Vogtle Nuclear Expansion Total Cost is 65 Billion Dollars, former Commissioner Says
Photograph by Glenn Carroll, Nuclear Watch South
(APN) ATLANTA — Plant Vogtle’s proposed nuclear expansion with new units 3 and 4 will cost an estimated 65 billion dollars, former Georgia Public Service (PSC) Commissioner Bobbie Baker says, based on his analysis of information he received when cross-examining the PSC staff witness at the June 23, 2015 PSC hearing.
The hearing was for the 12th Vogtle Construction Monitoring (VCM) Review.
Former Commissioner Baker, a current legal advisor for Southern Alliance for Clean Energy (SACE), first wrote about his analysis of the new information on the blog, Georgia Utility Update.
Baker wrote that the current “total revenue” requirement for the Project is approximately 65 billion dollars.
“I got that information at the last hearing, when I cross-examined one of the PSC’s staff expert witnesses, Philip Hayet, who was providing the financial analysis for the project,” Baker said.
“I ask him based on the current construction cost projection of 7.5 billion for Georgia Power’s share, what would the total revenue requirement be for their share of the project? And he said 30 billion dollars,” Baker told APN.
Hayet cited at the VMC that Georgia Power’s share of the total revenue was 30 billion dollars, but there are other owners to consider.
Georgia Power only owns 45.7 percent of the Vogtle Project, that is, less than half the total project cost. Other owners are Oglethorpe Power, 30 percent; Municipal Electric Authority of Georgia (MEAG), 22.7 percent; and Dalton Utilities 1.6 percent.
“That was the first time we have gotten that kind of information for the total project cost from Mr. Hayet… That number includes construction, financing, operation, and maintenance over the life of the project,” Baker told APN.
The total revenue number will increase as the two million dollar a day delays continue to add up. Unless the PSC or Legislature changes course, Georgia Power’s share of the 65 billion cost will come out of the ratepayers’, not stockholders’, pockets.
When APN asked Georgia Power about these numbers, they give only the projected construction cost of Georgia Powers share.
“As reported in our latest VCM, the current construction and capital cost forecast for the project is $5.045 billion for Georgia Power’s portion of the project… This is the projected construction cost of the facility,” John O’Brien, Senior Communications Specialist, Georgia Power Company, said in an email.
“With an estimated $3 billion in savings for customers compared to natural gas combined cycle generation, the next best option, it is the most economic choice for meeting Georgia’s future energy needs,” the email continued.
But even though Georgia Power continues to cite a three billion dollar savings figure, Baker insists the figure is no longer accurate, per the PSC’s own staff testimony.
“The company has been touting all these smoke and mirror benefits dealing with savings from financing cost, federal production tax credits for which they would or could be eligible for fuel cost saving,” Baker said.
“It started off at six billion dollars in additional benefits to ratepayers, now that amount has gradually been eroded over time because of the delays. The most recent benefit number is 2.7 billion dollars,” Baker told APN.
“Mr. Hayet said based on his calculation, which included both the benefits and the determinates, his number is now 208 million dollars in current benefits,” Baker told APN.
Baker explained that the federal production tax credits are 522 million dollars, but that in order for Georgia Power to quality for the tax credit, both Vogtle units 3 and 4 are to be operational by December 31, 2020.
Baker says it is highly unlikely Unit 4 will be up and running by then, thus the 522 million dollars has to be subtracted from the current estimate of 208 million dollars in benefits, resulting in a negative benefit for ratepayers.
Also, the email from Georgia Power cites a sixty year expected life of Vogtle 3 and 4 in evaluating the value of the project.
“When considering the Vogtle expansion, it is important to consider the 60 years of benefits and savings they offer for customers, including long-term fuel savings of nuclear generation – this is how we evaluate the value of the project. The economics of completing the new units remain overwhelmingly positive,” O’Brien stated in the email.
As previously reported in APN, “The oldest currently operating nuclear reactor in the U.S., has only operated 45 years. Other reactors have shut down because to operate beyond 40 years is not financially viable,” Glenn Carroll testified at the VCM review.
Georgia Power did not give a rebuttal to Carroll’s testimony.
