Utility Will Set Aside Funds to Close N-Plant

Public Service Co. of Colorado said Tuesday it will set aside an additional $63.8 million to cover decommissioning costs of its Ft. St. Vrain nuclear power generating plant, the nation’s only commercially operated gas-cooled nuclear reactor. The controversial and problem-plagued plant was built by San Diego-based General Atomics.

The extraordinary expense will be taken out of the utility’s earnings for the third quarter ending Sept. 30 and will reduce 1988 earnings by 75 cents a share, said Richard Hunt, the utility’s vice president for financial services and treasurer.

The $63.8 million will be added to $95.4 million that the utility set aside in September, 1986, when it announced it was considering closing down the 330-megawatt facility. Ft. St. Vrain, situated in Platteville, about 35 miles north of Denver, has experienced extensive problems ever since opening in 1979, a utility spokeswoman said Tuesday.

The added cost will be paid for out of PSCC’s stockholder equity, not by the ratepayer base, and was determined after a recent updated cost study “associated with the eventual decommissioning and defueling” of the plant.

The utility must decide by early next year on one of three alternatives: to decommission or tear down the plant, to convert it into a fossil-fuel burning power plant or to continue running it as is. The utility has said it can afford to continue running Ft. St. Vrain as a nuclear plant only if it can find a “third party” investor to shoulder part of the expense.

A decision must be made by early next year because the plant’s existing nuclear fuel will run out soon and the utility must place an order for more in the upcoming months.

The $159.2 million in decommissioning costs now set aside would be sufficient to cover a “worst-case scenario” involving a 59-year decommissioning process that could start in 1991, Hunt said in an interview Tuesday.

General Atomics built the plant in hopes it would be the first of many helium-cooled reactors to be safer than water-cooled reactors. But the Three Mile Island nuclear plant accident and the public’s cooling off toward nuclear energy caused the San Diego-based company to scrap additional plant projects.

Formerly owned by Chevron Corp., General Atomics has been under new ownership since 1986. It is attempting to revive its gas-cooled nuclear reactor technology by proposing that the government help finance a $300-million demonstration plant.

Ft. St. Vrain has been operational less than 30% of the time since it opened. Most of the blame for the plant’s problems has been placed on the water-lubricated helium circulators that have leaked gallons of water into the reactor’s core. General Atomics officials have said that the flaws have since been corrected.