Electricity generator NextEra Energy Resources, a subsidiary of NextEra Energy Inc., said Friday that it had agreed to a buyout plan with Iowa-based buyer Alliant Energy that would shorten the operating lifespan of the Duane Arnold Energy Center by five years.
Closing the 615 MW nuclear plant in Palo, Iowa, would save Iowa customers nearly $300 million “in energy costs, on a net present value basis, over 21 years,” the Juno Beach, Florida-based NextEra Energy said.
The Duane Arnold nuclear reactor went operational in 1974, but was granted a 20-year license extension in December 2010. That would have allowed the plant to operate through February 2034, but it was already known that the plant would have closed, prior to Friday's announcement, in 2025, when an agreement with Alliant Energy was completed. Friday's agreement shortens that operating lifespan by five additional years.
NextEra said it planted to invest “approximately $650 million” in established and new generation prior to 2020, with all of that money dedicated to renewable power options.
The buyout plan requires endorsement from the Iowa Utilities Board. The agreement calls for payment of $110 million in exchange for electricity supplied by wind power facilities amounting to an aggregte of 340 MW of capacity. The payment would be made in September 2020.
“Partially replacing energy from Duane Arnold with NextEra's additional wind investments in Iowa will bring significant economic benefits to our customers,” said Patricia Kampling, chairman and chief executive officer of Alliant Energy.
About $250 million of NextEra's investment is expected to repower the four wind facilities, which is expected to create 200 new construction jobs, “as well as extend payments to landowners and tax revenues for local communities for decades,” the companies said.
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The economic development from those wind facilities will amount to peanuts compared to what is lost from the Duane Arnold closure. Wind farms have only a handful of people who are employed to operate them.
Nothing like NEE getting all the wind and solar contracts in that area and cutting the throats of the nuclear division