Plant Vogtle’s Delays Jeopardizing Project’s Benefits

December 18, 2012 11:09 am

by Charlie · 18 comments

Plant Vogtle is now estimated to be about a year behind schedule.  As reported by the AJC’s Kristi Swartz, delays add to the costs of the project, which negates the positive economic benefits the plant was originally projected to produce.

Regulatory issues, commercial disputes and heightened scrutiny of the $14 billion Plant Vogtle project may push the reactors’ operational dates as much as a year behind schedule. The longer it takes to build the reactors, the more financing and capital costs customers have to pay, diminishing long term economic benefits, the report said.

“Staff has warned on numerous occasions that the benefits will be eroded if delays occur, which is now the case,” wrote Philip Hayet, a consultant hired by the Public Service Commission’s advocacy staff to review Georgia Power’s economic analysis of Plant Vogtle.

The utility’s share of the project is $6.1 billion, and customers already are paying financing costs in their monthly bills.

Now is also a good time to remind our readers that “those financing and capital costs that customers have to pay” currently is limited to only residential and small business customers.  Those with lobbyists also known as “large commercial users” were exempted from the rate hikes that have already begun to pay for this plant’s costs as well as a front loaded billion dollar profit for GA Power Shareholders.  Their returns are locked in.  The benefits to the rest of us….not so much.

Dave Bearse December 18, 2012 at 9:34 pm

Does anyone know if us small fry will continue to pre-pay for the reactors up to the time they’re in service while big users continue their free ride, or is the pre-pay amount capped?

Mr. Eaton?

I’d like to see legislation enacted this session that requires big users pre-pay just like everyone else, especially since as manufacturer’s they’re no longer paying taxes on energy. Big users have the capability to stoke a big fire under the reactor consortium’s arse.

IndyInjun December 18, 2012 at 10:06 pm

Tim Echols made a big issue over the prefunding of Vogtle Units 3 and 4.

He quickly rolled over.

The bill guaranteed Southern an 11.5% return on those two new units, virtually guaranteeing US that there would be massive cost shifts and excessive overhead allocations from Units 1 and 2, plus other Southern Operations to Units 3 and 4. A whole army of auditors would be needed to prevent this.

I figure this will run into the $hundreds of millions before the units are completed.

Most have forgotten it, but at the conclusion of Units 1 and 2, the IRS invaded Southern’s Atlanta office over an alleged spare parts accounting fraud. Southern paid over $20 million without admitting guilt.

The Georgia PSC and legislature are no friends of middle class Georgians.

Harry December 18, 2012 at 10:27 pm

Indy, thanks for your insight and comments. Nobody is a bigger proponent of nuclear power than I, however the PSC should require absolute accountability from Southern Company and from a near adversarial role. Will this be the case? It’s hard to believe when we see that the PSC staff has been throttled.

IndyInjun December 18, 2012 at 10:39 pm

I support the new units too, but we paid WAYYYYYYYY TOO MUCH!

Harry December 18, 2012 at 10:49 pm

Part of the problem is that the Department of Energy really doesn’t want nuke facilities, and will work behind the scenes to delay and raise construction costs. I’m convinced they overlook mistakes just so they can “find” them later.

waldo December 18, 2012 at 11:37 pm

To hear them tell it in the committee room, it was the NRC that caught it, which seemed like getting caught with your pants down. None of the checks built into the system on site caught the issue. This project has been delayed for 12 months because of rebarb, 8 months of paperwork issues, and the inability of shaw to make material precice enough for nuclear activity.

There is no schedule for delivery or coordinated construction calendar. The rebarb matter still has not been resolved and they can’t pour the concrete until all the rebarb is in place.

I don’t know what they have to do to get the water permit, but that’s going to be a lot of water detoured from the farmlands.

I’m not familiar with the actions of Department of Energy, but I’m pretty sure Obama is pro-nuclear when it comes to our energy supplies.

IndyInjun December 19, 2012 at 8:57 am

After the fiasco of Unit 1, the $billions of cost overruns on 1 and 2, and the ASSURANCES all over to US that it would not happen this time – enough so that the public could be comfortable with pre-funding – it is beyond outrageous that the rebar issue happened?

Where are the high level firings in Southern? Why hasn’t Shaw been required to make whole?

Nothing happens because the suckers – the people of Georgia – are paying for their grand party.

