PALO, Iowa (KCRG-TV9) -- NextEra Energy Resources, LLC through its affiliates (NextEra Energy Resources) and Alliant Energy's Iowa energy company have shortened the term of their power purchase agreement (PPA) for the output from the Duane Arnold Energy Center (DAEC) after an exchange for a buyout.
The agreements by the two companies also include repowered wind PPAs.
"Partially replacing energy from Duane Arnold with NextEra's additional wind investments in Iowa will bring significant economic benefits to our customers," Patricia Kampling, chairman and CEO of Alliant Energy said.
President and CEO of NextEra Energy Resources Armando Pimentel said about 500 workers have helped make the DAEC one of the top-performing nuclear facilities in the U.S. The plant provides about $3 million in property taxes to the local economy and about $85 million in salaries to their employees.
You have our assurance that we will continue to practice our corporate values of doing the right thing by our colleagues and treating them with the respect they have earned and deserve. We are committed to minimizing any impact today's announcement may have on them, their families and the community they call home. Importantly, as we proceed into the next decade, several hundred jobs will remain at the plant for a number of years as a result of what will be a lengthy decommissioning process, along with the creation of new jobs through our continued investment in Iowa," Pimentel said.
Alliant Energy has agreed to pay NextEra Energy Resources $110 million in 2020 to shorten the DAEC PPA by five years.
NextEra Energy Resources say they'll invest a roughly $650 million in existing and renewables by the end of 2020. Of that money, about $250 million is expected to go towards four wind facilities. By opening the wind facilities, an estimated 200 construction jobs will be created during the process.
The powering of the new wind facilities should generate around 340 megawatts of electricity for Alliant Energy customers.
The Central Iowa Power Cooperative, who owns 20 percent of the plant, say they're optimistic about the announcement.
“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.”
Alliant Energy is expected to go to the Iowa Utilities Board on July 27 regarding recovery of the buyout payment.
NextEra Energy Resources says they plan to gradually cut jobs at the DAEC over the next seven years.
Once the plant is closed, Alliant Energy says they expect customers to save about $300 million on a net present value basis before or on January 1, 2021.