Connect Savannah: Endless power, endless cost

Connect Savannah 

Endless power, endless cost

The brutal economics of a move to more nuclear energy

By Kathleen Graham

Two views of Plant Vogtle’s twin cooling towers on the Savannah River
Two views of Plant Vogtle’s twin cooling towers on the Savannah River

Editor’s Note: In last week’s Lead Story “Atomic Spring,” Kathleen Graham brought us an overview of the resurgence of nuclear power advocacy in Georgia. This week she delves deeper into the economics a move to more nuclear energy would bring the taxpaying public.

Proponents of nuclear power as an energy resource often argue three things in its favor: it’s cost-effective during operations, reliable and clean.

“One of the reasons we and many other utilities have gone back to give nuclear energy a strong look is because when you look at the cost of other fuels for generating electricity- when you look at the whole production costs and construction costs- nuclear energy stacks up very competitively,” says Carol Boatright of Georgia Power.

“It’s cheaper than gas or coal or any others. The things we are seeing right now indicate that nuclear energy is the most effective, efficient and economic means for meeting the growth and demand that we’re seeing.”

Sara Barczak, Safe Energy Director of Southern Alliance for Clean Energy (SACE), disagrees and argues nuclear power is a poor investment.

“The economics of this as an investment have been masked for decades,” says Barczak. “Now it’s masked even more because you have old plants that are operating right now and their operational costs are cheaper than a coal plant. But they aren’t thinking about the fact that it cost 12 times what they predicted to build it, and we’re still paying for those investments.”

One investment now sits in Burke County, near Waynesboro, Georgia. Final construction costs for the Plant Vogtle Electric Generating Plant and its two nuclear reactors were capped at nearly $8.87 billion, a twelve-fold increase from its initial estimated cost of $660 million.

According to Georgia Power’s Carol Boatright, many factors contributed to the unexpected cost increase, including high interest rates at that time and a nuclear accident.

“During the period of construction, the incident of Three Mile Island occurred,” explains Boatright, referring to the accidental meltdown in 1979 at the Three Mile Island Generating Station, a commercial nuclear plant near Harrisburg, Pennsylvania.

“After that incident, there were a lot of changes- re-engineering, regulation changes and reviews- that slowed down the process.”

Boatright describes how parts of the plant already built had to be torn down or reconstructed to meet new regulations, and the blueprints were being reworked while construction was ongoing.

In addition, Plant Vogtle was originally intended to accommodate four reactor units before it was downsized to two units, mostly due to a decline in growth and financial constraints within the company, according to Boatright.

Since the two current reactors came online in 1987 and 1989, ratepayers have paid, and continue to pay back the $8.87 billion used to build the units, resulting in the largest rate hike in Georgia’s history.

“It’s still in the rate base, and it’s still an asset our ratepayers are paying on,” says Boatright.

Recently, Southern Company, the operator of Plant Vogtle (Georgia Power is the majority co-owner) applied for an Early Site Permit (ESP), which if approved by the Nuclear Regulatory Commission and the Georgia Public Service Commission, would allow the company 20 years to decide whether or not to build two additional reactors on the site.

While an ESP is not a commitment to build anything, the cost of the ESP application ($51 million) and the exhaustive measures taken to secure approval from the necessary commissions says something of Southern Company’s intentions.

No final cost estimate for the two reactors has been set, but a $3-4 billion price tag would be in the neighborhood.

With respect to unanticipated construction costs and rate hikes, what’s to keep history from repeating itself in Georgia?

“That is why we are in contract negotiations now,” says Boatright. “We want to confirm everything ahead of time as much as possible. We want to have a firm price from the vendors as to how much various materials and the total project itself would cost. The economics are part of the decision on whether we do go forward.”

Sara Barczak of SACE maintains government subsidies and incentives make nuclear power seem more attractive as an investment.

“If the Energy Policy Act of 2005 didn’t have these subsidies ($13 billion in subsidies allocated to the nuclear industry), I don’t think we’d be seeing this race by these utilities to build these new nuclear plants,” says Barczak. “The more money that they can get for free, so to speak, from taxpayers and ratepayers, the less risk they have and their shareholders like that.”

Barczak also argues, rather than sinking large amounts of money into building nuclear reactors, there are better ways to invest that capital.

“Let’s just say, let’s give it to them that it’s going to cost $4 billion and they’ll get it online by 2015-2017,” she says. “There’s so much more that you could have done with that same amount of money in terms of energy efficiency.”

For the most part, Georgia Public ServiceCommissioner Stan Wise supports nuclear energy.

“To go forward we’ve got to look and see what do we do to promote efficient and reliable production of electricity in our state, not only for our current customers but also for the new Georgians that will move here in the next 20 years,” says Wise, underlining the importance of utility companies to remain healthy and earn a profit as well.

“I think we have to do the very best we can and know that fuel diversity, reliability and safe generation for future Georgians is vital. I think the nuclear option has to be one that’s in the mix.”

