May 21, 2012

Nuclear Power Cost Increases - FL & GA

When Progress Energy announced their plans to build 2 nuclear reactors in Florida in 2009, the initial cost estimate was $14 billion. At the time, they expected to put the first reactor in service in 2016. 

Progress Energy has now announced that the cost estimate for building the 2 nuclear reactors has risen to between $19 billion and $24 billion. They now expect to put the first reactor in service in 2024 with the 2nd reactor going into service about 18 months later. 

The 2 reactors will produce 2.2 GW of power, which works out to about $10.85 / watt if the costs rise to the $24 billion cost estimate provided by the company. 

Progress Energy is planning to charge its customers a $5.09 nuclear cost recovery fee for every 1,000 kWh of electricity they buy. This is up from the $2.86 nuclear cost recovery fee they are currently charging. So ratepayers get to pay $5 a month for the next 12 years for nuclear energy they won't receive for at least another 12 years. That means ratepayers using 1,000 kWh per month will have paid over $800 to Progress Energy for these plants by the time they go into service. 

In a somewhat related situation, Progress Energy also announced in October of 2009 that they had shut down their Crystal River nuclear plant because they had found cracks in the containment wall. Progress Energy does not expect to be able to repair and restart that plant until 2014

The financial risk associated with these plants is passed on to the rate payers. 

Georgia Power says new reactors will be cheaper, but electricity will be delayed -

A Higher Price Tag for a Nuclear Project -

Delays increase reactor costs - but lower financing costs more than make up the difference. 
Delays and construction problems increase costs $900M, but financing costs go down by $2B. 

Overall costs are $1B lower than expected 4 years ago. 

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