Platts - Wednesday, July 06, 2005 http://www.platts.com ------------ FPL Energy plans to purchase 70% of Duane Arnold Washington (Platts)--5Jul2005 FPL Energy plans to pay about $387-million for 70% of Duane Arnold. The company announced today that it would buy the share of Alliant Energy subsidiary Interstate Power & Light (IP&L). FPL Energy, a subsidiary of FPL Group, also said it would seek a 20-year license extension to Duane Arnold's operating license, which expires in 2014. FPL Energy will take over management and operation of the 614-MW BWR from Nuclear Management Co. All of the power from FPL Energy's share of Duane Arnold will be sold to IP&L under a power purchase agreement that runs until early 2014. FPL Energy expects to close on the deal late in fourth quarter 2005 or early in first quarter 2006. FPL Group has five PWRs: St. Lucie-1 and -2 and Turkey Point-3 and -4 in Florida, and Seabrook in New Hampshire ------------ Dominion closes Wisconsin nuclear plant purchase for $191.5-mil Portland, Maine (Platts)--5Jul2005 Alliant Energy and WPS Resources units closed Tuesday on the $191.5-mil sale of the 574-MW Kewaunee nuclear power plant in Carlton, Wisconsin to a Dominion Resources subsidiary. When the sale was proposed in 2003, Wisconsin Power and Light, an Alliant subsidiary, and Wisconsin Public Service Co, a WPS Resources unit, expected to sell the plant for about $220-mil. Kewaunee was shuttered Feb 20 to July 2 due to the discovery of a possible design weakness in its auxiliary feed-water system, a backup cooling system. The sale price was cut mainly to reflect costs related to the repairs, an Alliant spokeswoman said. Green Bay, Wisconsin-based WPS plans to use its $113-mil share of the sale proceeds to fund its construction program, it said. WPS and WP&L have entered into a long-term power purchase agreement with Dominion to buy Kewaunee output through 2013 virtually equivalent to the amounts expected to be received had their ownership continued. The utilities and Dominion also agreed to a "exclusivity" period that runs until Dec 21, 2011, for PPA renewal talks. For more information about nuclear power plants, take a trial to Platts Nucleonics Week at http://nucweek.platts.com. ------------ Energy Northwest's Columbia plant up to full power, US NRC says Washington (Platts)--5Jul2005 Energy Northwest's Columbia Generating Station nuclear plant is operating at 100% capacity after exiting an outage, the US Nuclear Regulatory Commission said Tuesday in its reactor status report. The 1,157-MW unit was at 2% capacity on Friday after being shut down in late June because of a loss of feedwater flow, according to an event report filed with the NRC. The plant, which exited a refueling outage in June, is in Richland, Washington. Energy Northwest is a joint agency made up of 16 public utility districts and three municipal utilities in Washington state. This story was originally published in Platts Natural Gas Alert http://naturalgasalert.platts.com ------------ European nuclear producers 'discreetly' boost capacity: analysts London (Platts)--4Jul2005 Many European nuclear generators are discreetly boosting their capacity, which is technically easy and lucrative at current power prices, UBS Utilities said in a morning note Monday. "Our analysis suggests that Sweden, Belgium and Spain have already boosted their capacity, thereby limiting the potential remaining upside. Yet as German utilities were expecting to be forced to close their plants early, they have not maximised their output," the analysts said, adding that capacity boosts go a long way to adding nuclear capacity at limited political risk, unlike building a new plant. UBS Utilities' proprietary model shows that the value of this is close to EUR500/kWe based on the Net Present Value of the cash flows over 20 years assuming a realised price of EUR40/MWh. But an additional (and similar) value comes from the 'saved' capex. As long as wholesale power prices remain above EUR31/MWh for a period of time, nuclear generators should benefit from boosting their existing nuclear assets. It estimates the extra value could be a minimum of EUR0.98ps for Eon and EUR0.90ps for RWE, all else being equal. More stories are available in Nucleonics Week. Request a free trial at http://www.platts.com/Nuclear/Newsletters%20&%20Reports/Nucleonics%20Week/ ------------ BNFL begins Westinghouse sale process Washington (Platts)--1Jul2005 British Nuclear Fuels plc (BNFL) kicked off the process for a potential sale of Westinghouse. BNFL's board of directors approved the sale process during its meeting today. A Westinghouse spokesman said a buyer could be identified by early 2006 and the sale consummated by the end of that year. BNFL expects to first seek out companies that earlier showed interest in buying Westinghouse, and invite them to submit estimates of what they would pay for the company. BNFL could take up to six months to decide if any offer is enough. BNFL CEO Mike Parker told Platts that the company has received about 15 "serious offers" from the global marketplace about potentially acquiring Westinghouse. ------------ US Senate passes fiscal year 2006 Energy Dept budget of $25-bil Washington (Platts)--1Jul2005 The US Senate passed a spending bill Friday giving the Energy Dept a little more than $25-bil in fiscal year 2006, a $778-mil boost over DOE's current funding level and $1.2-bil more than the Bush administration requested in the pared-down budget it unveiled in February. The bill, which passed 92-3, must now