and CEO Bill Cherrier. “As a minority owner of the DAEC, we’re concerned how the upfront financial burden associated with closing the plant may impact our members. We’re hoping to work with other owners for a positive outcome.”
Payments on debt used to finance improvements to extend the life of the plant through its operating license and to improve safety and reliability will be paid long after the plant is shuttered.
“In order to accommodate NextEra’s January announcement, our staff and board have worked aggressively on an integrated resource plan. Low-cost natural gas supplies and declining cost of renewables, including wind and solar, have driven efficiencies in wholesale power markets, which poses challenges for nuclear power generators. Replacing one-third of our energy portfolio will not occur overnight,” Cherrier said. “This presents an opportunity to explore additional resources with reliability remaining a long-term priority.”
DAEC currently provides 35 percent of CIPCO’s energy portfolio; coal resources 37 percent; wind, hydro, landfill gas, and solar a combined 27 percent; and other one percent.
“CIPCO embraced the transition to a cleaner energy future ten years ago with the addition of large wind generation and more recently solar,” said Cherrier. “Today, our energy supply stands at more than 60 percent emission-free. Nuclear energy is a key part of our carbon-free resource diversity.”
The plant also provides significant employment and economic value to the Cedar Rapids area and Iowa. With a staff of 500, DAEC provides around $85 million in salaries and around $3 million in property taxes to the local economy.
“DAEC has been a valuable economic engine in this state for over 40 years. We recognize economics are driving NextEra Energy’s decision to prematurely close the plant. The immediate impact on our member electric cooperatives and municipalities as well as the state’s economy remain a top concern for CIPCO,” said Cherrier.
About Central Iowa Power Cooperative
CIPCO is a generation and transmission electric cooperative built by member cooperatives and the communities they serve. With a balanced, 24/7 energy portfolio, CIPCO is committed to providing cost-effective, clean, safe, and reliable energy. CIPCO and its 13 members serve over 300,000 Iowans in 58 Iowa counties. CIPCO’s principal place of business is Des Moines, Iowa, with locations in Cedar Rapids, Creston, and Wilton.