Unbeknownst to most eastern Wisconsin residents, utilities serving eastern Wisconsin have operated through the winter without two of their three nuclear power plants--Kewaunee and Point Beach Unit 2--producing a single kilowatt-hour of electricity between them.

Off-line since September 21, the 530-MW Kewaunee nuclear generating station is afflicted with a serious corrosion problem in its steam generators. The plant cannot be restarted without either repairing the tubes that had already been plugged or installing replacement steam generators. Experimental laser weld repairs have not been successful to date.

Though new steam generators were installed in Point Beach Unit 2 late last year, indications of declining safety performance at both units have delayed the restart of the 490-MW unit until April at the earliest. The Nuclear Regulatory Commission, which has recently been enforcing safety procedures with unusual vigor, fined Wisconsin Electric Power $325,000 for numerous violations last January. The NRC launched an investigation after a May 1996 explosion that occurred while plant personnel were preparing to load nuclear fuel from the reactor core into a temporary storage container.

Until the outages began, Kewaunee and Point Beach Unit 2 had been among the most productive generators in Wisconsin. Constituting one-tenth of the state's generating capacity, these two baseload plants have produced over 15% of Wisconsin's electricity output this decade.

While they remain shut down, eastern Wisconsin utilities have been purchasing higher-cost electricity from other sources in and outside the state. The three Kewaunee owners--Wisconsin Public Service (WPS), Wisconsin Power & Light (WP&L) and Madison Gas & Electric MG&E)--have asked the Public Service Commission to approve a surcharge to cover the costs of purchasing replacement power while Kewaunee remains dormant.

Replacement power, the three Kewaunee owners claim, costs them collectively about $184,000 a day, which adds up to $5.6 million per month. The surcharge, to be applied on a volumetric basis, will set back residential ratepayers anywhere from a dollar to four dollars a month, with MG&E ratepayers being hit the hardest. If approved (as is widely expected), the surcharge would take effect immediately.

Kewaunee's impact on ratepayers will go beyond the costs associated with the outage. A recent PSC decision to accelerate the collection of Kewaunee's decommissioning and depreciation funds will result in an additional $27 million coming from MG&E, WPS and WP&L ratepayers over the next five years. Therefore, if Kewaunee is not returned to active duty this year, about 40% of Wisconsin's rate base will spend an extra $83 million on their electric bills this year.

Kewaunee's future is clouded by disagreements among the three plant owners over whether to pursue steam generator replacement in 1999. WPS, which owns 41.2% of Kewaunee and is responsible for plant operations, vigorously supports replacing steam generators. WP&L and MG&E, which between them own nearly 59% of the plant, see continued ownership of the plant as a potential liability, especially if power plants are deregulated and Kewaunee would have to compete with low-cost, non-nuclear generators. While WP&L and MG&E would like to see Kewaunee go back on-line as soon as possible, they are unsure whether the $80 million share they would have to kick in toward replacing its steam generators is worth the risks associated with generation competition and nuclear waste storage.

It should be noted that, in a deregulated generation market, Kewaunee's owners would lose the financial advantage of having captive customers who have no choice but to foot the entire $130 million price tag if the PSC were to approve a new set of steam generators for Kewaunee. Furthermore, if generation competition is authorized before the request is approved, WPS, WP&L and MG&E could no longer count on a guaranteed return on their capital investment in Kewaunee. Unfortunately, those disciplining factors are not present in our current rate-regulated environment, in which only a subservient PSC stands, if it can be said to do that, in the way of a new set of steam generators for Kewaunee.

Customer preferences, of course, do not enter into the picture at all. While many customers intuitively understand that renewable energy systems do not require $130 million repairs after two decades of operation, they will remain voiceless bystanders as long as monopoly providers retain exclusive control over major resource decisions. While WP&L presents itself in public as an ardent advocate of customer choice, it has no intention of giving its customers any say over where their electricity comes from until another provider is allowed to compete for its customers.

The convenience of having captive customers will in all likelihood prompt Kewaunee's owners to patch over their differences and forge a unified front in favor of steam generator replacement before the PSC. RENEW will be involved that docket to submit its own economic analysis of shutting down the plant for good, and substituting cleaner, less risky energy resource options for the 40% of Wisconsin customers who may not want to have anything further to do with a white elephant like Kewaunee.