be reconciled in conference with a House of Representatives measure that gives DOE about $425-mil less funding. The House and Senate bills also differ on some key policy matters, such as developing "interim" storage sites for spent nuclear fuel stacking up at power plants because of delays in DOE's repository project in Nevada. Both Senate and House provided $577-mil for the repository, on a par with current funding level. But the Senate bill says nothing about developing interim storage, while the House measure earmarks $20-mil for it. That could be a contentious point between Rep David Hobson (Republican-Ohio) who authored the interim storage provision, and Sen Pete Domenici (Republican-New Mexico) who fought to keep it out of the Senate bill. The Senate bill also provides $368-mil for construction of a mixed-oxide plant, which Domenici says would reduce nuclear proliferation threats and solve some of DOE's environmental management problems. The House bill, though, provides no funding for this program. The Senate bill provides slightly less than the House measure for cleaning up now-defunct nuclear weapons sites, but both bills offer more than the administration's budget request. For more information about the energy bill, take a trial to Platts Electric Power Daily http://electricpowerdaily.platts.com. ------------ Russia suspends power imports from Ukraine following tariff hike Moscow (Platts)--1Jul2005 Russia suspended power imports from Ukraine's nuclear power generation company Energoatom from Friday onwards following Ukraine's decision to almost double power tariffs, Russia's power monopoly UES said in a statement. Ukraine's national power sector regulator increased tariffs for power purchases from its domestic market to $0.024/kWh from about 0.0134/kWh from Jul 1 onwards, levels Russia's UES saw as simply too high to honor its agreements with Energoatom. "UES is confident that the situation will not affect Russian consumers, because Ukrainian power supplies will be offset by an increase in output by Russia's nuclear power plants," UES said. "Meanwhile, for Ukraine it will mean almost a complete stoppage of a power unit at one of their nuclear power plants and corresponding losses." Ukraine started power exports to Russia December 2004, supplying 500-mil kWh per month. In July, supplies had been scheduled to increase to 800-mil kWh. For more information about nuclear power take a trial to Platts Nuclear Fuel at http://nuclearfuel.platts.com ------------ Russia suspends power imports from Ukraine following tariff hike Moscow (Platts)--1Jul2005 Russia suspended power imports from Ukraine's nuclear power generation company Energoatom from Friday onwards following Ukraine's decision to almost double power tariffs, Russia's power monopoly UES said in a statement. Ukraine's national power sector regulator increased tariffs for power purchases from its domestic market to $0.024/kWh from about 0.0134/kWh from Jul 1 onwards, levels Russia's UES saw as simply too high to honor its agreements with Energoatom. "UES is confident that the situation will not affect Russian consumers, because Ukrainian power supplies will be offset by an increase in output by Russia's nuclear power plants," UES said. "Meanwhile, for Ukraine it will mean almost a complete stoppage of a power unit at one of their nuclear power plants and corresponding losses." Ukraine started power exports to Russia December 2004, supplying 500-mil kWh per month. In July, supplies had been scheduled to increase to 800-mil kWh. For more information about nuclear power take a trial to Platts Nuclear Fuel at http://nuclearfuel.platts.com ------------ FERC approves Exelon-PSEG merger Washington (Platts)--30Jun2005 The Federal Energy Regulatory Commission (FERC) today approved the merger of Exelon and Public Service Enterprise Group Inc. (PSEG), marking a key step in the deal, which would create the largest utility in the U.S. To address FERC's concerns about excessive concentration of market power, Exelon Corp. and PSEG committed to the "virtual divestiture" of 2,600 megawatts of nuclear capacity. Under that approach, the merged company would continue to own that nuclear capacity. However, FERC said the plan "effectively transfers control" of the 2,600 MW "from the merged firm to the purchasers." The new company, Exelon Electric & Gas Corp., will have 20 nuclear units, with a total nuclear generating capacity of 21,711 MW (gross). Among the other conditions for FERC approval is that the merged company sell 4,000 MW of non-nuclear generation facilities. The merger must still be approved by state regulators in Connecticut, New Jersey, New York and Pennsylvania, and by NRC, the Securities & Exchange Commission, and the Department of Justice, the companies said in a joint statement. ------------ Europe's utilities plan new nuclear projects New York (Platts)--30Jun2005 Electrabel and Franco-Belgian parent Suez are making real inroads into "Fortress EDF," otherwise known as the French power market. The group has captured 8.5% of the eligible market, equivalent to 25TWh, Suez said on June 14. The short-term objective is to get 10% of the market. Meanwhile Suez is in negotiations with EDF concerning a share in the EPR nuclear project (a 1.6GW nuclear station to be sited at Flamanville), but it says it also plans to build its own nuclear power plants from 2015. Italy's Enel has already taken a stake in the EPR and German utilities are in talks with EDF on the same subject. Industry may be moving faster than