Aug 13 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Adrian Sanchez Columbus Telegram, Neb.

The Nebraska Public Power District board of directors approved funding for the first phase of a project to safely store used nuclear fuel at Cooper Nuclear Station.

Also on Friday, the board heard results of a cost of service study and the proposal for a potential rate increase needed in 2007. NPPD management asked its board to consider a 3.5 percent average wholesale rate increase starting in 2007. They cited rising fuel costs, equipment and power plant upgrades, as well as the need for additional transmission lines and substations to support increasing electrical demand from electric-well irrigation, ethanol plants and the state's growing economy.

Projects can cost in the millions of dollars, and NPPD is cognizant of its mission to keep rates low while still providing reliable energy, according to a press release issued by NPPD. However, rate increases can become necessary as past, present, and future projects emerge, such as the dry-cask nuclear fuel storage system.

According to the press release, "a dry-cask nuclear fuel storage system will maintain the safe and efficient storage of the (CNS's) used nuclear fuel and involves the transfer of some used fuel from wet storage (a fuel pool) to dry storage in secure, concrete and steel casks."

Dry cask storage is a method of storing high-level radioactive waste, such as spent nuclear fuel, that has already been cooled in the spent fuel pool for at least one year. The fuel is surrounded by inert gas inside a large container.

The dry cask fuel storage project will be conducted in two phases, according to the press release.

The first phase, at an approximate cost of $19.7 million, will include the design, engineering and key components of a dry-cask nuclear fuel storage system at CNS.

Beth Boesch, the corporate communications and public relations manager for NPPD, said the NPPD board is expected to vote on funding for the second phase, estimated at $25.3 million, in 2007.

"The funding will go toward construction of the facility, licensing, engineering, any plant modifications needed, training ... and other quality assurance costs," Boesch said. The total cost of the project is estimated at $45 million and is expected to be completed by September 2008.

The board also voted in favor of a $5.7 million project to increase or "uprate" the capacity of the 778-megawatt nuclear power plant by installing high-accuracy monitoring equipment. The new equipment is expected to increase the capacity of the plant an additional 12 megawatts.

Ron Asche, NPPD president and CEO, said these are important investments for not only NPPD, but the communities impacted by CNS.

"Cooper plays an important role in NPPD's generation mix and helps support the economy of communities in southeast Nebraska," Asche said. "Pursuing this dry fuel storage system and the power uprate complements investments the board has made in such projects as license renewal, training facilities, and the replacement of various generator equipment assets."