JUNO BEACH, Fla. and CEDAR RAPIDS, Iowa, July 27, 2018 /PRNewswire/ -- NextEra Energy Resources, LLC through its affiliates (NextEra Energy Resources) and Alliant Energy's Iowa energy company have agreed to shorten the term of their existing power purchase agreement (PPA) for the output from the Duane Arnold Energy Center (DAEC) by five years in exchange for a buyout payment. The companies' new agreements also include new repowered wind PPAs. These transactions will save Alliant Energy's Iowa customers nearly $300 million in energy costs, on a net present value basis, over 21 years. Assuming all requisite approvals are received, the DAEC is expected to cease commercial operations in late 2020.
"The Duane Arnold Energy Center has provided reliable energy to Alliant Energy's Iowa customers for decades," said Patricia Kampling, chairman and CEO of Alliant Energy. "Partially replacing energy from Duane Arnold with NextEra's additional wind investments in Iowa will bring significant economic benefits to our customers."
"The eventual closing of the Duane Arnold Energy Center is a difficult decision because of the approximately 500 highly skilled men and women who consistently have made it one of the top-performing nuclear facilities in the country," said Armando Pimentel, president and CEO of NextEra Energy Resources. "You have our assurance that we will continue to practice our corporate values of doing the right thing by our colleagues and treating them with the respect they have earned and deserve. We are committed to minimizing any impact today's announcement may have on them, their families and the community they call home. Importantly, as we proceed into the next decade, several hundred jobs will remain at the plant for a number of years as a result of what will be a lengthy decommissioning process, along with the creation of new jobs through our continued investment in Iowa."
Alliant Energy has agreed to make a $110 million buyout payment to NextEra Energy Resources in September 2020 to cover the cost to shorten the term of the DAEC PPA from 2025 to 2020. Alliant Energy intends to apply to the Iowa Utilities Board today (July 27) for approval regarding recovery of the buyout payment. Alliant Energy's Iowa customers are expected to save nearly $300 million, on a net present value basis, starting on or before Jan. 1, 2021, contingent on the Iowa Utilities Board's approval of Alliant Energy's request. The savings estimate includes the cost of the amendment payment and the costs for replacing energy and capacity.
Under the agreements, NextEra Energy Resources will supply wind energy from four repowered Iowa wind facilities, representing approximately 340 megawatts of clean, emissions-free electricity for Alliant Energy's Iowa customers.
Continuing its commitment to the state of Iowa, NextEra Energy Resources plans to invest approximately $650 million in existing and new renewables generation across the state by the end of 2020, including the planned approximately $250 million to repower the four wind facilities as part of these transactions. Repowering these facilities is expected to create 200 new construction jobs during the process, as well as extend payments to landowners and tax revenues for local communities for decades. NextEra Energy Resources also is evaluating redevelopment opportunities at the DAEC site, including the construction of new solar energy, battery storage or natural gas facilities.
NextEra Energy Resources expects a gradual reduction in staffing at the DAEC over the next seven years as the decommissioning process takes place. To support DAEC employees during the transition, NextEra Energy Resources has developed a comprehensive employee plan that includes an enhanced retirement program for eligible employees, placement in other jobs throughout the company, and job retraining, outplacement services and severance packages, where applicable. NextEra Energy Resources also is partnering with Alliant Energy and other companies in the energy industry to identify opportunities for DAEC employees.
At the appropriate time, the Midcontinent Independent System Operator and the Nuclear Regulatory Commission will be notified of the intent to permanently cease operations and decommission the DAEC.
About Alliant Energy
Alliant Energy Corporation's Iowa utility subsidiary, Interstate Power and Light Company (IPL), utilizes the trade name of Alliant Energy. The Iowa utility is based in Cedar Rapids, Iowa, and provides electric service to 490,000 retail customers and natural gas service to 220,000 retail customers. The employees of Alliant Energy focus on delivering the energy solutions and exceptional service their customers and communities expect – safely, efficiently and responsibly. Alliant Energy Corporation is traded on the New York Stock Exchange (NYSE: LNT) and is a component of the S&P 500. For more information, visit alliantenergy.com.
NextEra Energy Resources
NextEra Energy Resources, LLC (together with its affiliated entities, "NextEra Energy Resources"), is a clean energy leader and is one of the largest wholesale generators of electric power in the U.S., with more than 19,000 megawatts of net generating capacity, primarily in 32 states and Canada as of year-end 2017. NextEra Energy Resources, together with its affiliated entities, is the world's largest operator of renewable energy from the wind and sun. The business operates clean, emissions-free nuclear power generation facilities in New Hampshire, Iowa and Wisconsin as part of the NextEra Energy nuclear fleet, which is one of the largest in the United States. NextEra Energy Resources, LLC is a subsidiary of Juno Beach, Florida-based NextEra Energy, Inc. (NYSE: NEE). For more information, visit www.NextEraEnergyResources.com.
