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Nuclear Renaissance – Dead on Arrival

Recent news about nuclear power plants in our region should be enough to show that the industry’s alleged renaissance is in trouble.  Never seen before breakdowns and off the charts construction costs should cause NC regulators to scrutinize and question any further nuclear energy plans.

Crystal River – This existing Progress Energy nuke on Florida’s west coast has been shut down since 2009 and is expected to remain off line until at least 2014 – why – because the attempted replacement of the steam generator resulted in three separations of a building wall – each the size of a basketball court!  This problem has never been seen before at a reactor.  Repairs and replacement power [1] are estimated at $2.5 Billion – and it’s not clear who will pay – but Progress’ insurer stopped paying claims in 2011.  The impact on the Duke-Progress merger could be significant if Progress brings such a liability to the table.

Plant Vogtle – A report [2] released this week by Georgia Power shows that two under-construction reactors in eastern Georgia near the SC border, are in deep trouble.  Design flaws and the corrective action required to address them have already resulted in an eight-month construction delay.  And Georgia Power is claiming trade secrets on virtually all cost information except an old estimate of $14 Billion for the two reactors.

Check out this page from the report:

… (Page 10) The original certified budget included a forecast for REDACTED based on REDACTED annual escalation. To date, REDACTED rates have experienced a REDACTED annual escalation rate.  Combining the REDACTED to date with a forecast for future REDACTED rates based on July 2010 actual values escalated at REDACTED, the Project forecasts REDACTED.

Yet, the company awaits an $8.33 Billion loan guarantee from the US Department of Energy to build Vogtle #3 and 4 – in other words since Wall Street investors consider nukes a risky investment, the federal government will assume the debt if the borrower defaults. But the cost information is a trade secret!

VC Summer – located near Columbia, South Carolina Summer is owned by SC Electric and Gas, Santee Cooper and the electric cooperative SCANA. There is one existing reactor and two more are under construction.  Extra costs and construction delays are mounting for #2 and 3 because of “unanticipated rock conditions” for the foundation, design modifications and delays in receiving plant components.  Current cost estimates are $380 Million. Meanwhile, Duke Energy Carolinas has an option to purchase up to 10% of the plant and Progress Energy is also in negotiations over buying a share of the plant.

One final note – both Vogtle and Summer are likely to suffer further cost escalations and delays because there will be changes required by the NRC as a result of the Fukushima tragedy in Japan as well as experimental nature of the Westinghouse reactor design.