governments on nuclear, but Germany's Social Democrat chancellor Gerhard Schroeder's surprise plan to bring forward federal elections by around 12 months to September this year has triggered fevered speculation over the future of the country's nuclear phase-out law, domestic coal aid and renewable energy support. The announcement of new elections triggered a share price rise at energy giants RWE and Eon, both nuclear operators, but saw solar company share prices fall sharply. The opposition CDU party is in the ascendancy, and if it gains power it intends to lift restrictions on the lifetime of existing reactors. Further, domestic coal subsidies face another squeeze if a new conservative government takes the helm, although the effect will not be felt until toward the end of the decade. Meanwhile, in Sweden nuclear operators are pressing ahead with plans to uprate reactors, despite the official government line that nuclear will be phased-out. Has a perceived 'disconnect' between Europe's politicians and its citizens spread beyond the CAP/EU Constitution/etc to nuclear? Swedish polls show Swedes now think nuclear has a renewed importance in a carbonconstrained Europe. For more information about Europe's nuclear projects, take a trial to Platts Energy Economist at http://energyeconomist.platts.com ------------ House may address nuclear waste funding in the fall: Official Washington (Platts)--30Jun2005 A move to give the US Dept of Energy nuclear waste program greater access to the more than $700-mil collected each year from nuclear utility customers is expected to get under way in the House after Congress completes work on the broad energy bill, a program supporter said Thursday. Charles Pray, co-chairman of the Yucca Mountain Task Force, said the House Energy and Commerce Committee may begin work on so-called funding reform legislation sometime after September. Pray made his comments after he and other supporters of DOE's efforts to develop a repository at Yucca Mountain, Nevada, met with committee Chairman Joe Barton (Republican-Texas) on Wednesday. Task force members plan to take the issue up with senators in July, Pray added. Nuclear utility customers pay one-tenth of a cent into the Nuclear Waste Fund for every kilowatt-hour of nuclear-generated sold. The waste fund was set up in 1983 to bankroll the DOE repository project. Congress, however, has only made a fraction of the money available to the agency, creating budget shortfalls that the task force and other supporters of the DOE program claim have slowed work on the repository project. Customer contributions, plus interest, paid into the fund to date totals more than $24-billion. DOE, which was to have begun accepting utility spent fuel at a federal site in January 1998, is unlikely to have a repository ready until sometime after 2012. The department could be six to eight weeks away from having a new repository schedule, according to Pray, who also met with DOE waste program officials yesterday. For more information about nuclear waste, take a trial to Energy Trader at http://energytrader.platts.com ------------ License renewed for Pickering Ontario (Platts)--29Jun2005 The Canadian Nuclear Safety Commission yesterday renewed the operating license for Ontario Power Generation?s Pickering A station until June 30, 2010. All four Pickering A units were shut down in 1997 during a corporate restructuring. Pickering-4 was returned in September 2003, but has been shut since April because of concerns with feeder pipe thinning. Unit 1 is nearing the end of a refurbishment process and is expected to return to the grid between September and October. The restoration of units 2 and 3 will depend on an overall analysis of the costs of restoring units 1 and 4. ------------ Switzerland receives request from US for Adamov's extradition Zurich (Platts)--29Jun2005 The Swiss federal justice office has confirmed receipt of a formal request June 17 from US authorities for the extradition of Yevgeny Adamov, former Russian atomic energy minister. The US has indicted Adamov on charges of fraud and embezzlement of more than $9-mil in government money earmarked for safety upgrades at nuclear power plants in Russia and eastern Europe. Russia also has asked Switzerland to extradite Adamov on grounds of possible misuse of government funds. Moscow contends extradition to a third state (the US) could be dangerous to Russian security interest because of Adamov's former position and knowledge of nuclear activities. On June 9, Adamov won a first court battle in Switzerland when the federal penal tribunal in Bellinzona ruled against his detention in the country. This was on legal grounds he was visiting his daughter, a resident and citizen of Switzerland, and had given testimony voluntarily in proceedings involving her bank accounts in Bern. Adamov's lawyers argued that this put him under "safe conduct" within Switzerland. Swiss justice officials have appealed the decision to the highest Swiss court in Lausanne and are seeking an immediate provision upholding Adamov's detention. Swiss justice office spokesman Falco Galli told Nucleonics Week this week that the extradition proceedings were in progress. Adamov has indicated to authorities that he does not want to be extradited to either Russia or the US. He was arrested May 2 at the request of the US Department of Justice. Under Swiss law, he can fight extradition all the way up to the highest federal court. This story was originally published in Platts Nucleonics Week http://nucweek.platts.com