Florida and Georgia residents should be asking "what's in it for us?" when it comes to proposed construction of new or expanded nuclear power plants in their states. According to a new study, they probably won't be happy with the answer—because what's in it for them is primarily higher costs and greater risks. And in both states, safer, more cost-efficient energy choices are available.
Prepared for UCS by Synpase Energy Economics, Inc., the report, "Big Risks, Better Alternatives," examines the the proposed Levy nuclear power plant near Gainesville and Ocala, Florida, and a proposed expansion of the Alvin W. Vogtle nuclear plant in Burke County, Georgia. The two projects are flawed in broadly similar ways.
The nuclear industry has a long history of cost overruns and construction delays: this reactor project in Flamanville, France, is already four years behind schedule and $3.7 billion over budget. Photo: Sarens Group.
Unproven technology, escalating costs
Both projects intend to use the Westinghouse AP1000 reactor, a new design approved by the NRC in December 2011, which has not been completed and brought on line anywhere in the world to date. Nuclear power construction has always been subject to major cost increases and regulatory delays; adding a new reactor technology to the process is unlikely to make it go more smoothly or cheaply.
Cost projections for the Levy plant have risen from $3.5 billion to $22.5 billion just in the five years since the initial estimate; Synapse's analysis finds that the cost will probably be between $22.5 billion and $29.3 billion.
In the case of the Vogtle expansion, the utility, Georgia Power, has not included cost and schedule data in the information it has made public—an omission that ought to make ratepayers nervous, given that the first two reactors built at the site exceeded their original cost projection by a whopping 1,200 percent.
Private profits, public risks
Costs per megawatt-hour (MWh) for the Levy nuclear power plant compared to other energy options.
All this uncertainty about cost and scheduling amounts to considerable financial risk—risk that will be borne primarily by the public, not the utility companies. In both Georgia and Florida, state law allows the utility companies to pass on construction and pre-construction costs for nuclear power plants to ratepayers, thus effectively providing the utility with an interest-free loan from its customers—a loan that need never be repaid, even if the project is never completed.
In the case of the Vogtle plant expansion, it's not only the utility's ratepayers that are bearing the financial burdens of the project. All U.S. taxpayers will be on the hook, thanks to billions of dollars in federal loan guarantees—necessary because nuclear power construction is far too risky to attract private financing—as well as hundreds of millions in federal tax production credits.