Nuclear power merger between Duke and Progress still financially risky

The key questions are, who would pay for those multi-billion dollar projects…?…..New nuclear projects are being abandoned in several states and foreign countries – after millions were invested – due to technical complexities and soaring cost estimates….Even Progress CEO Bill Johnson admitted last month that a merger with Duke would still leave nuclear construction “a risky proposition.”…..

Beware the bill for nuclear plants – Other Views NewsObserver.com, BY LYNICE WILLIAMS AND JIM WARREN, 2 Feb 2011, Recent news of a merger between Duke Energy and Progress Energy sets the stage for North Carolina to become home to the nation’s largest electric utility. They say the merger will save customers money by eliminating redundancy, but what appears to be a key driver behind the merger – building two nuclear reactors in South Carolina – would cost customers much more. Duke and Progress might also try to build two units at the Shearon Harris plant near Raleigh.
The key questions are, who would pay for those multi-billion dollar projects during construction? And should the utilities or North Carolina families and businesses take the major risks of cost overruns and project failure?

Due to controversial state legislation in 2007, the utilities can already force consumers to pre-pay for new plants. But Duke and Progress executives have signaled to key lawmakers and reporters that they still cannot attempt nuclear projects without additional legislation. It appears they want an automatic pass-through of rate increases without having to justify them in traditional legal proceedings before the state Utilities Commission.

Such a plan would allow annual rate hikes beginning years before electricity could be generated……………..

The issue isn’t whether nuclear power is safe enough, or that it’s now more expensive than solar or wind energy, but whether public or private money should be at stake with the highest-risk construction ventures of our time.

New nuclear projects are being abandoned in several states and foreign countries – after millions were invested – due to technical complexities and soaring cost estimates. Every project still under way is over budget and behind schedule, most notably those being attempted by the highly touted French nuclear industry.

Financial analysts at Moody’s call U.S. nuclear construction a “bet the farm” risk for utilities. Even Progress CEO Bill Johnson admitted last month that a merger with Duke would still leave nuclear construction “a risky proposition.”…..

Beware the bill for nuclear plants – Other Views – NewsObserver.com