MORE DELAYS, MORE ADVANCE COSTS TO RATEPAYERS
Hayet testified that the 39 month delay in construction would add 319 dollars or $6.26 per month to the average (1,000 kilowatts hours per month) residential ratepayer bill. The increase will be greater for business owners and customers who use more electricity.
This increase will start in April 2016 and continue until 2020 in the form of higher fuel costs and the Nuclear Construction Cost Recover (NCCR) tax on ratepayers’ monthly utility bills.
Over one billion dollars has already been collected from ratepayers via the NCCR tax.
As previously reported by APN, it was State Sen. Don Balfour (R-Snellville) who sponsored the anti-consumer bill SB 31, which, as enacted, forces ratepayers to pay upfront for the construction of the Vogtle project.
Truly a deceptive number, since that $65 billion is not construction cost alone, but includes construction PLUS operation and maintenance for 60 years. During that time, Vogtle 3&4 will produce 17.6 million MWh every year, or over 1 billion MWh total. So that works out to 6.1 cents per kWh.
More advanced Molten Salt reactors could use “burn” and eliminate nuclear waste. That’s the only sort of nuclear reactor that should be funded. I’m concerned that well intentioned people are sadly making it more difficult to have better nuclear power solutions because of knee-jerk fears over advanced technology and seemingly the fear of radiation in general. The technology behind such a “walk-away safe” Molten Salt reactor is sound and could be far more COST EFFECTIVE as well.
Well considering there is no working model, and considering that every evolution of nuclear has had serious problems……..and these smaller reactors lose economies of scale…..and mixing high temps, salt, steel containers under pressure, and radiation is just about one of the more insane things that humans could conjure up to try to capture this supposed “free lunch” called nuclear energy…..
Well, one more, considering that we have much better options…..safer and cheaper.
John P – Your comment is just more Nuclear “Pie in the $KY” talk which is really just more Nuclear Begging for ever more R&D funds….
Get serious, Solar (of all flavors) can be installed instead and it will produce PROVEN SAFE CLEAN NON Nuclear Energy for 3-5 decades with no RISK (did I forget to say that it will also cost much less?).
Nuclear has the lowest deaths per Terawatt-hour of electricity generated, it is much safer than wind/solar per unit of energy produced.
His 65B number is amazing because it matches my spreadsheet calculations I did a few weeks back at 64.8B cost to complete and operate for 30 years.
That results in a cost of 15 cents per kWH
Data is here, you can download the spreadsheet too if you wish.
nuclear 3¢/kWh safer, reliable, carbon-free.
Again, in this discussion, no mention is made of the huge back end costs of decommissioning and spent fuel management and storage.
PS I have an MSME, I am a Certified Energy Manager thru AEE, and I have 25 years of experience in Construction and O&M cost estimation.
My estimate came to, amazingly 64.8B
So for those who think this number is high, think again. check the link
I hate to break this to y’all Georgia peoples, but if you let Vogtle go critical, they are going to strip 20 to 30B extra dollars from your state.
If you stop them now, you are going to lose 1B that they already took from you, poised as “creative financing” to “save you money” on financing costs (by taking your money).
Either way nuclear sucks, choose the least worst way, and shut that site down NOW!
It is easier (and much less expensive) to shut down a Nuclear Reactor before it is built than afterward, when the cost to operate it is too high!
More good news: Ameren officially pulls plug on new Callaway nuke:
http://bit.ly/1StdIJk via @STLtoday
thanks for that bit of news, those people cut their losses, smart!
More on why Nuclear is pricing itself out of the marketplace:
Around the World, Nuclear Can’t Compete With Growing Renewables
“What is spectacular is the extent to which the nuclear industry is appearing to ignore reality.”
July 16, 2015:
Global investment in new nuclear is an order of magnitude less than renewable energy investment. That is just one of the findings of a new independent report on the state of the worldwide nuclear industry that was issued on Thursday. No matter which aspect of the nuclear industry is assessed, the picture isn’t pretty.
In Illinois they are trying to change the laws, corrupt the “auction process”. Nuke has nothing to lose by trying this tact. Even if they shutdown during a peak summer or deep freeze in winter…..they are no worse off, that will cause bankruptcy, but that is where they are headed anyway.
