“Georgia Power’s Plant Vogtle is seen as the first example in the country’s ‘Nuclear Renaissance’. The technology indeed employs new simpler, safer, and more efficient designs than the last round of nuclear plants. However, there is nothing new about the crony politics and financial shenanigans surrounding the project.”
Georgia Power, a subsidiary of the mighty Southern Company, is pressing ahead with development of a two-unit, 2,240 Megawatt (MW) nuclear plant, Plant Vogtle. With a pending $8.6 billion federal loan guarantee, a cap on liability, production tax credits and pre-collection of profits this makes Georgia Power the nation’s biggest welfare queen.
And the predictable bad news is already coming in. Recent news reports state that Vogtle may be nearly $1 billion above budget. Bad for electricity users and taxpayers; good for utility stockholders given that the extra rate base receives a guaranteed rate of return.
All these financial goodies didn’t come from performance in the marketplace but from well-planned lobbying at the state and federal levels. Tracing the actions and rationalizations that went into getting this project off the ground and into construction is illustrative, although disheartening.
The last phase of nuclear plant construction back in the 1980s demonstrated gross incompetence and mismanagement by the utility. Changing regulations got the blame. The unlearned lesson is that more risk must be born by the utility. But just the reverse has occurred with risk shifting to ratepayers and to taxpayers.
The Southern Company strategy is to go long on power and sell to other regions of the country. Southern uses its unregulated generating subsidiary, Southern Power, to build low-risk natural gas plants; but uses its regulated companies to build high-risk plants. The South, with its tradition of re-electing politicians long after they have become too rotten to be trusted, is an excellent place to invest large amounts of capital under regulation with virtually guaranteed returns.
Rationalizing the Uneconomic
Georgia Power went through the motions of evaluating alternative sources of generation and, by assuming high natural gas prices and high carbon emission penalties, found the high capital cost nuclear option best. The conclusion that high capital costs are a good tradeoff for low operating costs is always suspicious when under regulation returns are earned on capital but operating cost are passed through with no mark-up.
Georgia Power received regulatory approval to build the nuclear plant that included being allowed to collect financing cost on construction costs as the project progresses. In the regulatory world, financing costs include not just interest on loans but a return on equity for the portion of stockholder money used. Regulated utilities usually have a capital structure of about 50% debt and 50% equity. Financing cost is then a blend of these two “costs.” For example if debt is 4.5% and equity is 13%, then the financing cost is 8.75%.
After getting approval from state utility regulators, Georgia Power sought state legislation to make the financing scheme law. The proposal had widespread popular opposition and Georgia Power expended a lot of its accumulated political capital. The year 2009 was an off year for elections in the General Assembly so the Company and the politicians correctly assumed the public would forget the issues by the next election.
The pre-collection of construction financing was estimated to be $1.6, plus tax gross up. Of that, about $1 billion in profits will be collected before the nuclear units are active. Widely touted in lobbying before the regulatory and legislative bodies was the purported savings to ratepayers of $300 million in financing savings. This figure assumes no discount rate and ignores taxes. Consumers faced with paying credit card bills are supposed to be neutral about paying now or paying over the sixty-year life of the nuclear plant scheduled to begin operating in 2016.
Big Costs Institutionalized
The cost estimate used in seeking approval for the project was $14.5 billion. Not long after all the approvals were made, Stan Wise, a Georgia Public Service Commissioner, spoke before a meeting of southeastern regulators in Charleston, SC, declaring he did not expect the approved estimate to be the final number. This echoes the problems of the last round of nuclear plant construction thirty years ago.
During that period, Georgia Power continued to announce new higher cost estimates but always said that by only considering the incremental additional cost and ignoring the sunk costs, the project was worthwhile. While that line of reasoning is true. The notorious gaming of the regulatory system by Georgia Power and the Georgia Commission makes it plausible that the initial estimate was deliberately low-balled to get approval and the true additional cost is being slowly revealed after considerable cost has already been sunk.
