NEI Nuclear Notes

Nuclear Science Week (NSW – but very safe for work) is a national, broadly observed week-long celebration to focus local, regional and national interest on all aspects of nuclear science. Seattle is hosting NSW this year, bit let’s focus on the national aspect. In fact, plans in other locales are – well, pretty darn awesome. I’ll zero in on South Carolina : The Citizens for Nuclear Technology Awareness (CNTA) will hold their 23rd Annual Edward Teller Lecture and Banquet on Monday, October 20, 2014.  The lecture is a community event attended by community leaders, CNTA members, local and national business and corporate interests, government and Savannah River Site officials, and elected officials from Georgia and South Carolina. Guest Lecturer – Robert Stone (Director – Pandora’s Promise and Oscar-Nominated & Emmy-Nominated Documentary Filmmaker) This is especially impressive. One would imagine that, two years after making Pandora’s Promise , Stone would have ...

Uprate at St. Lucie impossible without CWIP. Two nuclear critics, Peter Bradford and Mark Cooper, recently published a report (pdf) explaining how “advanced cost recovery” for nuclear plants in Florida and South Carolina “creates another nuclear fiasco.” Cooper’s main argument seems to be that Construction Work in Progress (CWIP) shifts to ratepayers all of the risks of building nuclear plants. This is either a deliberate distortion or a misunderstanding of how the cost recovery mechanism works. How “advanced cost recovery” (aka CWIP) works When a utility builds any type of project, it uses a mix of debt and equity to pay for the construction. The debt comes from banks and other investors and, of course, the utility must pay interest to use the debt. The equity comes from the utility’s shareholders and also requires a return for its use. The CWIP financing mechanism, which is also allowed by the federal government for interstate transmission projects, allows a company building...

J. Scott Peterson The following guest post was written by J. Scott Peterson, NEI's senior vice president, communications. NEW YORK CITY—Despite challenging electricity markets and natural gas prices at a 13-year low, industry leaders are confident in the long-term prospects for nuclear energy and its contributions to the electricity mix and U.S. economic growth. On average, America’s 104 commercial reactors are the most efficient power producers on the grid—operating at 86 percent capacity factor. Capacity factor is a measure of efficiency, with a 100-percent rating equaling full power production 24/7, 365 days. Absent reactors in California, Florida and Nebraska that have been closed virtually all year for extended maintenance, the capacity factor at the other 100 reactors was just shy of 90 percent. “We continue to invest in these facilities to preserve their asset value,” NEI President and CEO Marv Fertel told nearly 200 financial analysts and journalists at the Insti...

Some happy news is always a good way to kick off the weekend. Fairfield County officials gathered at the county treasurer’s office Jan. 15 to meet with representatives of the V.C. Summer Nuclear Plant – and receive a check for $23.4 million. If my local nuclear facility wanted to hand me a few million dollars, that would be a-ok, but this actually speaks to one of the major benefits of having a power plant in the neighborhood. “We are very pleased that V.C. Summer Nuclear Station continues to be a major contributor to the local economy through property taxes that support schools, roads, and critical public services for the residents of Fairfield County,” said Dan Gatlin, vice president of Nuclear Operations at V.C. Summer. The article doesn’t say, but I wager Summer is one of the larger employers in Fairfield County , so it has value beyond paying property taxes. And beyond property taxes and employment opportunities, Summer also provides a economic root system for all kinds o...

To every debate, there are two sides of the coin. How will nuclear energy stack up in a post-Fukushima world? Heads—nuclear energy will continue to prosper and become even safer despite potential regulatory hurdles that could befall the industry. Tails—Fukushima’s impact on the industry will force new nuclear energy production to come to a screeching halt. David Crane , president and CEO of NRG Energy , believes that the future outlook for nuclear energy is “dim.” The Hartford Business Journal writes : America’s long-term energy future lies with both large- and small-scale solar and wind generation, especially solar, backed up by baseload and peaker power plants using a variety of fuels, Crane said. The bulk of that back-up fuel source was supposed to be nuclear power, he said, but after the Japanese nuclear disaster in March, the regulatory burdens make expanded nuclear nearly impossible. The Journal continues: The problem with nuclear isn’t the typical not-in-my-backyard nei...

Yesterday, SCANA held an Analyst Day that mostly talked about the construction of the two nuclear units at their Summer station. Here’s the link to the 164 page slide deck (18 mega-byte pdf). Below are a few noteworthy slides. The first slide to mention is “Why Nuclear?” If you look at the chart at the top right of the slide below, SCANA provided their all-in cost estimates for nuclear ($76/MWh), natural gas ($81/MWh), coal ($117/MWh), offshore wind ($292/MWh) and solar ($437/MWh). For them, “new nuclear continues to be the low cost alternative for customers.” Here are two slides, of many, showing construction at the site. Also worth mentioning is the slide showing where SCANA is purchasing the supplies around the world to construct the units. And, below is a picture of one of the AP1000s being built in China that is 2.5 years ahead of SCANA’s construction schedule. They are, of course, sharing lessons between each other. There is definitely much more to perus...

