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Point Beach sale marks high reactor price

Thursday, 11 January 2007

A two-reactor plant in Wisconsin, USA, has been sold for $1 billion.The price, including nuclear fuel and other inventory, may be thehighest yet paid on a per-kW basis when decommissioning funds are takeninto account.

Point Beach comprises two pressurized water reactors located near Two Rivers, Wisconsin. Its former owners, Wisconsin Electric Power Company (We Energies) agreed on 20 December with FPL Energy to hand over the plant for $783 million, and buy its stock of fresh nuclear fuel and 'other items' for $215 million.

The deal will be closed in the third quarter of 2007, at which time FPL will take over management of the plant, from current contractors Nuclear Management Company. FPL have states that the plant's 660 full-time employees would all be retained for at least 18 months during the transition.

The Point Beach units were completed in November 1970 and August 1972 respectively. The have both undergone major maintenance work, with their reactor vessel heads and steam generators replaced. In December 2005, the Nuclear Regulatory Commission (NRC) extended the units' operating licences by 20 years to 2030 and 2033.

In the 12 months to the end of June 2006, Point Beach 2 had the highest load factor of any nuclear reactor in the world, achieving 106.5% of its design output, according to figures recently published by Nuclear Engineering International magazine. Its lifetime generation of 122.5 TWh equates to a 78.7% load factor. To June 2006, Point Beach 1 ranked 144th of the world's 400 units for which data is available, with 88.3% averaging a 75.8% over its lifetime.

Together the two units output 1033 MWe and the $783 million price for them equates to $758 per kW of installed generation capacity, among the highest values yet of the 17 occasions in the USA where companies have bought and sold operating nuclear power plants since 1998.

John Reed, Chairman and CEO of Concentric Energy Advisors that managed the sale, told Platts in an interview that the $758 per kW figure comes in as the highest resale price of any US plant when decommissioning funds and existing power purchase agreements are taken into account.

Upon completion of the deal, We Energies may transfer up to $360 million of the existing decommissioning fund to FPL, subject to adjustment according to a power prices. At the same time, We Energies will receive $300 million from the fund.

FPL Energy is a subsidiary of Florida Power and Light Group, while We Energies is a subsidiary of Wisconsin Energy Corporation. The deal must be approved by several bodies, including the NRC, the Public Service Commission of Wisconsin, the Federal Energy Regulatory Commission and the Department of Justice under anti-trust legislation.

Further information

FPL Energy
We Energies