Georgia Power has asserted, and has regulatory and legislative support for, the right to collect any sunk cost, with profit, if the project is ever canceled for any reason. The regulatory strategists in Georgia Power have learned the lessons of the last round of nuclear plant building very well indeed.
Cost overruns in projects out in the non-regulated sector of the economy are disasters for the management of the competitive companies. In the regulated world cost overruns lead to Champagne corks popping on Wall Street and utility executives being hailed within the industry as visionary leaders. The more a project under regulation costs the greater the profit for the utility.
Nuclear Renaissance?
Georgia Power’s Plant Vogtle is seen as the first example in the country’s “Nuclear Renaissance.” The technology indeed employs new simpler, safer, and more efficient designs than the last round of nuclear plants. However, there is nothing new about the crony politics and financial shenanigans surrounding the project.
While being a technical advance in a new energy era, Plant Vogtle is already becoming Exhibit A of why nuclear is a bad deal for everyone except the rent-seeking utility in search of rate base and rate-of-return guarantees. In a new era of abundant fossil fuels, the opportunity cost of this plant and nuclear has never been lower.
Note: For further documentation on Plant Vogtle, see Robert Peltier, Obama’s Southern Company Play: How Much Nuclear Plant for $14.5 Billion, 80% Federally Guaranteed? March 4, 2010.
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Jim Clarkson, president of Resource Supply Management, an energy procurement and management firm based in Sumpter, South Carolina, is a director of the Institute for Energy Research and IER’s advocacy arm, the American Energy Alliance.
You nailed it!!!
Hmmm. Provocative post. I’d like to know more–and in wider context. There is much to admire here, not least snippets like this: “The South, with its tradition of re-electing politicians long after they have become too rotten to be trusted, is an excellent place to invest large amounts of capital under regulation with virtually guaranteed returns.” This is a sentence worthy of Walker Percy, if not Faulkner.
On the other hand, electricity regulation/deregulation seems a tangled affair. Deregulation, such as it is, has not reduced consumer costs or, in my view, improved either adequacy/quality of supply or quality of transmission. Gaming the system via crony capitalism was refined by Enron and is now de rigueur throughout the land, if not the entire free world. Alas.
And then there’s the problematic hyperbole: If plant Vogtle makes “Georgia Power the nation’s biggest welfare queen,” what does that make GE’s Shepherd Flat Wind project, since the latter is required to do no functional work as its installed 845MW has no effective capacity and none of its vast subsidies, including federal loan guarantees of over a billion dollars, are not indexed to any of the public policy goals claimed for it.
By contrast, the Vogtle nuclear plant will yield high capacity, likely with a 95%+ capacity factor, providing 2200MW on demand 24/7. It should work hard–and well–for the money….
Could its installation have been better managed and cost contained?No doubt. Could much cheaper fossil-fueled generation have accomplished the same goals. Surely they could have (though shale gas and its effect on pricing wasn’t known when Vogtgle was planned). But if the policy goal was to achieve low emissions while improving reliability and security of supply–and at the same time demonstrating a prototype for next generation nuclear power, then perhaps Vogtle can be seen in a kinder, gentler light.
I engineered a score of nukes and two score fossil plants. In a 1991 survey of engineering colleges, 69 had dropped course work vital to engineering power plants. Their graduates could not find work. The largest population of PhD candidates in nuclear physics, in US universities, today, was born in China. Most of our advanced degreed engineers were born in Asia. China is accomplishing things in this technology that the US never did. Yet we invented it. The US has not built a nuke in over 35 years. Tens, or hundreds, of thousands of the best technical people this nation ever produced, were thrown out of work. I knew many.
