Alliant Energy plans auction to sell Iowa nuclear plant

Interstate Power & Light President Tom Aller said recently that Alliant hopes to begin the closed-bid process soon and complete it within a year. The decision to auction Iowa's only nuclear plant rather than negotiating with potential buyers was based on a desire to keep the process open and the public informed, he said.

Alliant has asked the state's Office of Consumer Advocate and the Iowa Utility Board to assign members to the Alliant team overseeing the sale, Aller said.

Iowa law does not require the utilities board to approve such a sale, but does allow it to object, he said.

Alliant announced two weeks ago that it had decided not to seek renewal of the nuclear plant's license, which expires in 2014, and will instead seek a buyer interested in pursuing license renewal.

Considerations include underfunding of a trust to pay for decommissioning of the plant. The fund had a balance of $147.9 million at the end of last year, but would need $440 million by 2014.

Closing the gap would likely require an increase in electric charges, or the Nuclear Regulatory Commission could order Alliant to keep running the plant until the trust is fully funded. The latter is a risk Alliant is unwilling to take.

Regulatory uncertainty is another concern. Alliant does not know how much of a return on investment it would be allowed for license renewal studies, and for any required repairs or upgrades. The required relicensing study would cost $17 million alone, Alliant Chief Financial Officer Eliot Protsch said.

At least five companies have been buying nuclear plants in the United States, and some of them likely will bid for Duane Arnold, Protsch said. The five are Exelon Corp., Dominion, FPL Group, Constellation Energy and Entergy Corp.

Aller said Alliant wants to see the plant relicensed to continue providing moderately priced electricity to Iowa, and to preserve the plant's 500 jobs beyond 2014.

Alliant would continue buying power from Duane Arnold's buyer until the plant's license expires. If the plant's license is extended, the buyer will be free to sell the plant's power on the open market.

A key regulatory issue in the sale will be whether ratepayers or shareholders get to keep the proceeds. Alliant would like both to benefit equally, Aller said.

The plant's minority owners are Central Iowa Power Cooperative (20 percent) and Corn Belt Power Cooperative (10 percent).