So they throw this hail Mary pass to get a few more years of profit, while ignoring required maintenance. They don’t give a rip about you or me.
If they blow up, its probably even better for them, they will get to decommission under a Federal emergency budget, etc. And still be bankrupt, but at least they extracted profits more than if they just shut down now.
Renewables = 98% Of New US Electricity Generation Capacity In June
“Let’s look at what has been happening with wind, solar, nuclear and fossil fuels. I’ll spell it out…” — Bob_Wallace Read his fact filled comments and then consider that the cost of renewables are dropping while Nuclear is continuing to grow almost quarterly! Now imagine what Nuclear will cost in 10 to 40 years as compared to renewables!
Here are some more factual cost numbers provided by bobwallace that were posted on Forbes: http://www.forbes.com/sites/kensilverstein/2015/07/11/france-will-fix-its-nuclear-problems-but-will-that-satisfy-other-nations/2/
“Production costs from the existing fleet are heading higher over the medium-term,” France’s Cour des Comptes said in a report to parliament published today.
The report, which updates findings in a January 2012 report, said that in 2012 the Court calculated the cost of production of the current fleet for 2010, which amounted to EUR 49.5 per megawatt-hour.
Using the same method for the year 2013 the cost was EUR 59.8/MWh, an increase of 20.6 percent over three years.
That’s about $0.08/kWh for electricity from paid off reactors.
US onshore wind is now about 4 c/kWh unsubsidized. US PV solar is now about 6.5 c/kWh unsubsidized. That for new capacity and their costs will fall to about 1 c/kWh upon payoff. Compare both the new and paid off wind and solar prices to France’s 8 c/kWh for paid off nuclear.
If new Vogtel energy costs 18 c/kWh who is going to profit from using it/ Ratepayers will be held in Energy Slavery as long as Vogtel operates figure 20 to 40+ years as regulators force them to buy Energy instead of installing their own residential Solar.
yep, with project rates using this data and that Nukepro estimate *almost exactly the same* at 64.8B, it looks like the people of Georgia are going to see a 200% to 300% increase to “support nuclear”.
So, I read this as ratepayer pay for construction beforehand, and since construction is delayed, they will pay an extra $6.23 per month/1k watts (to cover what?)
What happened to “electricity too cheap to meter”? Or was that one of the first atomic power lies? But of course.
Yeah the ratepayer are “on the hook” for the additional cost of construction financing, which once deep into the project, becomes VERY large numbers even though any income or benefit from the plant is still years off.
Fleecing the public.
Stop building it. Turn the place into a natural gas power house. Cheaper in the long run.
Exactly, much useful infrastructure is there, also build a solar farm in the evacuation zone where an massive overload will be called a “sunny day”
There are many details left out of the article but a simplistic calculation would be
$65B / 60 years / 8760 hours/year / 2,000,000 kWatts *100 cents/$ = 6.2 cents/kwHr.
Just a few cents/kwHr higher than natural gas today given the exceptionally low price of natural gas. But natural gas prices are unstable and over 60 years they are likely to get substantially higher whereas the nuclear costs are relatively stable.
$65 billion is the total revenue expected not the “cost”. Cost overruns are now pushing the price of the two reactors to $7.5 billion (see: http://www.power-eng.com/articles/2015/03/plant-vogtle-nuclear-reactors-expected-to-cost-7-5bn.html ) . Bobbie Baker actually said that : “The current total revenue requirement for the Project is approximately $65 billion”. The OP claim that “Plant Vogtle’s proposed nuclear expansion with new units 3 and 4 will cost an estimated 65 billion dollars” is pure BS. The expected revenues over a 60 year life time are expected to be $65 billion. The build cost will be $7.5 billion.
To get the quote for Commissioner Baker:
1. Follow this link: http://www.fmglaw.com/lawline_alert.php
2. Click on “Georgia Utility Update – July 2015″
actually, the cost by Georgia Elec, for both is around $18B with more delays upcoming thus more construction financing costs.
The 7.5 is just for Georgia Power’s costs, they are just part owner.