We can be certain that there were some NRC regulators hired to review the license for a new nuke who worked an entire career, retired and died, without one new plant coming on line. We can be certain that no one engineering this new, improved, lemon scented, and improved design has ever made one work. And we can be certain that if the US government offered to give $8.5 Bn to anyone to engineer a power plant run by wound up rubber bands, some huge corporation would have a rubber band department this afternoon, fully staffed with Vice Presidents, and Directors, all lawyers and MBAs. No engineer could, or would join.
President Eisenhower summarized our extant political problem: Either we use this technology for peaceful purposes or it will annihilate us (by us, he meant mankind). This warrior invented atoms for peace. Carter screwed up the economic basics by outlawing (w/o any legislation) the reprocessing of the spent fuel (in which the container is spent, but ~ 95% of the energy remains). This whiz bang had a few months of nuclear engineering experience upon which to base his decision. The only new development is that Iran may, or may not, have the capability to power a city, or evaporate it. What would you pay via your light bill to have fission toast your bread, but not your family?
In the year following the great Japanese quake, their east coast was moved as much as 180 feet, 30,000 people were killed, 800,000 are without a livelihood, the debris has reached our shores, while some 25,000 Americans have been killed by a drunk driver. But no one, anywhere, has died from radiation due to the 1964 nuke design. It was developed with slide rules.
Until power-mad politicians, useless regulators, and greedy financial types are ignored, and engineers are allowed to create, build and run any energy technology, we can be certain that this complex, risky, and life supporting industry will continue to rot. Until America goes out of business.
Mr. Hails:
Nuclear power cannot compete against natural gas prices of old, much less today’s gas prices. Getting politics out of energy will cut nuclear down to its free-market size. Nuclear’s time might be in the next century as it is a backstop technology that awaits competitiveness in the U.S.
“No engineer could, or would, join [a government funded bound rubber band electricity generation plant].” Would that this were true, Mr. Hails. Given what I’ve seen, engineers would join with economists in a New York minute, putting grand make work on display with their shoulders to the wheel of making the public think their project had great worth, perhaps even of the save the world variety. And, hey, they would also make the argument that bound rubber band generation was creating jobs and adding local value.
Such a project would have the additional benefit of adding capacity to any system, as unproductive as it would be. In this, rubber bands would do more than wind technology.
On the other hand, what you state about “power-mad politicians, useless regulators, and greedy financial types” is spot on.
rbradley:
A few concepts in response to your thoughtful comment.
It is estimated that some 95 % of the cost of a nuke is based on regulations. I quote an NRC official to me when I raised cost as an objection to his dictate, ” Mr. Hails, I will add $ 1 bn to your cost to make the design 1 % safer. Cost is your problem, not mine.” No American ever knew the cost of a new nuke; this was, and is, our basic problem. The ground rules are ever changing and vaporous, one regulator can easily add a fortune to the cost. There are now libraries of regulations which never have been put to the test, cost effectively control the design, construction and operation of a facility spanning decades. This is, and has been true since the first nuke. It split the AEC into the NRC and DOE, but failed to resolve the cost issue. With no real policy on reprocessing, or even storage, there can be no life cycle, “All in” cost determination.
You are correct, natural gas, NG, now is cheap, circa $2 / MBTU; a few years ago it cost $14/ MBTU. But we know that NG will never melt a city.
In choosing between technologies, you must define competitive. If the US is conquered, militarily, or commercially, by a technologically superior nation, are we competitive? Eisenhower’s conundrum remains unanswered. I do not think we have your century to find the answer to this dual use technology.
Mr. Hails: The market rejects nuclear too on a safety basis or else the Price-Anderson Act would not be necessary then or now, right?
“Regulation” is mostly ‘safety costs’, right? The price of an automobile is a lot of things other than the motor to provide comfort and safety, but that is not regulation necessarity.
Only the market can decide what is safe and what is economical, and nuclear does not appear to be either.
Mr. Bradley adds wisdom; all power, including nuclear power, must be market driven.
There are recent news reports that electricity, particularly in the middle Atlantic states, will shortly spike upward, primarily due to the closure of coal fire power plants.
