In this pho[auth] to taken Tuesday, Dec. 11, 2012 part of the containment vessel for a new nuclear reactor at the Plant Vogtle nuclear power plant is shown under construction in Augusta, Ga., With the cost of nuclear plants rising, a handful of state officials are showing signs of buyer’s regret. The reservations come as two of the three nuclear plants under construction have faced cost overruns just as electricity generated by natural gas has gotten cheaper. (AP Photo/John Bazemore)
ATLANTA (AP) — As the cost of building a new nuclear plant soars, there are signs of buyer’s remorse.
The second-guessing from officials in Georgia and Florida is a sign that maybe the nation is not quite ready for a nuclear renaissance. On top of construction costs running much higher than expected, the price of natural gas has plummeted, making it tough for nuclear plants to compete in the energy market.
In Georgia last week, Southern Co. told regulators it needed to raise its construction budget for Plant Vogtle in eastern Georgia by $737 million to $6.85 billion. At about the same time, a Georgia lawmaker sought to penalize the company for going over budget, announcing a proposal to cut into Southern Co.’s profits by trimming some of the money its subsidiary Georgia Power makes.
The legislation has a coalition of tea party, conservative and consumer advocacy groups behind it, but faces a tough sale in the Republican-controlled General Assembly. GOP Rep. Jeff Chapman found just a single co-sponsor, Democratic Rep. Karla Drenner.
As a regulated monopoly, Georgia Power currently earns about 11 percent in profits when it invests its own money into power projects. Chapman’s legislation would reduce those profits if the nuclear project is over budget, as is the current projection.
“Conservatives do not believe in incentivizing failure,” Debbie Dooley, a co-founder of the Atlanta Tea Party, recently told Georgia lawmakers. “They should not profit from this mistake.”
Southern Co. has said the nuclear plant is still a better economic deal than the alternatives over the long run.
In Florida, lawmakers want to end the practice of utilities collecting fees from customers before any electricity is produced.
“The price tag keeps going up. The timeframe they are going to build it has been extended year after year after year,” said state Rep. Mike Fasano, a Republican and self-described nuclear power supporter.
Fasano’s bill would eliminate advance collections; a Democratic lawmaker filed a similar proposal.
“A lot of people are paying for something that they’ll never see any return on their money,” Fasano said.
The fees have also been targeted in court, but the Florida Supreme Court has not yet ruled on whether to overturn them.
Southern Co. also benefits from advanced collections, though Georgia lawmakers have not focused on that money.
The Florida Public Service Commission voted in November to allow the state’s two largest utilities to charge customers for $294 million this year for the costs of future nuclear facilities.
Progress Energy Florida, which has been purchased by North Carolina-based Duke Energy, has collected more than $819 million from its customers for two nuclear projects, according to the Florida Public Service Commission.
One was to expand the capacity of the now-crippled Crystal River plant, work that resulted in damage that shut down the facility.
The utility was also using the fee to pursue a new nuclear plant in Levy County.
Progress Energy Florida still needs a license for the plant from federal regulators and pushed back the opening of the first Levy County reactor to 2024. Some question whether it will be built at all.
Four GOP senators in Florida said recently they will seek to put limits on the collections. Lawmakers said their upcoming bill will set a deadline for utilities to start construction and make sure power companies cannot earn a profit off any prepayments if they do not build a nuclear facility.
“On the details, there is plenty of room for conversation,” Sen. John Legg said at a Feb. 21 news conference. “But on these three principles there will be no room for compromise.”
AP reporter Bill Kaczor contributed to this report from Tallahassee, Fla.