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Xcel Energy Prairie Island site Vice President Kevin Davison and Pam Gorman. in the just-completed administrative building.

RED WING — The Prairie Island nuclear power plant is one of two nuclear plants in Minnesota and 62 nationwide. The specter of nuclear disaster — Three Mile Island, Chernobyl and Fukushima — colors how many view the Prairie Island facility, but the plant has also provided tangible benefits to local communities.

Earlier this month, Red Wing Finance Director Marshall Hillock delivered a document to the city council calling for nearly $22 million in capital improvement projects in 2015, marking a 222 percent increase from 2014.

The city has been eagerly awaiting the report, ever since Xcel filed documents with the state in 2007 requesting a license to operate for another 20 years. Since the extension was approved in 2012, Xcel has poured $400 million into the plant to ensure it continues to operate safely and efficiently. Another $600 million in improvements is planned by 2016, bringing the total price tag of the four-year project to $1 billion.

For comparison, the original nuclear plant was built in 1974 for $350 million.

The upgrades have significantly increased the tax valuation of the nuclear plant property located just down the road from Treasure Island Resort & Casino and the Prairie Island Indian Community. That value figures to keep rising during the next few years.

Pam Gorman, Xcel's community relations and economic development manager, said the company expects to pay about $18 million in taxes in 2015, compared to roughly $14 million in 2014. The city has leveraged that extra tax income to secure millions of state and federal grants for a variety of road and building projects. That was made possible largely by an open working relationship with Xcel officials that allowed years of planning.

"We're really blessed here," Red Wing City Council member Mike Schultz said during the city's Dec. 1 Truth-In-Taxation meeting. "It's a hard thing to say when we're looking at this big (levy) number … (but) these are all dollars we would not have captured had we not leveraged our way in."

The increase in the nuclear plant's tax valuation allowed the city to raise its 2015 tax levy by 18 percent without unduly affecting residents. The complicated math formula means that the owner of a house valued at $150,000 will see a tax increase of $14 next year.

Hallock, who was recently honored with a certificate of achievement by the Government Finance Officers Association of the United States and Canada, hasn't tried to hide his emotions after crunching these numbers for years.

"This is the most exciting document I've ever given to the city council," Hallock said. "It's the blueprint for the next 5 years, and it will change the city for the next 50 years. We spent a tremendous amount of time and energy on this, and now the rubber is about to meet the road."

Dozens of significant projects are planned within the city during the next five years, but three of the biggest will start in 2015. They include a $6.26 million road and river walk project near the Mississippi River, a $5.53 million Downtown Main Street revitalization project, and a $4.78 million construction project to build a fire station and training facility off U.S. Highway 61 on the city's west side.

The city has also budgeted $1 million over the next five years to revitalize its historic downtown district as part of a 10-year vision currently being developed by Red Wing Downtown Main Street executive director Wendy Ward.

Secondary benefits

While the Prairie Island Indian Community doesn't enjoy the same tax benefits as Red Wing, the nuclear plant, just 600 yards from the reservation, has provided ancillary benefits.

In 2013, a joint venture by Xcel, Greater Minnesota Gas and the Prairie Island Indian Community proved to be a windfall for the local tribe. According to data provided by Xcel, more than 27 miles of pipe was laid to connect a natural gas line from Hampton to the nuclear plant, which had previously operated on propane.

As of Jan. 2014, most of the Indian community had also made the switch from propane — including Treasure Island Resort & Casino. That's reduced propane delivery trucks by 110 per year and is expected to result in annual savings of around $600,000.

"It's good for them, and it's good for us and our workers too," said Xcel regional vice president Laura McCarten.

Nuclear plant outages, which occur about every 18 months, also pay dividends for the Indian community. The casino's hotel offers discounted rates for outage workers, who routinely pack the place before unwinding at the slot machines. The casino also shares parking space and provides shuttle transport to the nuclear plant.

The 2013 outage to install two new steam turbines was the largest outage on record. The $280 million project brought in about 1,200 extra workers for three months, numbers that doubled the plant's typical workforce.

The influx of workers caused a hotel shortage across the region and prompted Red Wing Chamber of Commerce president Patty Brown to request that citizens open up their homes to accommodate one of the largest employers in Goodhue County.

"Once the hotels and motels were filled up, we sent out messages to the community asking for spare space or rooms that could be rented out," Brown said, noting she had 200 offers within days. "The response was overwhelming. The feedback that we got from the people who had these people in their homes … was they wanted to stay there again next outage. We did not hear a single complaint."

