New U.S. reactors: overbudget, behind schedule, shirking safety regs

The Summer nuclear project, May 2014. Still a long ways--and a lot more rate increases--to go.

The Summer nuclear project, May 2014. Still a long ways–and a lot more rate increases–to go.

The nuclear “renaissance” began fizzling about three minutes after it was declared, once utility financial people took over from the nuclear boosters and did a real examination of reactor construction cost estimates, declining electrical demand, falling prices for natural gas, and rapid growth of renewables.

But five new reactors, aided by unique circumstances, do remain under construction in the U.S.: two at Southern Company’s Georgia Power Vogtle site in Georgia, two at SCANA’s Summer site in South Carolina, and the Tennessee Valley Authority’s Watts Bar-2 reactor in Tennessee. Both Vogtle and Summer are aided by their control of their state’s Public Service Commission, which kindly allows the utilities to use ratepayers as their banks; both utilities are collecting money from ratepayers as construction goes on, enabling them to borrow less and repay what they do borrow faster. And the Vogtle project also has received $6.5 Billion in low-interest taxpayer loans from the Federal Financing Bank, with another $1.8 Billion to some of its partners still expected. TVA is in a class of its own–a federal government agency with its own budget and authority and Congressional backers who will readily support just about anything it wants to do–as long as it’s not spending too much money on renewable energy and energy efficiency programs. 

Utilities without those advantages quickly dropped out of the nuclear “renaissance,” or at least decided to wait and see if these first utilities are able to overcome the soaring costs and schedule delays of the first generation of nuclear power that left a few utilities bankrupt and many others bruised and battered, and build these new reactors on-budget and on-time. If they can, and if the reactors operate reasonably well and if they can successfully compete with gas and renewables, then some of the utilities that were interested in new reactors a few years ago could well decide to proceed with their earlier plans. That is certainly the hope of the nuclear industry; really its only hope for a future.

Those are big “ifs,” and at this point it doesn’t look promising for a nuclear future.

The Vogtle reactors are already nearly two years behind schedule. Construction began in 2012 and the first unit was supposed to come online in April 2016. That has slipped to January 2018, with the second unit to be completed by the end of that year. Cost for the two reactors was set at $14 Billion, although it is believed that already has been exceeded by about $900 million.

Yesterday, two monitors appointed to evaluate the Vogtle project for the Georgia Public Service Commission issued a report casting serious doubts on both the current schedule and the cost estimate. The report has not been posted on the Georgia PSC website yet but according to the Associated Press, the report said that Georgia Power faces “many challenges” in meeting even its revised schedule, and that the utility’s own detailed construction schedule only runs through December 2015. As the AP put it, “That incomplete timeline does not entirely make clear how the firms that are designing, building and will own the plant intend to compress the construction schedule to stay on track.”

The monitors said that further delays in the schedule will cost the utility–and because of the Georgia’ PSC’s policies, ratepayers–$2 million for every day of delay. They added that “company officials have had trouble accurately forecasting how long it will take to complete construction activities.”

In other words, expect significant delays and ever-rising costs.

In South Carolina, SCANA filed in late May a request for its seventh rate increase for construction of the Summer reactors. If approved by the PSC, ratepayers will be paying 37% more for electricity than they were in 2009, when plans for Summer were first approved. At the time, the utility told regulators it expected that total rate increases for Summer would be 37%, but as the Columbia State pointed out, “Consumers likely face five more years of increases to pay for two new nuclear plants under construction in Fairfield County, just north of Columbia.”

SCANA has not officially changed its original cost estimate of $9.8 Billion for both reactors–or more than $4 Billion less than the nearly identical Vogtle reactors–but it seems unlikely the utility can meet that budget. It is not clear why SCANA is projecting such a lower cost than Vogtle: both projects are nearly identical first-of-a-kind Westinghouse AP 1000 reactors. Union labor, which is being used at Vogtle but not at extremely anti-union SCANA’s Summer reactors, probably accounts for a portion of the difference–but $4 billion worth? Hardly.

Watts Bar-2 is a somewhat different breed than Vogtle and Summer. It is not really a new reactor; indeed, along with Watts Bar-1 it received its initial construction permit in 1973. But because of numerous construction deficiencies, work was stopped on both reactors in 1985. Watts Bar-1 eventually was completed and began operation in 1996–the last U.S. reactor to begin operation. TVA decided to resume construction of Watts Bar-2 in 2007 and the NRC expects to issue a full-power license for the reactor in January 2015.

But TVA seems to be attempting to shirk NRC safety regulations that could drive up the reactor’s costs and further delay its schedule.

Specifically, according to a letter sent yesterday to NRC Chair Allison Macfarlane by attorney Diane Curran on behalf of the Southern Alliance for Clean Energy, TVA is attempting to put off making post-Fukushima seismic and flooding modifications until after the reactor has been licensed and is in operation. This is despite the fact that the NRC’s Fukushima Task Force report specifically singled out Watts Bar-2 as a reactor that must implement these modifications before operation: “For the two plants with reactivated construction permits (Watts Bar Unit 2 and Bellefonte Unit 1), the Task Force recommends that those operating license reviews and the licensing itself include all of the near-term actions and any of the recommended rule changes that have been completed at the time of licensing.”

But TVA recently told the Securities and Exchange Commission that it does not expect to finish its seismic and flooding studies until mid-2015. Actually implementing improvements would take much longer and drive up the cost of the reactor. Apparently TVA thinks it should be able to begin generating electricity and thus collecting money from ratepayers before making the improvements, which would make it seem, at least, that construction costs were within budget. Even though they wouldn’t be. In addition, if TVA were able to wait until after a license was issued, it would prevent a public hearing on its studies and implementation plans.

SACE is asking Macfarlane to ensure that the NRC will not issue a license for Watts Bar-2 until after the agency has received and reviewed the results of TVA’s seismic and flooding studies and TVA has amended its license application with those studies, thereby allowing a public adjudicatory hearing on the issue.

Anyone want to bet that any of these reactors will open on-time or on-budget? It’s not likely that even the Nuclear Energy Institute would take that bet at this point. It might even be a safer bet that not all of these reactors will ever be completed. Those prospects make it even more likely that the U.S. nuclear “renaissance” will both begin and end with these five reactors.

Michael Mariotte

June 24, 2014


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2 thoughts on “New U.S. reactors: overbudget, behind schedule, shirking safety regs

  1. paxus

    Reblogged this on your passport to complaining and commented:
    An excellent report on the persistent lies of the US nuclear industry. Every reactor under construction will be late, every reactor under construction will be over budget. And they have only just started lying about them. And Florida wants to build more.

  2. Peter Sipp

    Earth is the only planet capable of making life possible as we know it. To promote atomic energy as clean,safe,green and cheap is a stretch. We only have one planet to work with. It is not too late. Atomic energy looks very good on paper. It is dependent on tax dollars. It is not able to compete on its own. It simply costs too much to operate. No private insurance company will insure a reactor. At the end is the colossal waste problem that has no solution. Enough.


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