Nuclear energy - world's most expensive pig-in-a-poke

[kristopher]

Rising cost of Florida’s new nuclear power getting scrutiny
Customer groups ask state regulators to require FPL and Progress Energy to answer how much new nuclear plants will cost and when they’ll be built

By Mary Ellen Klas
Herald/Times Tallahassee bureau

TALLAHASSEE -- For the past two years, customers of Florida’s largest electric companies have been paying to build new nuclear power plants that have an escalating price tag and no guarantee of completion.

Attorneys for consumers and the state’s largest electricity users told the Public Service Commission on Monday to demand answers from the utilities.

What they want to know: When will the public see the power plants promised by Florida Power & Light and Progress Energy Florida as the lowest cost way to meet Florida’s future energy needs? How much will they cost customers? And will regulators make sure that the electric companies have skin in the game when their costs climb, such as prohibiting them from passing on cost overruns to customers?

“Progress Energy has spent $1 billion and gotten not much more than a large tract of land and a license,’’ said Charles Rehwinkel, associate public counsel, who represents the public in cases before the PSC...

http://www.miamiherald.com/2011/08/01/2340842/rising-cost-of-floridas-new-nuclear.html


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And in related news:


Consumer, not Georgia Power, would be on hook for potential Vogtle overruns
By Kristi E. Swartz

The Atlanta Journal-Constitution

A consumer watchdog group on Thursday continued to press for an agreement that would make Georgia Power — and not consumers — pay for any major cost overruns at its Plant Vogtle nuclear expansion project, but Georgia utility regulators remained resistant.

At an energy committee meeting in their downtown Atlanta chambers, Public Service Commission members said they would support only a July 18 deal reached between Georgia Power and the PSC’s advocacy staff, one that removed a recommendation calling for Georgia Power’s profits to be reduced should the costs to build two nuclear reactors at Plant Vogtle exceed budget by $300 million. Additional costs, with PSC approval, would show up in customers’ monthly utility bills.

Georgia Power executives have argued that a cost-containment plan, originally considered and rejected by the PSC but still pursued by Georgia Watch, could drive up the project’s financing costs, potentially damaging the ability to raise capital. That, in turn, could increase customer bills.

Commissioner Tim Echols was more pointed, saying approval for such a plan would “chill the construction of nuclear plants in the United States.”...

http://www.ajc.com/business/consumer-not-georgia-power-1055562.html


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And from the archives:

CBO estimate on nuclear loan guarantees

For this estimate, CBO assumes that the first nuclear plant built using a federal loan guarantee would have a capacity of 1,100 megawatts and have associated project costs of $2.5 billion. We expect that such a plant would be located at the site of an existing nuclear plant and would employ a reactor design certified by the NRC prior to construction. This plant would be the first to be licensed under the NRC’s new licensing procedures, which have been extensively revised over the past decade.

Based on current industry practices, CBO expects that any new nuclear construction project would be financed with 50 percent equity and 50 percent debt. The high equity participation reflects the current practice of purchasing energy assets using high equity stakes, 100 percent in some cases, used by companies likely to undertake a new nuclear construction project. Thus, we assume that the government loan guarantee would cover half the construction cost of a new plant, or $1.25 billion in 2011.

CBO considers the risk of default on such a loan guarantee to be very high—well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources. In addition, this project would have significant technical risk because it would be the first of a new generation of nuclear plants, as well as project delay and interruption risk due to licensing and regulatory proceedings.

Note the price - $2.5 billion was to be only for the first plant. Future plants were, according to the assumptions provided by the nuclear industry, expected to have lower costs as economy of scale resulted in savings.

In fact, since the report was written the estimated cost has risen to an average of about $8 billion and the percentage of the loan guaranteed by taxpayers has increased to 80%.

Wonder what that does to the “risk is that … the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources”?

Does that risk diminish or increase when the price rises from $2.5 billion to $8 billion?

[saras]

1. This "pig in a poke" has been dripping toxic crap from the bag for decades

It's the only pig I've seen that can kill for hundreds of years past its own death.

[kristopher]

2. At least someone in Congress is paying attention...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x618309#618406