Adding two new nuclear reactors at Plant Vogtle is going to need some help from Congress and the federal government to work, according to Georgia Power’s request to continue. And it is in the national interest to subsidize new nuclear power the way the government is helping wind and solar power technologies, a nuclear engineer said.
Georgia Power and its partners made the request to the Georgia Public Service Commission last week to finish Reactors 3 and 4 at Vogtle, which would be the first new nuclear reactors to come on line in the U.S. in more than 30 years. Georgia Power said its capital cost to complete would be an additional $4.5 billion, raising it to $8.771 billion, with a total capital cost for all partners of $19 billion.
However, in a table buried deep in its filing, the company reports financing costs of just under $4 billion, which appears to raise its total cost to more than $12.1 billion. That does not include, however, a $1.7 billion anticipated payment from Toshiba, the parent company of original contractor Westinghouse, said Georgia Power spokesman Jacob Hawkins, which would make the company’s total cost $10.47 billion.
Georgia Power owns 45.7 percent of the project and is the only partner to publicly report its costs. If the other partners incur similar financing expenses, and Georgia Power has warned against using its numbers to calculate costs for the other partners, total costs for the project would approach $30 billion, according to an Augusta Chronicle analysis. That would not include $3.7 billion in promised Toshiba payments, Hawkins said, and any actual financing costs for the other partners could be very different than what Georgia Power is facing, he said.
Currently, the cost of the project is adding 5 percent to the bills of ratepayers and completing the project will boost that to 10.3 percent if each reactor is completed in the additional 29 months that the company is putting forth as its most reasonable timetable, according to the filing. Georgia Power President W. Paul Bowers said rates are currently 14 percent below the national average and would still be competitive and below the national average with the cost of completing the project.
In the filing, Georgia Power assumes that production tax credits for new nuclear power that are set to expire before the projected date for the reactors to come online in 2021 and 2022 will be extended. The company has also been in talks with the U.S. Department of Energy about new loan guarantees in addition to those that are already saving customers $375 million, according to the filing. Georgia Power has received $3.4 billion in guarantees and has applied to DOE for an additional $1.7 billion, Hawkins said.
The U.S. House of Representatives in June passed an extension of the tax credits and it is pending in the U.S. Senate. U.S. Sen. Johnny Isakson, R-Ga., is “committed to doing whatever he can to ensure that the Plant Vogtle project stays on track for completion, and he will continue working with Senate leadership on a path forward to get the nuclear production tax credit extension passed this year,” spokeswoman Amanda Maddox said.
Those credits and loan guarantees, as well as nearly $3.7 billion in payments from Toshiba set to begin next month, are part of the risk assumptions that Georgia Power made in deciding to go forward.
“If any of these assumptions are not realized, the economics may not warrant going forward with the Project,” the company said in the filing.
But the country does have an interest in making sure the project, the only one still underway in the U.S., is viable and able to deliver new first-of-a-kind “evolutionary” nuclear technology, said Dr. Travis Knight, director of the nuclear engineering program in the College of Engineering and Computing at the University of South Carolina. Nuclear provides about 75 percent of the country’s electric generation that does not create greenhouse gases and is an important part of reducing those emissions in the future, he said.
“You want some diversity in your energy generation so keeping nuclear power going is essential,” Knight said. “Clearly, there is a strategic interest in things like grid reliability and diversity of power sources. Without a doubt there is a strategic interest in that. If it were totally driven by market forces and plants were forced to shut down and everything went to natural gas and what you could derive from solar and wind, that would put us in a very vulnerable position.”
One has only to look at south Texas, where two nuclear reactors 90 miles southeast of Houston are still operating despite widespread devastation from Hurricane Harvey, he said, while the nearby petroleum and gas refineries are heavily disrupted. Moreover, while natural gas is very cheap at the moment, that might not be the case in the future, Knight said.
“I don’t think anyone reasonably expects (prices) to stay so low for so long,” he said. Long-term operations are also much cheaper in nuclear power than natural gas or coal – with nuclear, the fuel cost is about 5 percent of the cost of generation versus about 90 percent for natural gas and around 75 percent for coal, Knight said.
“That makes it very volatile and those are pass-through costs that are borne by the ratepayer, the customer,” he said. In fact, once the reactors come online, “customers begin to see fuel savings immediately,” Hawkins said. According to one analysis the company included in the filing, it would actually save $585 billion to complete the project versus abandoning it and building a gas-fired generating plant instead, and that is before applying an additional savings from loan guarantees or tax credits.
The U.S. government already heavily subsidizes wind and solar technology and “I think you could make a stronger case for nuclear” because it is always available and reliable, Knight said. Only about one in five in the USC program go to work for a utility but others go into related fields, such as nuclear safeguards and national nuclear security, he said.
“If we shut every plant down today, the United State still has a strong interest in nuclear technologies,” Knight said. “And we need to maintain a strong workforce, a strong technological basis and a strong position in the world. I don’t think we want the greatest nuclear experts to be in China or North Korea or Iran or Russia or any of those other places. We have a leadership role to play. Therefore, it only makes sense that the government take some responsibility in ensuring that is the case.”
Reach Tom Corwin at (706) 823-3213 or email@example.com