It has been reported that NextEra Energy Resources is actively pursuing recommissioning the Duane Arnold Energy Center (DAEC) in Palo through a filing with the Nuclear Regulatory Commission.
Should it happen, the restarting of the DAEC, which some suggest could happen by 2028, would be the biggest economic development win in the region — maybe the state — in a generation, and will correct a massive economic blunder that should never have happened.
As we have written many times, the decommissioning of Iowa’s only nuclear power plant will go down as one of the most short-sighted and ill-advised energy decisions in the history of the state of Iowa.
Nuclear power is back in fashion, especially with the emergence of power-hungry data centers being built around the country. The trend of recommissioning shuttered nuclear power plants is hot, and that’s part of the reason the DAEC may be coming back.
But it didn’t have to be this way.
Being the CEO of a publicly traded utility company is challenging because you are trying to make long-term capital energy decisions while facing short-term financial expectations. Those two don’t always align.
As a result of this misalignment, Alliant Energy paid NextEra $110 million in 2018 to get out of a power purchase agreement. It made perfect financial sense for both companies at the time, because nuclear power was expensive compared to other forms of electricity, especially highly subsidized wind and solar energy.
It was decided that the DAEC would be shut down in October of 2020, but the August 2020 derecho moved up the closure by several months due to damage to the plant’s cooling towers.
But that short-term financial decision was woefully short-sighted.
The state of Iowa should have stepped up to prevent the shutdown of the DAEC by providing financial incentives to NextEra like Illinois did in 2021, with more than $700 million in incentives to save two of its nuclear power plants.
More than 500 high-paying jobs, 615 megawatts of clean, baseload energy and an annual economic impact of hundreds of millions of dollars were lost when the DAEC shut down.
So instead assisting the DAEC with financial incentives of a couple hundred million dollars to sustain operations, the cost to recommission the facility will undoubtedly surpass $1 billion.
Consider the restarting of the 800 mega-watt Palisades Nuclear Plant in Michigan, which was shut down in 2022 and is expected to cost nearly $3 billion in federal and state financial assistance with a $1.52 billion loan from the Department of Energy.
Bringing Palisades back into operation is expected to create or retain up to 600 permanent jobs at the Michigan plant, according to NuclearNewswire. An additional 1,000 workers would also be needed every 18 months to facilitate regularly scheduled refueling and maintenance periods.
The shutting down and restarting of the DAEC should be a cautionary example to utility executives and state officials on myopic energy decisions.