Without changing one comma of law or regulation, we should prune the EPA, NRC, and DOE, and cut their budgets 10% per year compounded. Wholesale costs for electricity and gasoline would drop significantly.
We could achieve this in three years, but the housing market in the ritzy DC suburbs would collapse.
Bradley is spot on concerning Price-Anderson, but that would require bull dozing the Capital Building. Let us hold this for another article.
Few people remember events 50 years ago or longer when utilities stored 90 days supply of coal on site in huge coal piles. This was done so they could ride out a strike by the United Mine Workers who did strike frequently. John L. Lewis called out a strike during WWII when coal was our biggest source of energy.
Natural gas, and wind and solar, can not have their energy sources stored on the plant site. However, nuclear and coal can store their fuels sourcs on site and keep continuous operation in spite of natural disasters or man-made disruptions. I think Hurricane Katrina in 2005 caused some disruption of natural gas supplies.
In believe Georgia Power Company and Southern Company want a three-source energy supply for electric power generation–nuclear, coal, and natural gas. They may lose coal do to EPA edicts which is beyound their control. If this happens, people may rejoice that Southern Company decided to build two more nuclear power units.
Once the two new Vogtle units are operating, Georgia will have 6000 MW of nuclear generation for a state populated with 11 million people. If coal and gas were cut off, I think the state could still be in business. Thermostats in the winter may have to be 62 degrees and 76 degrees in the summer. But all home would operate and businesses could remain open with the exception of businesses that are big energy users.
A lot of people don’t look at this feature; but nuclear power provides a means of extending our vast fossil fuel reserves even further into the future. One of the new Vogtle 1100 MW plants will save the consumption of 230 million tons of coal or 5 trillion cubic feet of natural gas over its 60 year lifetime. This is about 23 percent of our annual consumption of either fuel. So our 100 plus nuclear plants are adding about 23 additional years to the lifetime of either coal or natural gas.
I am not an economist. It does make sense if you have only one source of fuel, you are better able to control the price of that fuel if you have no competition. The present decrease in natural gas prices have caused the price of coal to decrease. The presence of many nuclear power plants can help lower the price of coal and natural gas.
Heaven help the country for the plans of the EPA and Washington administration have for our future. It most likely means substantial curtailment of the use of fossil fuels. The replacements of solar and wind will be very expensive. If these events take place, Southern Company may be portrayed as geniuses in the future.
Some may complain the government provides insurance for nuclear power plant accidents through the Price-Anderson Act. Utilities pay a premium for this insurance and to my memory no claim has ever been made over its 50-year history. Utilities also pay $0.001 for every kilowatt-hour of nuclear electricity generated since 1983 to pay for the storage of nuclear waste. This fund surely is over $20 billion and the government has not solved the problem.
I believe Georgia Power is paying a fee for the $8 billion dollar federal loan guarentee that enables it to borrow money at a low interest rate. I have never seen the amount of the fee published. I thought I read in the paper last year the government wanted a fee of $800 million for an $8 billion loan guarentee for a Calvert Cliffs project. The utility decided to abandon plans to build new nuclear plants.
I have lived in Atlanta, GA for 45 years. Georgia Power Company has continually been demonized by our local print medial. Over this period of time my electricity charges have always been at least ten percent below the national average. In addition, the reliability of electric service is spectacular. We frequently have ice storms that may place as many as one million customers without service and usually, as a miracle, service is restored in a few days.
James H. Rust, Professor of nuclear engineering(ret.)
Nuclear technology certainly sounds great, so it should be able to attract capital without so many government subsidies. My summary of the politics is to show how rotten the process is. Just because I oppose cronyism does not mean I oppose sensible electricity production. No nuclear plant on the planet has been built under market conditions.
