Wednesday, February 14, 2007

Florida PSC Adopts Pro-Nuclear Incentives Package

From Gainesville.com:

In a move that could provide more financial incentive for building nuclear power plants, the Florida Public Service Commission on Tuesday adopted new rules that will let investor-owned utility companies recover some of the costs of the new plants before they begin operation.

The immediate beneficiary of the rule change could be Progress Energy, which is taking steps to build the state's first nuclear power plant since 1977, when the company began operating its Crystal River facility. Progress Energy has identified a 3,000-acre site in Levy County eight miles north of the Crystal River complex as the possible location for a new nuclear plant.

8 comments:

gunter said...

Hi,

No surprise... many US nuclear power stations were built throughout the 1980's on the "Pay Me now, Pay Me Later" plan through Construction Work In Progress (CWIP) charges passed on to rate payers through industry-led "public" utility commissions.

Actually, CWIP charges made a lot of irate payers leading to a number of the more than 100 canceled construction projects.

By the way, who pays for those nuclear waste management charges hundreds, thousands of years from now?

Electricity is but a fleeting by-product, nuclear waste and nuclear weapons are the enduring products of nuclear power. With the production profit motive gone, the real cost starts to mount up. Nuclear waste is also nuclear weapons material.

Nuclear power's "Pay Even Later" plan, kinda of a hellish bargain, don't you think?

Gunter, NIRS

David Bradish said...

The 100 canceled projects were not because of irate payers. They were due to lower demand and high inflation rates.

The nuclear industry is paying for the "nuclear waste management charges..., thousands of years from now?" It's called the Nuclear Waste Fund. I thought you knew that.

"Electricity is but a fleeting by-product." Probably not if people want to live longer. The MIT study shows a nice correlation between the human development index and electricity consumption in the appendix. Nuclear waste is a very small price to pay for a better life considering it doesn't harm anyone.

gunter said...

Excuse me, David...

But a couple of examples come to mind where the n-industry unsuccessfully tried to pawn off the cost for their nuclear misadventures through CWIP charges or its equivalent. Take Public Service of Indiana's failed Marble Hill construction and Northern Indiana Public Service Company's Bailly fiasco.

PSI tried to legislate CWIP in Indiana to finish the Marble Hill nuclear power plant. Originally proposed to cost $700 million, Marble Hill sucked up $2.8 billion before the construction project was canceled only 20% complete. This classic nuclear project was closed by direct action of irate ratepayers who defeated CWIP legislation. Once CWIP was killed Marble Hill collapsed.

Another example, the Bailly nuclear power station never got past being a hole in the ground. Then NIPSCo got the Indiana Public Service Commission to pass the cost of digging the hole onto the ratepayers. An irate public again mobilized with a restraining order on the attempted swindle. It went all the way to the US Supreme Court which then upheld the lower court order. How bout them Hoosiers? They ain't paying for those nuclear mistakes today like a lot of other states.

Given the notorious and historic lack of reliability on the real costs of nuclear power, there is no assurance that the Nuclear Waste Fund, based on user fees for the nuclear generated electricity, will fund the full institutional care for the looooong term management of high or even so-call "low" level radioactive waste.

So what we have is a confidence game perpetrated on future generations for the eventual costs of n-waste container failures, radioactive off-gassing, contaminated groundwater migration, etc., who without one watt of benefit will pay forever more in one currency or another.

And nuclear waste "doesn't harm anyone." Come on, don't be absurd. I suppose you'd carry a irradiated fuel pellet in your pocket to work or snort even the tiniest amount of plutonium?

I gotta go...

gunter, nirs

David Bradish said...

Hmmm, two plants canceled because of CWIP out of over 100. What about the 20-30 additional reactors planned to be built on already existing facilities? I'm pretty sure they weren't canceled due to CWIP. Maybe it was more like too much demand.

The DOE seems to think that the NWF fee is adequate (pdf). On top of that, even after a repository is built we will still be paying for it with the additional kWhs generated.

Nuclear waste is of course deadly. But who gets sick or dies from it? No one. That's because the industry knows how to manage it safely. The industry pays for and manages its own waste which doesn't even come close to affecting the public. Sounds like a responsible industry to me.

Anonymous said...

Greetings!

The original thought behind recovery of CWIP costs was a consequence of the two-step licensing process. Intervenors had two opportunities to kill a project. If a CP was approved, intervenors could still delay operation and revenue generation of a plant by holding up the OL with frivolous litigation. In theory (and in fact reality) a utility could end up building a plant but, for no good reason, never be allowed to operate it. In that kind of regulatory environment, allowing pass-through of CWIP costs was not only reasonable, it was the only fair thing to do.

Cancelled projects in the 1970s and 1980s were due to the recessions that occurred then, which slowed economic growth and reduced the rate of growth in electricity demand. And it wasn't just nuclear projects that suffered. More coal-fired plants were cancelled or deferred during that period. The industry experienced a slow-down that affected many projects, not just nuclear plants.

gunter said...

David,

My point is that n-waste constitutes a biological hazard (i.e. "deadly") thousands of years.

There will be costs over that same time frame for maintaining and repairing those biological barriers as well as mitigating the barrier failures resulting in ground water contamination, such as is currently occurring at the Indian Point Unit 1 leaking fuel pool.

Anonymous,
Nuclear power plant construction ceased not because of inflation and reduction in demand as you claim, but because of the economic failure of nuclear power industry. It is that same risk to a business profile and credit rating, not inflation or demand, that continues to give Wall Street investors cold feet for reinvesting in nuclear power.

gunter, nirs

Anonymous said...

The fact that power plant projects of all types, coal and nuclear, suffered cancellations during the economic recessions of the 1970s and early 1980s, with subsequent reduced growth of electricity demand, gives the lie to the assertion that only nuclear plants were at an economic disadvantage. Just as a rising tide raises all boats, so a receding economic tide lowers all boats.

Nuclear does have an economic disadvantage, but it is not a shortcoming of the technology. It is a result of regulatory uncertainty combined with the despicable tactics of intervenors and others who gain at the expense of nuclear. Intervenors have learned to game the system to the detriment of nuclear projects. They know that any capital-intensive project can be killed if you stretch the timeline out far enough. I know from experience. I had a consulting contract with PGE for the Diablo Canyon seismic upgrade. That plant sat completed but idle for ten long years for no good reason other than to penalize the owners for building it.

Anonymous said...

I must take issue with Gunters statement that Marble Hill Nuclear Generating station was only 20% complete when the project ended (a number that orginally came from a dubious agenda driven source). Unit 1 was in fact closer to 80% complete and Unit 2 was in the 40% range. I discused this with a former site engineer as well as one of the executive project managers. They independantly stated similar construction progess. Unit 1 construction was in fact accelerated as the "end" approached in an effort to sway the decision to complete the project. I personally toured the mothballed facility in the late 1980's and can confirm that it was infinitely beyond being only 20% complete. What killed this and similar projects is still very debatable, but please check your facts, your argument will be more believable.