nuclear-news

Georgia’s new nuclear reactors a cautionary tale

R Street, BY MARC HYDEN, AUG 21, 2023

Regulators and industry professionals have been gushing over the launch of Georgia’s newest nuclear reactor—Plant Vogtle’s Unit 3. It’s the first such reactor built in the United States in over three decades, and it is positioned to provide around 500,000 customers with clean energy for up to 80 years, which is something to celebrate.

Electric monopoly Georgia Power—who owns a nearly 50 percent stake in it—hailed the recent Vogtle construction as an “American energy success story.” While nuclear energy is impressive and there’s reason to be awestruck by Unit 3, the Vogtle project has been an absolute mess. It’s less of an American success story and more of a subsidized boondoggle that should serve as a cautionary tale for others.

In the early planning stages, a conglomerate of electric companies came together with plans to build two new nuclear reactors—units 3 and 4—and quickly obtained some attractive deals. The U.S. Department of Energy agreed to provide $12 billion in loan guarantees for the construction, the Georgia Public Service Commission greenlit the Vogtle plan, and in 2009, the state Legislature permitted Georgia Power to raise ratepayers’ bills to begin recouping the construction costs far in advance of the units’ completion.

Since Georgia has a monopoly system for electric companies, customers have little choice but to fork out the cash, and the utilities saw little risk and heralded the plan. The construction was intended as a clean energy investment in the future. Best of all, the units would supposedly be completed quickly and for a fair price. That’s where things began to fall apart.

Plant Vogtle’s construction could be best described by the Beach Boys’ lyric, “We’ll get there fast and then we’ll take it slow” because the only thing that happened relatively quickly were the sweetheart deals. Original estimates suggested that units 3 and 4 would be operational in 2016 and 2017, respectively, and the total project would cost around $14 billion. That’s a lot of money for captive ratepayers to bankroll, but that turned out to be more like a down payment. Cost overruns and persistent delays plagued Vogtle.

Construction began in 2009, but only by this summer did Unit 3 become operational for commercial use—7 years behind schedule. Meanwhile, Unit 4 isn’t expected to serve customers until later this year or next. Further, the running price tag for the project now exceeds $35 billion—more than double the original projection—but this was easily foreseeable.

Built in the late 1980s, Vogtle’s units 1 and 2 cost many billions more than estimated, and over 20 nuclear projects have been abandoned in the South since the 1970s for various reasons. Constructing massive nuclear reactors isn’t cheap, nor is it a simple task by any means, and just as anyone who watched the HBO series Chernobyl knows, you don’t want to rush through construction and cut corners……………………………………………………

If nuclear energy is in a resurgence, then Vogtle should serve as a cautionary tale for other states. Mega projects subsidized by the government and underwritten by electric monopolies’ captive ratepayers are fraught with problems. Rather than rushing to help finance massively wealthy energy companies’ nuclear ambitions, the government should reassess whether the actual—not estimated—costs and delays are worth it.

Governments love to act rashly, and asking them to proceed with caution might be futile in a changing world, which reminds me of another song lyric: “The more things change, the more they stay the same. https://www.rstreet.org/commentary/georgias-new-nuclear-reactors-a-cautionary-tale/

August 22, 2023 - Posted by Christina Macpherson | business and costs, USA