Jeremy L. Dillon
RW Monitor
7/25/2014
A Illinois-based engineering firm has begun to make waves in Wisconsin by trying to purchase the Kewaunee Power Station in hopes of re-starting the closed plant. RGA Labs Inc. believes it can harness value from the plant by moving away from the traditional utility model of operation and turning toward a more long-term outlook approach. Dominion announced it would be closing the plant back in 2012 due to a poor economic market for nuclear, even though it had recently been granted a 20-year license extension from the Nuclear Regulatory Commission. RGA President and co-owner Robert Abboud indicated that a small business-minded company could take advantage of the plant. “We have long recognized the traditional utility model is not consistent with the investment required for nuclear and other large scale base load generation,” Abboud told RW Monitor this week. “A hedge fund manager’s view of the world is 90 days long. The utility structure really does not have the corporate structure to invest this type of capital. In today’s environment, it’s the small and medium sized business that really takes the big risks.”
RGA’s plans, though, have major hurdles to overcome. A shut down plant has never returned to operate as an active plant, so the regulatory pathway to re-licensing is murky. The NRC has said that the licensing for the re-opened plant would need to be treated like a brand new plant, Abboud said. The review time in this case would take years to complete, although RGA remains hopeful that the NRC could create a “sort of on-ramp” to connect the new plant licensing and re-licensing regulations to speed the process up. “Right now to there no direct pathway from shutdown license to operating license,” Abboud said. “There’s no question that the licensing issue on a time perspective is the biggest risk. That’s why we need the support of our community, and the support of our elected officials. I’ve spent 35 years dealing with the NRC. I have absolute confidence that they know what to do and how to do it. They may not have a prescriptive process today, but I absolutely expect that they have the capability. The issue is really establishing the priority to do it.”
RGA would also have to overcome the decommissioning activities already taking place at the site. Dominion has begun to initiate preparatory work to enter SAFESTOR, the 60-year period where the plant sits untouched before active decommissioning starts. That prep-work includes the removal of many system components within the plant by recycling the parts for sale to other reactors or disposal. Abboud acknowledges this would be a challenge to replace and refurbish the systems in the plant, but it could be done in a realistic time frame. “The major pieces to putting the thing together are putting the right team together and getting the physical part of the plant up and running,” he said. “And that’s a challenge, some of it needs to be refurbished, some of it has to be replaced, some of it has to be modernized, and some of the systems are just fine as they are. We could make the necessary replacements in the timeframe of NRC licensing though.”
Does Dominion Want to Sell?
Perhaps the biggest hurdle to any re-start, however, is Dominion’s willingness to sell the plant. There appears to be a large gap between the two parties concerning whether RGA has even reach out to the utility to signify its interest. “We haven’t been saying much about it all because at this point it doesn’t involve us,” Dominion spokesman Mark Katz told RW Monitor. “They have not spoken to us, so they are kind of stirring things up locally, but they haven’t really had any dialogue with the company. We are continuing to move forward because in our minds, nothing has really changed, which is true. I’m never going to say never, but somebody has to talk though.”
Katz said that before it entered shutdown, Dominion had looked to sell the plant, but no serious buyers had emerged, including RGA. “Prior to October of 2012 when they made the decision to close the plant, there was a period of 18 months prior to that where the plant was for sale,” Katz said. “There were a number of companies that did express an interest and came in and did their due diligence and in the end they decided the same thing that Dominion had decided—that they could not operate it at a profit. RGA Labs at that point had also expressed an interest. They got the proposal information background sheet and never sent that back in. At that point, that pretty much told us all we need to know as far as their interest. What’s change between then and now? That’s not a question I can answer.”
RGA, for its part, has said Dominion has been the company avoiding the talks. Abboud said that RGA had sent at least four letters to Dominion requesting preliminary talks, with the latest request being sent this week. “I would like to schedule a time to meet with you personally so that we may begin discussion on the sale of Kewaunee, or other suitable arrangement, and return this asset to production for the region preserving hundreds of jobs both at the plant and in the regional community,” Abboud said in a letter to Dominion this week. “Our immediate interest is to begin substantive discussions and a review of the plant condition. I and our team are happy to meet at your earliest convenience at Kewaunee Station.”
Abboud said this week, “I get it that we have kind of put them in a bind. … I want to give them a way out. They have the opportunity to be the big hero of the day. Frankly, I think they have a responsibility to the ratepayers. The ratepayers built that plant. I appreciate that they legally own it. I’m not suggesting that the government should come take it by imminent domain. I think they have a social and moral responsibility to the society who invested all the time, effort, and infrastructure.”
