Cheaper wind, gas energy leads to earlier closing at DAEC nuclear plant

A marker in front of the Duane Arnold Energy Center notes power production started here in...
A marker in front of the Duane Arnold Energy Center notes power production started here in 1974. It will now end in the year 2020.(KCRG)
Published: Jul. 27, 2018 at 3:10 PM CDT
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Iowa’s only nuclear power plant will quit producing electric power and start a shutdown process sometime in late 2020. And that means many of the 540 people who work at the Duane Arnold Energy Center will eventually lose those jobs. But it’s a process that will literally take years.

News of the shutdown date for commercial power production at the DAEC in Palo wasn’t a surprise.

The agreement to sell power from the DAEC to Alliant Energy expired in 2025 and most assumed that’s when the plant would begin the shutdown. DAEC has a license from the Nuclear Regulatory Commission to produce power until 2034 after it was extended in 2014.

But Alliant decided to pay to end the deal earlier because it makes more financial sense for customers.

Justin Foss, an Alliant spokesperson, says the utility will pay $110-million dollars to end a power purchase agreement for electricity from the nuclear power plant five years early.

But paying that money now should save customers a lot more over the coming years.

“Our customers are going to come out ahead on this. We’re getting a lot lower cost fuel from other resources. Right now, in Iowa, wind is king. It’s the lowest cost energy source out there,” Foss said.

Foss estimates ending the deal for power from the nuclear plant in Palo will save customers about $300-million dollars over 20 years. That’s about $40 a year for the average residential customer.

NextEra Energy of Florida owns the plant now after purchasing it from Alliant Energy some years earlier. Peter Robbins, a NextEra spokesperson, says the focus now will turn to taking care of the 540 current employees.

“We’re not doing layoffs today. Nothing this summer or this year. We’ll work with employees to do early retirements or enhanced retirements. We’ll need about 300 people on the site when operations case at the end of 2020,” he said.

Robbins said some workers will get jobs at other NextEra plants, including four nuclear plants, while Alliant Energy may be interested in absorbing some workers.

The DAEC plant should drop to an employment level of about 50 people by the year 2025 with the number staying that way for the indefinite future to care for a retired nuclear plant.

City leaders in Palo called the plant a “good neighbor” for many years and noted that some workers also live in Palo.

One longtime resident, Marty Price, said he didn’t think it was that many and also said the gradual shutdown should help the community cope.

“There’s not that many in town that work out there now, three or four that I know of. So as far as people in town losing their jobs, you’re not going to see a lot,” Price said.

As for the fate of the plant itself, NextEra said some ideas might include a second life in solar energy, solar battery storage or nature gas production. But those decisions are probably years away and will depend on conditions in the power production market.