Jim Clarkson
If you goggle Price Anderson Act the first reference is a Wikipedia description of the history and financing of the liability insurance provided nuclear power plants. The Act also covers U. S. government facilities. Over the history of the Act (1957-present) claims of $170 million have been paid–$71 million due to the Three Mile Island accident.
All nuclear utilities as a group are responsible for paying the first $12 billion in claims for an accident and if claims exceed that amount, claims will be paid and utilities and the U. S. government will develop a plan to finance these claims.
It is easy for citizens to demand coverage be available for them for unforseen accidents. The Deepwater Horizen oil spill, April 2010, is the latest accident of large financial consequences. About August after the accident, Congress was considering a bill to require any oil company to have insurance to cover a future accident of that magnitude–something like $20 billion. I am not sure if you can find an insurance company that sells a $20 billion policy. What would be the annual premium? BP was able to handle this accident and has spent something like $20 billion out of corporate profits to pay all claims of losses. There is probably only BP, Exxon, Shell, and Chevron that are wealthy enough to handle such liability claims. If this act had been passed by Congress, only these four companies could have done off-shore drilling. Many jobs would have been lost.
Let us examine another situation in this country. We have issued about 220 million drivers licenses and have about 230 million vehicles owned by those who possess these drivers licenses.
The worst accident for a car is to hit a loaded school bus, explode and kill 50 children. The cost could be $250 million. Does anyone carry that amount of liability insurance on their cars? Is such insurance available? Probably not.
I suspect a significant number of car owners carry $25,000 property damage and $100,000 liability coverage on their cars and maybe none at all. I carry $100,000 property damage and $2 million liability on my cars. Anyone who raises questions about Price Anderson should carry at least this coverage on their cars or be labeled a hypocrite.
James H. Rust
Jclarkson’s comments sound reasonable… on the surface. In the first place his claim that “No nuclear plant on the planet has been built under market conditions.” is patently false. It is probably true that no currently operating nuclear plant was built using only private funding. But to understand why one has to look to history. In the early years of commercial nuclear power, the reactor plant vendors actually sold fixed price turnkey plants.
The utility company actually contracted with the vendor (Westinghouse, Combustion Engineering, etc.) to have a plant built for a firm price. Bechtel, Babcock & Wilcox, etc. were contracted by the vendor to actually build the plant (again, at fixed cost). When the plant was completed, the vendor started up the plant, tested all of the systems, and put the plant on the power grid while also training the utility’s operating personnel.
Several things changed that. One of the first was when it was discovered that any citizen with a $5 bill (maybe it required a 20) could go to the local courthouse and file an injunction that would stop construction. Suddenly the vendor and constructor were faced with unplanned for accumulating interest expenses, idle work and support force, and an idle infrastructure of equipment and scheduled deliveries. A good example of that last is having to stop receiving concrete while pouring.
Next came the regulatory changes. After the design was approved and construction started, the regulators would add new requirements. Sometimes these requirements actually necessitated significant changes in the building structure of major facilities. In virtually all cases the changes required significant engineering procurement expenses.
While I doubt that anyone that is reasonably knowledgeable about nuclear power would try to argue that a great many (most?) of these changes imposed upon the reactor vendor represented significant improvements in overall plant safety (such as the redundant safety instrumentation requirement following the Browns Ferry fire), it is ludicrous to expect the vendor to honor (or offer) a fixed price contract when faced with a very real likelihood that the vendors costs could escalate by significant percentages. Often because some local (or not local) attorney can keep coming up with new and creative reasons for filing and injunction every week or so. Even though the injunctions were always overturned, the cost to the vendor (and eventually the utilities) was staggering.
Changes imposed by the AEC, ERDA and then the NRC (Nuclear Regulatory Commission) have cost many billions of dollars.
Every U.S. nuclear power plant supports a veritable fleet of oversight and regulator personnel as well as their own “fleet” of personnel to deal with the oversight and regulatory personnel.
