Going Nuclear?

Some Southeast Utilities Continue Forward With Nuclear Plans

By Pam Radtke Russell

While plans for a new nuclear reactor in Idaho have been scrapped, and other utilities have expressed caution over the rising costs of new nuclear plants, utilities in the Southeast – particularly in Florida – are moving forward with plans for new reactors, which, according to one company’s estimate, could cost as much as $12 billion each.

No final decisions have been made by any company proposing new nuclear units.

Still, some regional utilities are moving forward with the regulatory process, have decided on the types of units they would build and have committed millions of dollars to purchasing long-lead time items. Some have even signed contracts and started preliminary work at the proposed sites.

Population growth is driving decisions on new reactors throughout the Southeast. Of the 33 new reactor units expected to be built in the United States over the next decade, 12 are in Florida, Georgia, North Carolina or South Carolina. Four southeastern utilities have already filed applications for new reactors with the Nuclear Regulatory Commission.

advertisement

Juno Beach, Fla.-based Florida Power & Light and St. Petersburg, Fla.-based Progress Energy have yet to file with the NRC, but they have gone in front of the Florida Public Service Commission with hard estimates about how much the units will cost. The utilities make no apologies for the cost of the multibillion dollar units they have proposed, saying that nuclear is the best option to provide base-load electricity – or power that’s on 24 hours a day.

Florida, like other states, has recently rejected new coal plants because of concerns over the carbon dioxide emissions, and utilities are leery of building natural gas plants because of the rising cost of that commodity. That leaves nuclear as the only option, says Adrian Heymer, senior director for new plant deployment for the Nuclear Energy Institute.

The Florida Public Service Commission seems to agree. In March, the PSC approved FPL’s plans for two new units at Turkey Point in South Florida. Though the utility estimated the costs for two new units would range from $12 billion to $24 billion, the PSC determined that the units are needed and would provide savings to the company’s customers.

“Trends indicate there will be a substantial need for more power in FPL’s service territory, and these new nuclear units can help meet that need,” says PSC Chairman Matthew M. Carter II. “The nuclear units will provide a clean, noncarbon-emitting source of base-load power to meet Florida’s growing energy needs.”

FPL is expected to file its application for combined construction and operating license application with the Nuclear Regulatory Commission in 2009.

Progress Energy has also requested the PSC approve the need for two new units on a greenfield site in Levy County, Fla. In its filing with the PSC, the company estimates that the two units will cost about $14 billion and an additional $3 billion for 200 mi of transmission lines and related components. The PSC is expected to make a decision on that case over the summer.

If the PSC approves Progress’ case for the new units, the company expects to file for its combined construction and operating license, or COL, late this summer, says Buddy Eller, a spokesman for Progress Energy.

Progress has already filed a COL for a site in North Carolina, but Florida’s population growth warrants that the Levy County site is built first, Eller says.

Heymer says population growth, the reluctance to build new fossil-fuel plants, the low cost of nuclear fuel and the high efficiency of nuclear plants are the primary reasons utilities are looking at new nuclear reactors. But legislation, incentives and familiarity in the Southeast are also helping to spur development of new units in the region, he says.

In addition to the billions of incentives and loan guarantees offered in the 2005 Energy Policy Act, several states, including Florida, have adopted laws that allow utilities to charge customers for the nuclear units before they come online. Traditionally, utilities can only charge customers for a plant after it’s in service. The utilities say such cost-recovery mechanisms are necessary to secure the financing for the multibillion dollar plants.

It helps, too, that the Southeast is already familiar with nuclear plants. South Carolina, for example, gets about 50% of its power from nuclear energy, according to the Energy Information Agency. Units proposed in the region are either located at existing nuclear plants or near existing plants.

Of the nine utilities that have filed for a COL from the NRC, four of them are from the four-state Southeastern region: Duke Energy for two new units in Cherokee, S.C.; Progress Energy for two new units in Harris County, N.C.; South Carolina Electric and Gas for two new units at its Summer plant near Jenkinsville, S.C.; and Southern Nuclear for two new units at its existing Vogtle site near Waynesboro. Ga.

In April, Southern Co. of Atlanta announced that it had entered an engineering, procurement and construction contract with Westinghouse Electric Co. and the Shaw Group of Baton Rouge, La., to build the reactors at Vogtle. It is the first company to enter into such a contract for a new unit.

The earliest any of the units are expected to come online is 2016. But some sitework is already being done.

For instance, in preparation for construction, Duke has demolished a partially built nuclear reactor in South Carolina that was scrapped during the last round of nuclear construction, says Rita Sipe, a spokesperson for Duke Nuclear.

Heymer says the NEI expects that some preconstruction work on the sites will begin late this year, but most of that work, such as building roads, fabrication facilities, concrete plants and shipping canals will begin next year. The utilities will have 18 months to two years of preconstruction activity before the first concrete is poured, likely in 2011, he says.