The decision comes as a huge blow for PFS which has already seen Southern Co drop out of the project after suspending its investments back in 2002. Now only the Dairyland Power Cooperative, with less than 12 %, will continue to fund the project, a move which observers suggest effectively signals the end of the controversial development.
Xcel holds a 33% stake in the Private Fuel Storage (PFS) group which is developing the project, making it the single largest investor and had originally expressed an interest in the project as it was facing a waste storage shortage for its Minnesota nuclear plants, where a state law prevented the creation of sufficient additional storage space.
With the national waste repository at Yucca Mountain, Nevada not ready in time, Xcel was forced to pursue alternatives.
However, in 2003 the state overturned the law and with the Administration expected to roll out legislation dealing with interim waste storage that could see action as early as next year, the key argument in favour of Skull Valley appears to be evaporating.
By maintaining a stake in the project, Xcel can monitor congressional developments while allowing the project to be resumed if a waste management solution should fail to appear.