The parking lot for the original (post construction) San Onofre Unit 1 would hold about a dozen cars. That lot was not big enough to allow all of the “fire watch” personnel for San Onofre Unit 3 from just 1 of the four shifts to stand in all at the same time! Technically it would still only require a couple of dozen personnel per shift to operate a modern nuclear power plant but the utilities have more people than that just to file the environmental reports.
The mortality (0) and even injury rate for nuclear power in the U.S. is lower than the rate for any other commercial scale power production.
Most people do not know that every coal and oil fired power plant in the U.S. would be shutdown if they were regulated by the NRC. Coal, oil, and even some gas fired plant all release more radioactive material into the environment than is allowed for a nuclear power plant! I believe that geothermal is even worse than coal in that regard.
Few people will believe this but Fukushima Daiichi is yet another example of why U.S. nuclear power must be an important part of our energy future. You see, that while the media was quick to point out the the Fukushima Daiichi reactors were U.S. designed boiling water reactors they completely ignored mentioning that the U.S. does not have any spent fuel pools designed like theirs. The contamination spread was from the (in my opinion, rather poorly designed) spent fuel pool systems… not the reactors.
The nuclear power industry itself created (and funded) INPO (Institute for Nuclear Power Operations) following the TMI meltdown. This was a shining example of enlightened self-interest at work. The purpose of INPO was to research and improve nuclear power safety and operation. While not perfect, INPO has contributed enormously to both the safety and efficiency of nuclear power plants. INPO’s research has primarily been based upon scientific method. INPO has pretty much refused to allow “everyone knows” and “the experts all say,” etc. from deterring them from basing all of their recommendations on facts backed by scientific evidence (not “scientific” opinion). The results not only speak for themselves but many other industries and commercial activities are adopting INPO developed processes to improve their own organizations.
What I have just talked about in addition to other consideration is the reason that many serious environmentalists in recent years have declared support for nuclear power.
As a footnote to a much longer post than I expected to be making, no I don’t trust the utilities to always keep their long term self-interest at the forefront!
Jclarkson’s comments sound reasonable… on the surface. In the first place his claim that “No nuclear plant on the planet has been built under market conditions.” is patently false. It is probably true that no currently operating nuclear plant was built using only private funding. But to understand why one has to look to history. In the early years of commercial nuclear power, the reactor plant vendors actually sold fixed price turnkey plants.
The utility company actually contracted with the vendor (Westinghouse, Combustion Engineering, etc.) to have a plant built for a firm price. Bechtel, Babcock & Wilcox, etc. were contracted by the vendor to actually build the plant (again, at fixed cost). When the plant was completed, the vendor started up the plant, tested all of the systems, and put the plant on the power grid while also training the utility’s operating personnel.
Several things changed that. One of the first was when it was discovered that any citizen with a $5 bill (maybe it required a 20) could go to the local courthouse and file an injunction that would stop construction. Suddenly the vendor and constructor were faced with unplanned for accumulating interest expenses, idle work and support force, and an idle infrastructure of equipment and scheduled deliveries. A good example of that last is having to stop receiving concrete while pouring.
Next came the regulatory changes. After the design was approved and construction started, the regulators would add new requirements. Sometimes these requirements actually necessitated significant changes in the building structure of major facilities. In virtually all cases the changes required significant engineering procurement expenses.
While I doubt that anyone that is reasonably knowledgeable about nuclear power would try to argue that a great many (most?) of these changes imposed upon the reactor vendor represented significant improvements in overall plant safety (such as the redundant safety instrumentation requirement following the Browns Ferry fire), it is ludicrous to expect the vendor to honor (or offer) a fixed price contract when faced with a very real likelihood that the vendors costs could escalate by significant percentages. Often because some local (or not local) attorney can keep coming up with new and creative reasons for filing and injunction every week or so. Even though the injunctions were always overturned, the cost to the vendor (and eventually the utilities) was staggering.
Changes imposed by the AEC, ERDA and then the NRC (Nuclear Regulatory Commission) have cost many billions of dollars.
