Why The Economics Don't Work for Kewaunee Anymore

NEI VP Richard Myers

Over the past 24 hours, we've seen a number of folks online ask the question of why it's no longer economically feasible for Dominion to continue to operate the Kewaunee Power Station in Wisconsin. Earlier today, I put the question to Richard Myers, NEI's Vice President, Policy Development, Planning and Supplier Programs. Here's what he wrote back:

In 2005, when Dominion bought the plant: (1) power prices in the Midwest were in the $40-50/MWhr range; wellhead gas prices were in the $6-10 per million Btu range; and U.S. electricity demand was growing.

Today: (1) power prices in the Midwest are in the $30/MWhr range: gas prices are in the $2-3 per million Btu range; and (3) the U.S. has had 5 years of no growth in electricity demand, thanks to the worst recession in 80 years.

Thanks to Richard for laying out the numbers for us. For a statement from NEI's Marv Fertel on the decision to close Kewaunee, click here. For a a quote from an RBS research note that defended the decision, click here.