Shame isn’t an operative word.

That is set in very sound concrete.

Dave Bearse December 19, 2012 at 9:22 am

Comfortable with pre-funding?

Those comfortable with pre-funding consisted of Georgia Power / Southern Company and its 100 lobbysits, the General Assembly being fed and entertained by Georgia Power/Southern Company lobbyists, and the manufacturers whose lobbyists likewise treated the General Assembly.

For all practical purposes everyone now pre-paying will be dead before the conclusion of the 60 year payback period. The $400 Georgia consumers may more aptly be described as a partially refundable tax, refundable only to the extent payers continue to live, and to live in the Georgia Power service area.

David Staples December 23, 2012 at 11:08 pm

“Tim Echols made a big issue over the prefunding of Vogtle Units 3 and 4. He quickly rolled over.”

I would hardly say he “rolled over”. I know various people have their issues with Tim – as they do with most anyone involved at any level in politics. But Tim has been much more pro-consumer than some of his peers and is hardly the bought and paid for commissioner like [insert Commissioner here]. Word from some of my sources are that Georgia Power has had some rather harsh words for Tim. Without going into every single vote over the past year or so, remember that Tim was one of only two of them that voted to disallow the $3.2M in [clearly] imprudent costs that the PSC’s own expert witness testified shouldn’t be passed on to the consumer. It’s certainly good to hold our elected officials accountable, but Tim is the least of my concerns on the PSC. :-)

xdog December 19, 2012 at 9:04 am

“the suckers – the people of Georgia – are paying for their grand party.”

You left out ‘old’.

David Staples December 19, 2012 at 9:11 am

Is it too early for me to start saying “I told you so”? ;-)

IndyInjun December 19, 2012 at 10:41 am

Remember some of us voted for you.

Some of us gave Sen. Douglas hell in 2010 and put the miserable Tim Echols in.

We were damned either way but didn’t know it.

David Staples December 19, 2012 at 12:27 pm

Yep, I remember… and I appreciate your votes! :-)

jameshrust December 20, 2012 at 5:09 am

The Need For Nuclear Power in Georgia

Testimony before the Georgia Public Service Commission December 18, 2012

James H. Rust

The Georgia Public Service Commission is charged with regulating electricity supply to Georgia’s citizens. Part of that mission is safe, reliable, and economical supply of electricity. To the great fortune of Georgian’s, this mission has been admirably accomplished for many decades. There has never been a shortage of electricity where citizen’s worried about supply and subjected to blackouts or rolling brownouts as experienced by Northeastern states or other states like Texas and California. The Energy Information Administration’s latest price data shows the residential rate for Georgia customers September 2012-YTD is 11.19 cents per kilowatt-hour versus the national average of 11.91 cents per kilowatt-hour-a 6.4 percent reduction. This in spite of the fact Georgia has no coal, oil, natural gas or Columbia or Colorado Rivers as domestic energy resources. It is easy to have cheap electricity with power plants on mine-mouths, natural gas fields, or Hoover Dams. Much of Georgia’s energy for electricity production has to be transported over 1000 miles.

Georgia’s success may be attributed to its system of electing members of the Public Service Commission which make them more responsive to ratepayer’s welfare. Those who suggest changing this system do so at their peril. Adjusted for inflation, the cost of electricity today is as cheap as it has ever been.

Electricity in Georgia is supplied in approximate equal amounts by coal and natural gas and the remainder twenty five percent by four nuclear power plants. Two new 1100 Megawatt nuclear power plants are under construction which will increase Georgia’s capacity to generate nuclear electricity by more than 50 percent. Once the new nuclear units are in operation, Georgia could have nuclear power supply all its electricity in early mornings of mid-spring or mid-fall.

There are complaints about using nuclear power from both economic and societal issues. These complaints are overshadowed when considering the increased reliability of electric power supply provided by these new units. Nuclear power can provide about one-third of Georgia’s electricity demand. The plants operate more than 90 percent of the time and refueling may take place at intervals as long as 18 months.

