Nuclear power projects lose billions, with more needed to secure sites
COLUMBIA, S.C. — A decade ago, utilities were persuading politicians around the country to let them spend big to go nuclear.
Expanding nuclear energy capacity was a sure bet, they said: Natural gas prices were rising, energy needs skyrocketing, and the federal government was poised to cripple carbon-emitting fossil fuel plants. With a dozen or more nuclear power projects being developed around the nation, cost savings could be found through simultaneous construction.
State legislators were sold. In South Carolina, they even passed a law allowing utilities to charge customers up front and to recoup their investments even if the projects never produced a kilowatt. Several other Southern states also passed “pay-asyou-go” laws.
Last week, having spent more than $10 billion, executives with South Carolina Electric & Gas and Santee Cooper acknowledged all their assumptions were wrong.
Worse still: Consumers may have to pay billions more to secure the rusting remains of two partially built reactors at the V.C. Summer Nuclear Station north of Columbia.
“When we started, there was talk of a nuclear renaissance restarting a whole industry in the U.S.,” said Santee Cooper’s chief financial officer, Jeff Armfield. He was among several executives recommending the project be abandoned. The board of the state-owned utility unanimously agreed at a public meeting Monday.
Most of the 18 nuclear projects pending before the Nuclear Regulatory Commission a decade ago have been aborted or suspended indefinitely. None of the seven projects the NRC licensed are operational. Only one is still being built, in Georgia, at a cost of $100 million a month. Southern Company financial documents filed Wednesday say the project, slated to cost $14 billion, could cost $25 billion or more if completed. The projects in South Carolina and Georgia were already years behind schedule and billions over budget when their shared lead contractor, Westinghouse, declared bankruptcy in March to get out of fixedprice contracts aimed at controlling escalating costs. South Carolina executives say they were forced to give up after estimated costs, budgeted at $11 billion in 2008, soared beyond $20 billion.
“So much money has been wasted. That money could’ve been put in alternative energy and solar across our state, but it’s lost now and ratepayers are going to feel the brunt of this,” said Tom Clements, with Friends of the Earth. “The ratepayers are losers any way you look at it. Now we have to take a different tactic.”
Utility executives also promised that charging customers along the way would save hundreds of millions in interest fees, and any rate increases would be small and incremental. Instead, the project accounts for 18 percent of SCE&G’s residential electric bills and more than 8 percent of Santee Cooper’s. Neither company plans to refund that money, and SCE&G now wants permission to recover another $5 billion from its customers over 60 years.
Abandoning reactors 2 and 3 at V.C. Summer also could impact Duke Energy, which has spent $500 million on a potential nuclear expansion in Gaffney, S.C. — costs it said it has not passed on to customers through rate hikes. Duke Energy customers in Florida have already repaid the utility $870 million of the $1.1 billion it has spent on a proposed nuclear station there. The company hasn’t decided whether to proceed with either project, spokesman Ryan Mosier said.
One executive said nuclear energy won’t exist without federal help.
“If the federal government wants there to be a nuclear energy sector in this country, they need to step forward and make sure these projects are finished,” said Santee Cooper CEO Lonnie Carter. “If they don’t, we won’t have one. As time goes on, units will retire and we’ll have less and less nuclear energy.”
Currently, 99 nuclear reactors across 30 states produce about 20 percent of the nation’s power. The oldest began operating in 1970 in upstate New York and is licensed to continue through 2029.