Is the expansion of nuclear energy stopped in its tracks in light of Constellation Energy’s withdrawing from the loan guarantee process? Not so fast . Brain Wheeler at Power-Gen checks in with several companies to see what’s happening. Here’s NRG: Although many may see the Calvert Cliffs 3 and the South Texas Project (STP) as very similar, [NRG spokesman David] Knox said there are in fact more differences than similarities in the two. He said that by selecting a reactor that has already been built … [in Japan], it decreases the amount of risk when building a nuclear plant. NRG expects to receive a license from NRC in 2012 and said that both planned units at STP would cost roughly $10 billion, total. What Knox is getting at is that Constellation and NRG’s projects are different enough to result in a different, better OMB [Office of Management and Budget ] score for STP. This may or may not prove to be true – the major argument to be made here is that OMB uses a formula for ca...

Yesterday, SCANA held its Spring 2010 analyst meeting which provided an update on the progress of Summer nuclear units 2 & 3. Among the wealth of new pictures (pdf) and stats, the biggest pieces of news are that the project is slightly under budget and may come in almost $1B less than planned once completed (still early though). Here’s Steve Byrne (pdf) - SCANA Corp.’s Executive VP and Chief Nuclear Officer (p. 26): Quick cost update; this is a total project cost which includes for us escalation and contingencies. So generally our contract was negotiated in 2007 dollars, here what you're seeing are escalated numbers [chart below]. The project to-date should have spent about a little over $1 billion, we spent a little under $1 billion. You can see that the project budget is about 10.6 based on the current escalation factors; we think we're going to come in at about 9.8. Those numbers are going to change. I don't get too excited about them dropping or raising...

By now I’m sure most readers here have heard that NRG’s cost estimates to build two new reactors at South Texas Project increased around $4 billion just recently. Apparently quite a bit of the increase was due to a weaker dollar. From the Wall Street Journal : Dollar weakness helped drive up cost estimates for two new reactors NRG Energy Inc. (NRG) is planning in Texas with Toshiba Corp. An NRG executive said last month the cost of equipment and materials from Japan climbed 13% to an estimated $2.5 billion compared with a 2007 estimate, mostly due to declines in the dollar. … Currency risk is just one variable for developers. Scana and Southern already have taken steps to eliminate the risk by using dollar-dominated contracts. For other projects, currency fluctuation typically is viewed as part of the larger issue of construction costs. Developers are trying to balance the massive cost and lengthy construction timetable with a tricky outlook for power demand and prices. ...

On a crisp morning in 1937, if you asked him, he may have gone with you and his other friends to a fishing spot just over that hill. But to support his disabled father, and his mother and siblings, Virgil Clifton Summer, Jr., graduated from high school and went to work. The Parr Steam Plant had given him a job: sweeping floors and mowing grass. He was then just 16 years old. After four years as a Navy sailor in World War 2, a college degree, professional engineering license, and a couple decades of hard work back at South Carolina Electric & Gas, he became SCANA’s Chairman, President, and CEO. In 1971, the board named the company’s first nuclear plant for him. Everyone’s heard of Summer 1, and many remember Chairman Summer the gentleman. And now comes the next generation, bearing the same proud name as the original. In Sept ember, the South Carolina Public Service Commission granted SCE&G’s application for a 1.1 percent increase in retail electric rates to help pay for ...

Some positive signs that nuclear utilities can continue to receive positive ratings even while they finance new nuclear plants for the first time in decades: Wells Fargo upgrades SCANA to Outperform from Market Perform Wells analyst says, "YTD, SCG shares have underperformed the Regulated Electrics (total return +2% vs. +9%). Shares trade at 11.3X our 10E EPS, a modest discount to the peer group median of 11.8X. We view the valuation as attractive given a comparatively constructive regulatory environment and potential for above-average long-term EPS growth prospects ... Comfortable with Nuclear Strategy. SCG plans to participate in the development of two regulated nuclear units at a cost of $6.3B, raising legitimate concerns regarding financing and construction. We have carefully considered the risks and are comfortable with SCG’s strategy based on a highly constructive political & regulatory environment, manageable financing needs stretched out over 10 years, strong partners...

SCANA ( SCG ) subsidiary, South Carolina Electric & Gas , announced Tuesday that they had reached a contractual agreement with Westinghouse and the Shaw Group ( SGR ) to design and build two 1,117-megawatt nuclear power plants at the Virgil C. Summer Station near Jenkinsville, SC. The AP 1000 reactors are slated to become operational in 2016. Tuesday after-hours trading was up for SGR and SCG. The Wall St. love continued Wednesday: Shaw Group shares rose $3.42 (5.9%), SCANA shares were up 25 cents (.62%).

Over the past few days we've seen a number of announcements that have given some folks pause over the near-term prospects for a resurgence in the American nuclear energy industry. In particular, we've seen both SCANA in South Carolina and a group in Idaho headed by Warren Buffet pull away from plans to build reactors. For some insight into why these decisions were made, I asked NEI's Vice President of Policy Development, Richard J. Myers , to weigh in with his thoughts: We’ve seen a couple of announcements over the last few days that various companies are adjusting their plans for new nuclear generating capacity. Mid-American Energy announced that it will not pursue development of a new nuclear plant in Idaho – partly due to concerns about cost, partly because of difficulties in coming to terms with suppliers over risk-sharing. South Carolina Electric & Gas and Santee Cooper also announced that they would defer their application for a construction/operating lice...