The extra bodies in the community of about 16,000 also proved a boon for local bars and restaurants, Brown said.

While those impacts are simply a byproduct of the nuclear plant's location, Xcel site vice president Kevin Davison said the company also goes out of its way to improve the community. Employees donated more than $100,000 to United Way in 2013 and have volunteered hundreds of hours to projects throughout the area.

A recent company golf outing raised another $42,000, and Xcel Energy provided a total of $65,000 in grants earlier this month to 10 non-profit groups in Red Wing. Additionally, thousands more have been donated to Red Wing Ignite, the C.A.R.E. Clinic in Red Wing and the Red Wing Area Food Shelf.

"We're actually lucky that our company is very supportive of that — to the point where our employees are given a couple of days off, with pay, to do that stuff," Davison said. "For Xcel to do that, it tells you about their beliefs and values."

Hallock said the city has tried for years to develop a workable cost-benefit formula for being a host community, but the calculations have proven too complex.

Local, vocal critics

Kristen Eide-Tollefson has been an outspoken critic of the nuclear plant since at least 1994, when she helped form a group called Citizens United for Responsible Energy, or CURE.

The Frontenac woman, who once sat on the Goodhue County Planning Advisory Commission, admits to frequently calling people involved with the nuclear facility during the past 20 years just to "irritate the hell out of everyone."

It's been her pet project for decades, and she doesn't see the issues going away any time soon — especially with the controversial NRC ruling this fall that could result in spent nuclear waste staying on-site for centuries.

"It's challenging, as citizens, to participate in complicated issues like this, but there's so many issues that need to be spoken to at a place like Prairie Island," said Eide-Tollefson, who is also part of the Prairie Island Nuclear Generating Plant Study Group that formed in 2003. "The federal government — and this is the alarming part — is talking about leaving it on-site for hundreds of years. There is not funding. We know that the casks and the pads have to be replaced at least every 100 years to keep it safe. There's no planning or funding for that. This is really a critical time."

In the NRC's recent ruling, it expressed confidence that a national repository for nuclear waste will be created within the next 60 years — despite the fact it was required by law in 1998. For context, the reference to the repository was on page 56,254 in a federal filing about the issue.

The repository figures to be a contentious point at Xcel's ongoing triennial nuclear decommissioning docket at the Minnesota Public Utilities Commission, which began days after the NRC ruling was issued. In Xcel's 1,312-page PUC filing, the company says it's currently budgeting for 60 years to safely store on-site nuclear waste while collecting about $14 million a year.

Eide-Tollefson expressed concerns about who would be financially responsible if on-site storage lasts longer than 60 years. The City of Red Wing has yet to file an official response to the docket after being approved as an intervener in December, but it could raise that same point in coming weeks — and it's a big one.

Xcel's PUC filing says that it would require $35.5 million annually to manage the waste for 100 years. That figure jumps to $42.3 million if budgeting for 200 years.

Added Eide-Tollefson: "If we just keep kicking the can down the road until Xcel isn't responsible anymore, we're doing everyone a great disservice. There is no responsible nuclear waste management without having the funding in place."

Other public safety issues have popped up in past years.

For example, the Red Wing nuclear plant reported two tritium leaks between November 2011 and February 2012, including one of 3,900 gallons that prompted a response from Homeland Security and Emergency Management.

Neither exceeded the level the EPA set as safe in its 1976 policy, but some agencies still voiced concerns about the release of the cancer-causing form of hydrogen.

"Minnesota shouldn't have to worry about getting cancer from drinking a glass of water," Minnesota Public Interest Research Group Board Chairwoman Natalie Cook said at the time.

Additionally, the nuclear plant had a chlorine spill on Jan. 4, 2012 that prompted its first — and only — emergency alert in four decades of operation. No one was hurt.

Despite those issues, Davison said that safety remains the plant's highest priority — particularly as it pertains to dry cask storage.

In fact, Xcel claims to have avoided 10,540,000 metric tons of carbon by using nuclear instead of coal or natural gas. The average operating capacity is also 90.9 percent, providing the base load for Xcel to be the top wind energy producer in the country.

"Our language here is safety's the ticket to the dance," Davison said. "The frustrating part is all the headaches that come with (on-site storage). What we want is a final solution so we can start shipping it to a final repository."

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