NextEra Energy Cautionary Statements and Risk Factors That May Affect Future Results
This news release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra Energy, Inc. (together with its subsidiaries, NextEra Energy) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of NextEra Energy's control. In some cases, you can identify the forward-looking statements by words or phrases such as "will," "may result," "expect," "anticipate," "believe," "intend," "plan," "seek," "potential," "projection," "forecast," "predict," "goals," "target," "outlook," "should," "would" or similar words or expressions. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance. The future results of NextEra Energy and its business and financial condition are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, or may require it to limit or eliminate certain operations. These risks and uncertainties include, but are not limited to, the following: effects of extensive regulation of NextEra Energy's business operations; inability of NextEra Energy to recover in a timely manner any significant amount of costs, a return on certain assets or a reasonable return on invested capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of political, regulatory and economic factors on regulatory decisions important to NextEra Energy; disallowance of cost recovery based on a finding of imprudent use of derivative instruments; effect of any reductions or modifications to, or elimination of, governmental incentives or policies that support utility scale renewable energy projects or the imposition of additional tax laws, policies or assessments on renewable energy; impact of new or revised laws, regulations, interpretations or other regulatory initiatives on NextEra Energy; capital expenditures, increased operating costs and various liabilities attributable to environmental laws, regulations and other standards applicable to NextEra Energy; effects on NextEra Energy of federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions; exposure of NextEra Energy to significant and increasing compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal regulation of its operations and businesses; effect on NextEra Energy of changes in tax laws, guidance or policies as well as in judgments and estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy of adverse results of litigation; effect on NextEra Energy of failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget; impact on development and operating activities of NextEra Energy resulting from risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements; risks involved in the operation and maintenance of electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities; effect on NextEra Energy of a lack of growth or slower growth in the number of customers or in customer usage; impact on NextEra Energy of severe weather and other weather conditions; threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy's business or the businesses of third parties; inability to obtain adequate insurance coverage for protection of NextEra Energy against significant losses and risk that insurance coverage does not provide protection against all significant losses; a prolonged period of low gas and oil prices could impact NextEra Energy's gas infrastructure business and cause NextEra Energy to delay or cancel certain gas infrastructure projects and for certain existing projects to be impaired; risk of increased operating costs resulting from unfavorable supply costs necessary to provide full energy and capacity requirement services; inability or failure to manage properly or hedge effectively the commodity risk within its portfolio; effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's risk management tools associated with its hedging and trading procedures to protect against significant losses, including the effect of unforeseen price variances from historical behavior; impact of unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of power or natural gas; exposure of NextEra Energy to credit and performance risk from customers, hedging counterparties and vendors; failure of counterparties to perform under derivative contracts or of requirement for NextEra Energy to post margin cash collateral under derivative contracts; failure or breach of NextEra Energy's information technology systems; risks to NextEra Energy's retail businesses from compromise of sensitive customer data; losses from volatility in the market values of derivative instruments and limited liquidity in OTC markets; impact of negative publicity; inability to maintain, negotiate or renegotiate acceptable franchise agreements; occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy's ability to successfully identify, complete and integrate acquisitions, including the effect of increased competition for acquisitions; environmental, health and financial risks associated with ownership and operation of nuclear generation facilities; liability of NextEra Energy for significant retrospective assessments and/or retrospective insurance premiums in the event of an incident at certain nuclear generation facilities; increased operating and capital expenditures and/or result in reduced revenues at nuclear generation facilities resulting from orders or new regulations of the Nuclear Regulatory Commission; inability to operate any owned nuclear generation units through the end of their respective operating licenses; effect of disruptions, uncertainty or volatility in the credit and capital markets on NextEra Energy's ability to fund its liquidity and capital needs and meet its growth objectives; inability to maintain current credit ratings; impairment of liquidity from inability of credit providers to fund their credit commitments or to maintain their current credit ratings; poor market performance and other economic factors that could affect NextEra Energy's defined benefit pension plan's funded status; poor market performance and other risks to the asset values of nuclear decommissioning funds; changes in market value and other risks to certain of NextEra Energy's investments; effect of inability of NextEra Energy subsidiaries to pay upstream dividends or repay funds to NextEra Energy or of NextEra Energy's performance under guarantees of subsidiary obligations on NextEra Energy's ability to meet its financial obligations and to pay dividends on its common stock; the fact that the amount and timing of dividends payable on NextEra Energy's common stock, as well as the dividend policy approved by NextEra Energy's board of directors from time to time, and changes to that policy, are within the sole discretion of NextEra Energy's board of directors and, if declared and paid, dividends may be in amounts that are less than might be expected by shareholders; NEP's inability to access sources of capital on commercially reasonable terms could have an effect on its ability to consummate future acquisitions and on the value of NextEra Energy's limited partner interest in NextEra Energy Operating Partners, LP; and effects of disruptions, uncertainty or volatility in the credit and capital markets on the market price of NextEra Energy's common stock. NextEra Energy discusses these and other risks and uncertainties in its annual report on Form 10-K for the year ended December 31, 2017 and other SEC filings, and this news release should be read in conjunction with such SEC filings made through the date of this news release. The forward-looking statements made in this news release are made only as of the date of this news release and NextEra Energy undertakes no obligation to update any forward-looking statements.
Alliant Energy Cautionary Statements and Risk Factors That May Affect Future Results
This press release includes forward-looking statements which represent the current expectations of Alliant Energy Corporation (together with its subsidiary, Interstate Power and Light Company) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of Alliant Energy's control. These forward-looking statements can be identified because they describe regulatory approvals and future agreed-to actions. These forward-looking statements can be identified because they include words such as "intends," "expected," "estimate," "will," or words of similar nature. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Actual results could be affected by such factors as: state regulatory actions which delay, prevent or alter the proposed plans, including rate recovery levels and returns on equity; the inability to obtain all necessary approvals; increased costs; current or future litigation, regulatory investigations, proceedings or inquiries that could impede the implementation of Alliant Energy's plans; political conditions in Alliant Energy's service territories; changes to Alliant Energy's access to capital markets; and economic conditions in Alliant Energy's service territory. These factors should be considered when evaluating the forward-looking statements and undue reliance should not be placed on such statements. The forward-looking statements included herein are made as of the date hereof and Alliant Energy and Interstate Power and Light Company undertake no obligation to update publicly such statements to reflect subsequent events or circumstances.
SOURCE NextEra Energy Resources; Alliant Energy