The Public Service Commission (PSC), made up of five elected commissioners, negotiates with utility companies and regulates utility rates on behalf of ratepayers. With respect to electricity, while the goal is to keep electric rates as low as possible and electric generation high, Commissioner Wise argues Georgians shouldn’t expect a free lunch.

“I wish I could tell you that all of this could be done at no cost, but that’s the head in the sand approach that I don’t believe this commission can afford to take,” says Wise. “If you go into the hearing room expecting a free lunch, you’re going to walk out with no lunch.”

Although he’s a keen supporter of nuclear energy, Commissioner Wise criticizes the federal government’s failure to take ownership of the steadily accumulating nuclear waste stored on-site at commercial plants around the country.

No one, not even the federal government, gets a free lunch.

“Ratepayers in this state have paid a significant sum of money on their power bills every month to the federal government, the black hole of all black holes, for a nuclear waste repository, always with the expectation that it would be Yucca Mountain,” argues Wise. “We continue to pay into that fund.”

In 1982 the federal government established the Nuclear Waste Fund, one of its first steps toward taking ownership of the spent fuel and high-level radioactive waste generated by nuclear reactors around the country.

Power plants that use nuclear energy to produce electricity also produce extremely toxic nuclear waste. In the early 1980’s utility companies began paying into the Nuclear Waste Fund with the expectation that the government would eventually remove the waste from their plants and store it elsewhere.

The U.S. Department of Energy (DOE) took charge of designing and developing a permanent repository that could safely store radioactive waste over a long period of time, 10,000- 100,000 years.

For several years the DOE studied the suitability of building a permanent repository at different sites around the country, but in 1987 Congress directed the DOE to focus on Yucca Mountain in Nevada, 100 miles northwest of Las Vegas.

Since then the Yucca Mountain Repository has faced much opposition and repeated setbacks, and what was supposed to open in 1998 now has a “best-achievable” opening date of 2017, according to the U.S. Department of Energy website.

“Yucca Mountain has been both a political and scientific nightmare,” says Sara Barczak of SACE.

“It was just a few years ago when the project sort of imploded on itself because scientists working on the project came forward and admitted there was a lot of falsified information. The science is now essentially discredited and billions of dollars have been spent on it.”

Carol Boatright of Georgia Power arguesthe problems with Yucca are mostly political.

“It’s bogged down in politics,” she says. “It’s been called the most expensively studied piece of real estate on earth.”

Whether the delays are due to science, politics or both, Commissioner Stan Wise argues it’s not fair on Georgians and other ratepayers who continue to pay the federal government for services it isn’t providing.

Even as more money is poured into the Fund, local utility companies and ratepayers pay for the waste to be stored on-site at their local plants.

“We’re already paying for a national waste repository and now our companies have to fund a ‘temporary’ site, which we know good and well won’t be temporary,” says Wise, arguing that the federal government is content to let utility companies handle their own waste in the meantime.

Wise, who has visited the Yucca Mountain Repository, insists it must be approved and opened as soon as possible. Continuing to pay for two repository sites is simply not fair to ratepayers, and it’s deceptive on the government’s part.

“If you’re not going to finish this, we want our money back, and we’ll refund our ratepayers,” says Wise. “When you’ve opened Yucca Mountain, then we’ll forward you back your money. This continues to be bought and paid for, and we don’t get anything for our money. It’s wrong, and it’s theft on a grand scale.”

Since 1982 electricity customers nationwide have paid over $28 billion into the Fund. Out of that total payment, $9.1 billion has been put toward the repository.

According to Carol Boatright of Georgia Power, Georgians have paid $616.3 million into the Nuclear Waste Fund. Meanwhile, nuclear facilities like Plant Hatch in Baxley, Georiga have run out of space in their spent fuel pools and have begun storing nuclear waste aboveground in dry-cask storage containers. Plant Vogtle will run out of space in its spent fuel pools in 2014, after which it will move to dry-cask storage.

“There’s really no specific length of time we could not store in dry-cask storage,” says Boatright. “If we had to we can continue to store like that.”

Both Wise and Boatright are hoping the right amount of political pressure will force the government to shift into a faster gear, and both are encouraged that the DOE is finally getting around to applying for its permit to finish construction of the Yucca Mountain Repository. And the Nuclear Regulatory Commission must still approve the permit.

Sara Barczak is worried about another permit closer to home. “Why would you advocate to build new reactors when there’s no end in sight as to what to do with the nuclear waste?” she asks. ƒç

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Learn more about the concerns raised by Southern Alliance For Clean Energy at, or to learn more about Southern Company’s nuclear operations, visit A Public Service Meeting will be May 11 at 9:45 a.m. at the offices of the Georgia Public Service Commission, 244 Washington Street, in Atlanta. Southern Alliance for Clean Energy and other groups will present their case against the construction of 2 new reactors at Plant Vogtle. The public can call the Georgia Public Service Commission at (404) 656-4501 or (800) 282-5813.

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