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Xcel customers to see refund in nuclear waste storage settlement

BISMARCK – The federal government’s failure to secure a storage site for spent nuclear fuel will mean a refund for residential customers of Xcel Energy in North Dakota as part of an ongoing settlement.

The state Public Service Commission on Wednesday approved Xcel’s request to refund $702,656 awarded through a settlement with the U.S. Department of Energy.

Settlement payments for damages to North Dakota customers since 1998 have totaled $11.1 million, resulting in about a $47 return to the average residential customer through refunds or rate cases, Commissioner Brian Kalk said.

The refund approved Wednesday, which will be paid within 90 days as a one-time $3 credit, is for damages in 2014. Similar credits are expected for 2015 and 2016 over the next two years.

Under the Nuclear Waste Policy Act of 1982, utilities were required to sign contracts with the Department of Energy for the disposal of spent nuclear fuel – in Xcel’s case, from its Monticello and Prairie Island nuclear power plants in Minnesota.

To cover the anticipated cost, ratepayers were charged a fee of 1 mill per kilowatt-hour, which Xcel stopped charging in 2014.

The DOE had vowed to start taking nuclear fuel by January 1998 but couldn’t secure a site and was sued by Minneapolis-based Xcel and other utilities for breach of contract.

Under a settlement reached in 2011, Xcel received $100 million for damages incurred through 2008. The agreement also allowed Xcel to recover future damages through 2013 without going to court.

The latest settlement is for the three-year period ending in 2016, bringing the total awarded to Xcel to $228 million, said David Sederquist, senior regulatory consultant for the company.

Julie Fedorchak, who chairs the three-member PSC, said that the settlement is good for ratepayers but it doesn’t solve the problem of finding safe storage for spent nuclear fuel.

Fedorchak said the fact that North Dakota has no nuclear power plants was one argument used to oppose a now-scuttled DOE drilling project near Rugby that would have tested the suitability of crystalline rock for storing canisters of spent nuclear fuel deep underground.

But she noted 30 percent of the electricity used by Xcel’s roughly 90,000 customers in North Dakota comes from nuclear sources.

“We are contributing to the generation of this waste, so it isn’t accurate to say we don’t have anything at stake. We do,” she said, adding the state has a role in figuring out a solution and she wishes the federal government would also fulfill its responsibility.

Mike Nowatzki

Mike Nowatzki reports for Forum News Service. He can be reached at (701) 255-5607.