Every U.S. nuclear power plant supports a veritable fleet of oversight and regulator personnel as well as their own “fleet” of personnel to deal with the oversight and regulatory personnel.
The parking lot for the original (post construction) San Onofre Unit 1 would hold about a dozen cars. That lot was not big enough to allow all of the “fire watch” personnel for San Onofre Unit 3 from just 1 of the four shifts to stand in all at the same time! Technically it would still only require a couple of dozen personnel per shift to operate a modern nuclear power plant but the utilities have more people than that just to file the environmental reports.
The mortality (0) and even injury rate for nuclear power in the U.S. is lower than the rate for any other commercial scale power production.
Most people do not know that every coal and oil fired power plant in the U.S. would be shutdown if they were regulated by the NRC. Coal, oil, and even some gas fired plant all release more radioactive material into the environment than is allowed for a nuclear power plant! I believe that geothermal is even worse than coal in that regard.
Few people will believe this but Fukushima Daiichi is yet another example of why U.S. nuclear power must be an important part of our energy future. You see, that while the media was quick to point out the the Fukushima Daiichi reactors were U.S. designed boiling water reactors they completely ignored mentioning that the U.S. does not have any spent fuel pools designed like theirs. The contamination spread was from the (in my opinion, rather poorly designed) spent fuel pool systems… not the reactors.
The nuclear power industry itself created (and funded) INPO (Institute for Nuclear Power Operations) following the TMI meltdown. This was a shining example of enlightened self-interest at work. The purpose of INPO was to research and improve nuclear power safety and operation. While not perfect, INPO has contributed enormously to both the safety and efficiency of nuclear power plants. INPO’s research has primarily been based upon scientific method. INPO has pretty much refused to allow “everyone knows” and “the experts all say,” etc. from deterring them from basing all of their recommendations on facts backed by scientific evidence (not “scientific” opinion). The results not only speak for themselves but many other industries and commercial activities are adopting INPO developed processes to improve their own organizations.
What I have just talked about in addition to other consideration is the reason that many serious environmentalists in recent years have declared support for nuclear power.
As a footnote to a much longer post than I expected to be making, no I don’t trust the utilities to always keep their long term self-interest at the forefront!
[…] http://www.masterresource.org/2012/05/politics-and-vogtle-boondoggle/#more-20090 […]
I do not know if this applies to all US NPPs but when the plant I worked at (now retired) was placed on the NRC “Watch List” one of the things the NRC inspectors forced us to do, deeming it “Safety Significant” was to determine a schedule for, and replace ALL electrolytic capacitors in “Safety Related” equipment. It seems that they had discovered that the typical electrolytic capacitor has a “shelf life” of as short as three months to as long as 3 years. (When an electrolytic capacitor is not occasionally used or subject to working voltage the caustic paste inside them will cause the thin oxide to deteriorate to the point that it will no longer handle rated voltage and short out.) We could not convince the NRC Inspector that this was a condition that only occurred “on the shelf,” unused, etc. and an analysis of the probability while operating would have cost millions. So we relented, and setup a replacement schedule. Keep in mind that replacing these capacitors also meant a complete recalibration of the affected equipment. This program added at least a million dollars to the maintenance costs of the plant, but at least it was spread out over the rest of the life of the plant and not a massive one time hit. Questions: Does this really make the plant safer? NO, NO a thousand times no. Who pays for this stupid idea? You do. Do you think the FAA has forced the airlines to do something that stupid? NO. In fact, along that line. do you remember the plane that had the turbine blade cut through the hydraulic oil line and they lost all hydraulic oil and crash-landed in Suix City IA, in 1989? Well if they had an “excess flow check valve” on each of their redundant hydraulic systems, like all nuclear related safety systems that could cause a similar condition, that plane could have made a normal landing. In recent discussions with an aircraft mechanic, commercial airlines still do not have this $500 modification. Feel safer about flying? If the FAA forced all safety systems that would make an airplane as safe as a NPP the airplane could not get off of the ground. (Probably couldn’t get off of the ground with 10 percent of the most important ones.)
