July 5, 2005: Nuclear Plant Sale Will Not Result In Customer Benefits
For Immediate Release: July 05, 2005
CUB: Kewaunee Nuclear Plant Sale Will Not
Result In Promised Customer Benefits
MADISON – The Citizens Utility Board (CUB) countered the claims today of Wisconsin Public Service (WPS) and Wisconsin Power and Light (WP&L) that the sale of the Kewaunee nuclear power plant would result in customer benefits.
“Every promise that WPS and WP&L made regarding the benefit to customers from the sale of Kewaunee has been broken. WPS and WP&L promised that the sale of the plant would result in a profit that would be shared with customers. Instead, the sale has resulted in a loss of at least $28 million. WPS and WP&L promised to return $193 million of decommissioning funds to ratepayers but now want to use this customer money to pay off utility debt, including the loss on the sale of Kewaunee and other nuclear costs,” said Charlie Higley, CUB executive director.
WPS and WP&L formally transferred ownership today of the Kewaunee nuclear power plant to Dominion Energy Kewaunee, a subsidiary of Dominion Resources (Dominion). When WPS and WP&L announced the sale of Kewaunee in November, 2003, they reported that a definitive agreement had been signed to sell the jointly owned 545 megawatt Kewaunee nuclear plant to Dominion for approximately $220 million. Today’s announcement that the sale closed at $191.5 million represents a loss in the originally stated value of the sale of at least $28 million.
WPS and WP&L also claimed in November, 2003 that the non-qualified decommissioning fund collected from ratepayers to dismantle the nuclear plant would be returned to customers. The $193 million in decommissioning funds were collected from customers for the specific purpose of decommissioning the Kewaunee plant. Since Kewaunee will now be decommissioned by Dominion, these funds were to be returned to customers. WPS now proposes to use the monies it collected from ratepayers to decommission Kewaunee to pay for any loss that it experiences from the sale of the plant to Dominion, and well as upwards of $35 to $45 million in replacement power costs associated with the more than four month outage this spring of Kewaunee.
“WPS and WP&L are shedding the risk of nuclear power away from their shareholders by proposing to put all the Kewaunee costs on the backs of customers,” continued Higley.
Dominion, a large, diversified energy company based in Virginia, will operate the Kewaunee power plant as an ‘exempt wholesale generator’ which means that the price of power from the plant will not be regulated by the Wisconsin Public Service Commission. The plant will be operated to generate profits for Dominion, whereas when it was owned by WPS and WP&L it was operated to insure that Wisconsin?s energy system remained reliable, and that the costs charged to customers for power from the plant were not excessive.
“If this sale isn’t overthrown by the courts, WPS and WP&L will have signed over Wisconsin’s nuclear future to an out-of-state corporation that will run Kewaunee for profit, rather than to preserve the reliability of Wisconsin’s electric system or to provide power at state regulated rates,” stated Higley.