Xcel Energy has agreed to pay the Prairie Island Indian Community an extra $7.5 million a year to store spent nuclear waste near tribal land as the utility seeks to extend the life of its power plant on the banks of the Mississippi River.
Under a deal announced Tuesday at the Minnesota Legislature, Xcel said it would increase a yearly payment from $2.5 million to $10 million, a hike that Prairie Island leaders said would bring benefits to the tribe more in line with the tax revenue that nearby local governments like Red Wing get. They asked legislators to adopt the plan into state law.
“To this day, we are the closest — and I repeat, the closest — community to a nuclear power plant and spent nuclear waste in the country,” said Prairie Island President Johnny Johnson during a hearing of the House’s Climate and Energy Finance and Policy Committee. “But we do not receive the typical financial support of a host community and have no choice but to bear the responsibility for our community members’ health and safety.”
Xcel’s plant started operating in the 1970s, and in the 1990s the Legislature authorized the utility to store its waste in casks on Prairie Island, something the tribe opposed at the time, Johnson said. In 2003, that deal was redone, and Xcel agreed to pay the tribe $2.5 million a year.
“The surrounding communities have received hundreds of millions of dollars from the placement of the nuclear plant on Tinta Wita,” Johnson said, referencing Prairie Island. In 2021, Red Wing reported that Xcel paid the majority of its property tax revenue.
Xcel said in a letter to the committee that cities and counties receive “personal property tax from power plants in recognition of the extra burdens that plants may place on those communities.” And while payments to the Prairie Island community haven’t increased in 20 years, the letter says local governments have seen property tax revenue more than double.
And separately, Xcel also pays a fee to the state for storing nuclear waste in Minnesota. The Renewable Development Account “is at approximately $40 million per year and growing,” according to Xcel’s letter, and pays for renewable energy projects.
That money typically does not go to Prairie Island, though lawmakers did approve more than $45 million in 2020 for the tribe to pursue a net-zero energy project after some debate on the matter.
Now, Xcel hopes to extend the life of its Prairie Island plant to help the utility meet its climate goals and the state’s requirement for a carbon-free electric grid by 2040. Nuclear is a large part of Xcel’s carbon-free portfolio and the utility says it will be critical moving forward. Without an extension, the two units at the plant are licensed to operate until 2033 and 2034. Xcel plans to ask regulators for an additional 20 years.
Johnson told lawmakers that the 2003 deal should be updated “to reflect the burden that the tribe carries” in light of the move to 100% clean energy.
In addition to the extra $7.5 million a year, the Prairie Island community would receive $50,000 for each cask of fuel stored on the site. The number of casks will grow as the plant continues to run.
Chris Clark, president of Xcel in Minnesota, said they’re asking for the cash under the deal to come from the state’s Renewable Development Fund.
The deal comes as Xcel deals with fallout from a leak of contaminated water at its Monticello nuclear plant. The company and state environmental regulators contend the tritium pollution poses no risks to drinking water, and Xcel shut down its plant temporarily. The Monticello plant’s license is set to expire in 2030, but the utility has asked regulators for a 20 year extension at the central Minnesota plant, too.
The committee hearing on Tuesday was meant to inform lawmakers of the deal, but it was also a bit of a public show of good faith between Xcel and Prairie Island.
Johnson said the tribe was steamrolled when the plant was first built because they did not have the resources to ask questions of the company or engage in the regulatory process or with lawmakers. He said the federal government also failed to protect the tribe. The plant started operating with the idea that the federal government would build a national waste repository in Nevada, Johnson said, but that never happened. “We were forgotten,” he said.
Clark, at times choking up during his testimony, said the two parties “have covered subjects that are tough in our history, and we have made progress.”
“We work hard to run a safe plant, we work hard to be a good neighbor,” Clark said. “But we think it is important that they are treated equally as a neighboring host community and that they have the opportunity to make the investments that I know … they want to do for their community.”