And you wonder why a NPP costs so much to build/operate.
The intent of the original posting was to criticize the political process surrounding the approval and financing of the next nuclear plant. The argument was not necessarily anti-nuclear. Nonetheless, the more thoughtful responses have cited the merits of nuclear power as if that answers the charges of political manipulation overriding market forces.
Nuclear power is clean, but does that excuse the dirty politics used to obtain financing?
Nuclear power has high availability, so is it ok to have cost overruns and shift financial risk to consumers?
Nuclear power adds balance to Georgia Power’s mix of generation, does that make it right to collect profits before the plant is built?
Nuclear construction is expensive; then must the government set liability limits to attract capital?
Government has been so involved in nuclear generation from its very inception that we have no idea if it can survive under normal business conditions. All nuclear projects have been either government owned or backstopped by various sorts of government supports and mandates. Assertions to the contrary are mistaken, perhaps even patently mistaken.
Nuclear power has high availability, so is it ok to have cost overruns and shift financial risk to consumers?
Did you read any of the comments? Why are there overruns? One major reason is that it takes little money to significantly delay a nuclear power plant and the interveners do it with little if any impunity. Their only aim is to drive up the cost. They also know that the longer they delay the plant the more changes the NRC will mandate and the longer the plant will be delayed and the more delays they can initiate, ad infinitum. They have had 50 years practice doing this. The utilities have learned it is cheaper to do what the interveners want that prove to them their concerns have no merit. And the interveners benefactors have large pockets – they do not want nuclear power (you can decide for yourself why they want to spend money this way.)
Nuclear power adds balance to Georgia Power’s mix of generation, does that make it right to collect profits before the plant is built?
How many people do you know that save up and pay cash to buy a house? Can you afford to obtain a construction loan (in advance of getting the plans, permits, and site ok) that has an option that requires you to borrow money from a separate line of credit (with a much higher interest rate) to make any payments until you have moved into the new house? Keep in mind that this entire process will take about ten years and that any expenses in any way related to that new house even a visit to determine the status must be charged to this line of credit. The interest charges alone will double the cost of that new house. Have you ever witnessed a PUC prudency hearing? I have had to redo expense reports simply because a trip I made to a site with a plant under construction. Because I attend a one hour meeting on the plant under construction the manager felt that the PUC might feel that we were trying to game the system by charging my lodging and meals to the operating plant (where I attend three meetings over two days.) I had to change the billing codes so that lodging and all expenses on the second day were charged to the plant under construction. This meant that those charges got placed in the account that did not get paid until the plant was declared operational. As a result, four years later my $50 motel bill and $5 dinner cost the rate payers, due to interest, over $100. The utility is NOT making any PROFIT off of paying Construction-in-progress they are, in actuality, keeping the rate payers total debt smaller. The only people losing money are the banks. If you can’t see this take an accounting course. Worse yet, the delays caused by the above intervener actions only make the unpaid bills higher.
I strongly suggest you look at the alternatives in a truly scientific fashion. How many acres of land would be needed to produce 20% of the US energy needs with Solar? With Wind? Forget about efficiency improvements in homes, any electricity saved will be used up by charging up useless, inefficient electric cars. Back of the envelop calculations yield estimates along the line that you would not be able to take a drive on any highway in the country without seeing a windmill. (Assuming most state and federal parks do not have anything beyond unobtrusive solar panels.) How much is food going to cost if we continue the present rate of increased use of soy and corn conversion into fuel? They are even making plastic bags out of it now.
Every penny that the govt. has collected from the utility companies in fees to insure against accidents was promptly spent on other things and the so called fund is nothing but a bunch of IOUs like our social security Ponzi scheme.
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