This blog was written by Sara Barczak, former Regional Advocacy Director with the Southern Alliance for Clean Energy.Guest Blog | October 2, 2014
Hint: this isn’t a hard question to answer if you look back at the nuclear power industry’s track record. And the answer is?
Drum roll please…
All five nuclear reactors presently under construction in the U.S. are… delayed and over budget. That’s 100%! Every single one…
SCANA now joins other utilities including Tennessee Valley Authority and the Southern Company in being plagued with scheduling delays and cost overruns as they attempt to build two new reactors at their V.C. Summer nuclear plant. The utility just revealed that their portion of the troubled Toshiba-Westinghouse AP1000 project has increased by $660 million in 2007 dollars, bringing the full estimated cost overrun for the project to over $1.2 billion. Original cost estimates were $10 billion. In early August, the utility announced another delay of approximately 12 months; the project is now more than 2 1/2 years delayed. SCANA’s subsidiary, SCE&G, is majority owner with 55% of the project; Santee Cooper with 45%. The announcement occurred conveniently just one week after SCE&G received approval from the South Carolina Public Service Commission (PSC) for the seventh pay-in-advance rate increase, which SRS Watch reported that the total amount for the new nuclear project in customer’s utility bills would now be around 13%!
TVA’s antiquated Watts Bar 2 in Tennessee, Southern Company’s two AP1000’s reactors at Plant Vogtle in Georgia (their subsidiary Georgia Power and utility partners Oglethorpe Power, MEAG and Dalton Utilities), and now SCE&G and Santee Cooper’s V.C. Summer in South Carolina, are all significantly behind schedule and over budget. Especially Watts Bar 2 given TVA started construction back in the early 1970s!
The really disturbing thing about this situation is that there are essentially no protections for consumers when it comes to these projects. One after the other we see the same story play out – at first a low cost estimate with extreme confidence that things will be different this time around, ignoring the nuclear power industry’s terrible track record (and TVA ignoring it’s own record with the same project!). And then the industry is showered with “incentives.”
In Georgia, South Carolina and Florida state lawmakers are duped and pass anti-consumer legislation that allows the big power companies to charge customers in advance for certain costs associated with the proposed new reactors, with no refund if the projects go belly up or protections if they veer off schedule. And then the Feds come in (after Congress decides to authorize a lot of money) and offer up over $8 billion in U.S. taxpayer-backed federal nuclear loan guarantees to the Vogtle utility partners just to ensure that taxpayers are now on the hook too instead of Wall Street investors (all while keeping the public in the dark as to what exactly is going on). And then guess what? The problems start but the utilities’ and their regulators’ rose-colored glasses stay on for far too long and consumers are left holding the bag. Vogtle for instance is at least 21 months delayed with the original $14.1 billion estimate now more likely around $15.5 billion. FPL and Duke Energy Florida (formerly Progress Energy Florida) customers really know what I’m talking about. Billions of their hard-earned dollars wasted on nuclear aspirations and not a kilowatt hour of electricity produced.
But back to the five reactors actually under construction. SACE has argued and will continue to argue that these cost overruns should not and do not have to only be borne by utility customers. SCANA and Southern Company’s shareholders for instance, who stand to profit significantly from the long-term rate of return guaranteed on these multibillion-dollar investments should pick up much of these cost overruns. Ratepayers are basically carrying all the risk, while shareholders are getting all the profit. Utility customers can’t afford any more examples in order to confirm what their wallets have already learned — that building reactors is a very, very bad decision. Regulators and lawmakers — please take off those rose-colored glasses!