Due to EPA and other governmental regulations, Georgia is gradually shifting electricity supply from coal to natural gas. Coal-fired plants can store ninety-day supplies of coal on the plant site; while the low density of natural gas as a fuel makes it impractical for storage of long term supplies. Those with long memories may remember John L. Lewis who frequently called miners out on strike which threatened electricity supply. Thus we have large coal piles as protection against supply disruptions. Natural gas supplies are disrupted by extreme weather events as shown by hurricane Katrina in 2005. The Georgia Public Service Commission’s support of present, and the two additional, nuclear power plants provides security against catastrophic loss of electricity supply and Georgia’s citizens should appreciate this concern.

A factor not mentioned in support of nuclear power is its influence on domestic reserves of coal and natural gas. One of the new 1100 Megawatt nuclear power plants would consume over its 60-year lifetime as a fossil-fueled plant 230 million tons of coal or 5 trillion cubic feet of natural gas. This is equal to 23 percent of our annual use of either coal or natural gas. Nuclear power plants extend the life of our fossil fuel reserves far out into the future and reduce future price increases. Georgia’s six nuclear power plants would save more than one year’s use of natural gas or coal.

Due to concerns about carbon dioxide from burning fossil fuels causing catastrophic global warming, arguments are made to use solar energy as the future source of electricity for Georgia. Catastrophic events caused by carbon dioxide are not taking place as witnessed by global temperatures not rising the past 16 years while atmospheric carbon dioxide increased 30 parts per million. The argument global warming caused Arctic sea ice to fall to its smallest amount since 1979 is put to rest because a hurricane in the Arctic Ocean early August tore up the sea ice and propelled it down to regions of warmer water for faster melting. From its minimum amount September 16, Arctic sea ice has been restored by 3.1 million square miles as of December 10–a record recovery rate.

Georgia’s Public Service Commission should examine all sources of electricity generation and solar energy is within their purview. Georgia has about two-thirds the prospect for generating electricity compared to desert areas of California, Nevada, and Arizona. California has mandated 33 percent of its electricity must come from renewable energy sources like solar and wind by 2020. This mandate is nowhere close to being met and the latest residential electricity rate for California is 13.94 cents per kilowatt-hour and rising-49 percent higher than Georgia. As California electricity rates spiral out of control, the motto of the state may be, “Will the last person leaving California blow out the candle.”

Georgia should resist any attempt to mandate electricity production by any form. Mandates in other states have caused increased electricity rates. Governments are not noted for making wise economic decisions.
————————————————————————————————————————————————
James H. Rust is a retired nuclear engineering professor from Georgia Tech with over 50 year experience in areas related to energy policy. He is the author of Nuclear Power Plant Engineering, co-author of Elements of Nuclear Reactor Design, and co-editor of Nuclear Power Safety; has numerous technical publications; and among many honors is the Georgia Society of Professional Engineers 1981-82 Engineer of the Year. He currently funds annual engineering scholarships of $2500, $6000, and $6500. He is a policy adviser for The Heartland Institute.

IndyInjun December 20, 2012 at 11:38 am

James H. Rust has a vested interest.

All of my comments are not directed at WHETHER the two units at Vogtle should be built.

We are PAYING TOO MUCH and the INCENTIVES ARE TO RAPE US.

Just like before there are practically NO accounting controls to protect us and unlike before when Southern had to eat cost overruns (although they only took half the hit they deserved) now their Boyz under the Gold Dome have it so that 1) cost overruns are the pubic’s 2) there is an 11.5% reward to Southern to incur overruns and 3) the public has to pay over a billion in advance profits.

Around these parts many love the jobs and the financial impact, but the fact remains WE PAID TOO MUCH and WILL PAY TOO MUCH!

Why is it that saying WE PAID TOO MUCH gets a knee jerk reaction from nuke industry insiders as if we said it shouldn’t have been built?

Dave Bearse December 21, 2012 at 9:17 pm

California’s 13.94 cents per kilowatt hour is 25%, not 49%, of Georgia’s 11.19 cents.

One of my principal concerns is disposing of spent nuclear fuel.

Dave Bearse December 21, 2012 at 9:18 pm

California’s 13.94 cents per kilowatt hour is 25%, not 49%, higher than Georgia’s rate of 11.19 cents per kilowatt hour.

Harry December 21, 2012 at 11:05 pm

“One of my principal concerns is disposing of spent nuclear fuel.”

Then you should be concerned about how Obama deals with sites like The Yucca Mountain Nuclear Waste Repository.
http://en.wikipedia.org/wiki/Yucca_Mountain_nuclear_waste_repository

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