Minnesota lawmakers take a fresh run at lifting the ban on new nuclear plants

Momentum is building at the Minnesota Legislature to lift the 31-year-old moratorium on new nuclear plants, with newly empowered Republicans naming it a top priority and resistance softening among DFLers.

GOP lawmakers in the narrowly divided House and Senate have introduced bills to end that moratorium, reigniting a debate over whether the around-the-clock carbon-free energy produced by nuclear reactors is worth the cost and the health and safety risk of storing waste in Minnesota.

“We have to make energy reliable and affordable, and one of the ways that we plan to do that is repeal the nuclear moratorium,” said Rep. Lisa Demuth of Cold Spring, who is the Republican leader in the state House, during a news conference earlier this month.

The GOP would still need help from their DFL counterparts, where there is growing support for the technology as a way to meet clean energy goals and complement the inconsistent production from wind and solar farms.

Former President Joe Biden wanted to triple U.S. nuclear capacity by 2050. Locally, Democrats in the Minnesota Senate approved legislation the last two years to study new smaller-scale nuclear reactors.

The bills were twice rejected by House DFLers who favor other technologies such as batteries. Xcel’s tritium leak in 2023, which state officials said posed no health threat, also spooked some.

“I guess we’re old fashioned,” said Rep. Patty Acomb of Minnetonka, the top House Democrat on energy issues. “But we remember the problems that nuclear energy can bring.”

Supporters of nuclear hope the escalating need for steady clean power might change that divide in a state where law requires a carbon-free grid by 2040. Electric utilities are now confronting a potentially huge spike in energy consumption from massive data centers, electric vehicles and electric home heating.

Democratic legislators appear open to a change, provided the idea has the support of a different government: The Prairie Island Indian Community.

The politics of nuclear power today in Minnesota reflect the legacy of what happened at Prairie Island. Xcel Energy built its reactors in the 1970s, and the Prairie Island tribe says it didn’t have the resources to question, slow or influence the project 700 yards away from its reservation on the Mississippi River near Red Wing.

When the federal government failed to deliver on its promise of a national permanent waste repository, the Minnesota Legislature in 1994 gave Xcel permission to store refuse on site in dry casks, despite tribal opposition.

At the same time, lawmakers passed a moratorium on new plants, saying the cost of waste disposal could be a burden on utility customers.

This week, Blake Johnson, Prairie Island’s government relations director, testified at the Legislature that tradeoffs over cost and waste from 1994 are still true today. The tribe opposes lifting the nuclear moratorium without a viable solution for waste storage.

Still, the Prairie Island community has lately had a warmer relationship with Xcel, whose carbon-free goals hinge on extending the life of the Prairie Island and Monticello nuclear plants into the 2050s.

Those plants generate about 40% of Xcel’s carbon-free electricity and roughly a third of the company’s electricity in the Upper Midwest.

The company struck a deal in 2023 to pay the Prairie Island community more money for waste storage as Xcel seeks to stockpile more spent fuel generated by the plant over an additional 20 years.

Johnson also said Prairie Island supports the move to clean energy and recognizes need for reliable clean power. “We are well aware of the consequences of climate change if we do not take action,” he said.

For Xcel, keeping its existing plants running is more important now than building a new one.

Xcel lobbyist Rick Evans told a panel of House Republicans on Tuesday that the company has over the years “come to understand the impact that the plant has on the Prairie Island Indian Community.” Xcel’s support for repealing the ban “will depend on the full participation of the Prairie Island Indian Community as a critical stakeholder in the discussion,” Evans said.

In October, Xcel CEO Bob Frenzel told the Minnesota Star Tribune that his company can for now build enough wind and solar to meet its needs, so it will hold off on proposing a new plant until technology improves, costs decline, and support for nuclear grows in the U.S. and around the world.

“I think we have the opportunity to wait, fairly patiently,” Frenzel said.

In recent years, new nuclear plants have incurred multi-billion dollar cost overruns. Rising costs also forced delays in emerging technology for smaller reactors that developers hope will be easier and cheaper to permit.

“One of the things that’s gotten this country in trouble over 50 years of nuclear history is building without engineering being completed, building without technology being completed,” Frenzel said.

New nuclear may not be cheap. But other power providers paint the nuclear moratorium as irresponsible, especially for those that don’t own existing plants.

“Nuclear is the single biggest answer to a question about how do you meet all these challenges and get carbon free and 24/7 reliability,” said Darrick Moe, CEO of the Minnesota Rural Electric Association, which represents cooperative utilities.

Xcel and other utilities promise a reliable grid. Across the 15-state grid that includes Minnesota, however, coal plants are retiring faster than power companies can replace that energy, according to reliability experts.

That coal is primarily being replaced with wind and solar. The nonprofit North American Reliability Corporation warned the regional grid is at risk of supply shortages starting this summer.

Minnesota utilities are planning new batteries and gas plants. They’re also testing other strategies like long-duration batteries, producing and burning hydrogen or using gas while capturing and storing the carbon emissions.

Those newer technologies all carry their own promise, but also questions about effectiveness and cost.

Big Tech is increasingly embracing — and paying for — nuclear. Google is investing in a fleet of smaller nuclear plants.

Microsoft is paying to reopen Three Mile Island power plant in Pennsylvania, and a power provider in South Carolina wants to restart construction on a giant project to meet data center demand.

Amazon’s proposed data center in Minnesota would need nearly as much power as Xcel’s large Monticello nuclear plant now produces.

Top House and Senate Democrats said support from the Prairie Island community is necessary for them to lift the moratorium. Gov. Tim Walz previously backed the idea of studying emerging nuclear technology. He has, however, made little effort to advance the cause of new nuclear as governor.

Walz declined to comment for this story. In the past, he has also said solving the waste storage riddle for Prairie Island is key.

Republicans say they feel that way as well.

“Their concerns need to be addressed and looked at,” said Rep. Chris Swedzinski, R-Ghent. “If we’re going to allow more nuclear power in Minnesota, is it going to be their responsibility to store any waste in their backyard or will they have relief and have the guarantee that it’s not going to get moved there?”