Nuclear revolving door gobbles up billions of dollars of ratepayers' money, threatening to move onto taxpayers next!

Commissioner Geoffrey Merrifield's NRC file photoWhile still a U.S. Nuclear Regulatory Commission (NRC) Commissioner, Geoffrey Merrifield did the nuclear power industry a big favor. He spearheaded a seemingly simple, but significant, change in NRC regulations, which paved the way for new reactor construction, unfettered by bothersome environmental safeguards. Merrifield shephered through a change in the definition of the word "construction." Now, nuclear utilities could build any aspect of a nuclear power plant, save for the reactor and its containment building, without having to first complete an environmental impact statement, as required by the National Environmental Policy Act (NEPA). Thus, large aspects of a new reactor construction job -- such as foundation excavations for the reactor complex, or construction of the turbine building -- could proceed apace, building "facts on the ground," and momentum that would be hard to stop.

Merrifield capped such corruption by leaving NRC immediately after his dirty work, and going to work for the Shaw Group, which specializes in -- you guessed it -- new reactor construction! This example of the nuclear revolving door between supposed government regulator and industry even made a number of senior managers at NRC uneasy about Merrifield's blatant, self-serving conflict of interest.

Now, as reported by the Atlanta Progressive News, to such corruption must be added incompetence, raising not only financial risks, into the billions of dollars, but radiological risks that could impact millions of lives:

'...Chicago Bridge and Iron (CB&I), formerly known as Shaw Modular Solutions, makes modules being used to assemble four Westinghouse AP1000 reactors being built at Plant Vogtle in Georgia and V.C. Summer in South Carolina.

“CB&I is unable to provide properly constructed modules... and [have demonstrated a] continued inability to reliably meet the quality and schedule requirements of the project," Barbara Antonoplos, a ratepayer, testified, citing a report from the utility's regulatory staff in South Carolina.

"These problems have existed from the beginning and been raised in every other CB&I hearing and still there is no fix... they [Georgia Power] still do not have a competent outfit making parts and once the new parts get delivered to Vogtle, they are repairing them to make them acceptable.  This alarms me because incompetence of this magnitude breeds disaster especially when it comes to construction of a nuclear device. There is no way these reactors can be considered safe... when ‘patch it together’ is the best construction model they are able to come up with," Antonoplos said.

"Ongoing failures of this sort result in escalating cost and I don't believe you should force ratepayers to foot the bill for such gross incompetence," Antonoplos said.

Southern Company’s projections do not include the cost of the lawsuit they’re engaged in with their contractor, The Shaw Group/Chicago Bridge and Iron, nor the full cost of not getting Federal Loan Guarantees, for which the negotiation deadline has been extended three times according to Georgia WAND's website...'

Alex Flint, NEI's Senior Vice President for Governmental AffairsSpeaking of nuclear revolving doors and federal loan guarantees, the top lobbyist for the nuclear power industry, Alex Flint at the Nuclear Energy Institute (NEI, photo left), has passed through multiple times. For one, he "served" as the staff director on the U.S. Senate Energy and Natural Resources (ENR) Committee, under Sen. Pete Domenici (R-NM), on whose personal staff Flint had previously "served." The ENR Committee hatched the passage of the Energy Policy Act of 2005. In addition to the $13 billion of direct taxpayer subsidies in that bill aimed at promoting new atomic reactor development, Flint wrote the federal nuclear loan guarantee language. After the bill was enacted into law, Flint left "public service" and went to work at NEI, where he remains to this day.

In a very real sense, Flint wrote his own (likely high six-figure, if not more) paycheck, while "serving the public" -- up for dinner to the nuclear industry, that is!

In late 2007, $18.5 billion for new reactor loan guarantees, and another $4 billion in new uranium enrichment loan guarantees, were approved by Congress and George W. Bush. However, even though President Obama, in Feb. 2010, awarded $8.3 billion in new reactor loan guarantees for the proposed new Vogtle 3 & 4 reactors -- giving it the highest profile possible, by making the announcement himself -- Southern Co. has never agreed to the terms. Too much of its own "skin in the game" is being asked of it, for such a financially risky scheme. Thus, no nuclear loan guarantees have yet been finalized.

"Advocates, Ratepayers Oppose Paying for Vogtle’s Cost Overruns"

Southern Co. photo of the proposed new reactors construction site at Plant Vogtle -- a giant rat hole down which billions of dollars of ratepayer money are being pouredAs reported by the Atlanta Progressive News, Georgia ratepayers, as well as groups such as Georgia Women's Action for New Directions and Nuclear Watch South, have testified before the Georgia Public Service Commission (PSC) against billion dollar cost overruns at Southern Company's construction site for proposed new reactors from being foisted onto customers' electricity bills:

'..."Many of the cost overruns are the result of mismanagement.  The company has said less than one percent of the increases in costs are from engineering procurement and construction.  These costs are results from mismanagement in paperwork and scheduling delays," Courtney Hanson, Director of Public Outreach at Georgia Women's Action for New Directions (Georgia WAND), testified.

"Southern Company jumped the gun in seeking license for the whole project and the cost accrued because of design changes and license amendment requests.  They were not prepared when the process started and the cost reflects that.  This is a problem that happens over and over," John Michael, a ratepayer, testified.

"The cost overrun is not a new story and it is unfair for these cost overruns to be continually passed on to the ratepayers.  Last time [with Vogtle units one and two] we were promised four reactors for six hundred million dollars and we got two for over eight billion.  A company will never reduce costs if they continually have a blank check written to them," Amanda Hill-Attkisson, Managing Director of Georgia WAND, testified...

[Steve] Prenovitz, an expert in economics with Nuclear Watch South, challenged continuing the Vogtle project.  He raised the question over whether the public would be better served by cutting their losses on Vogtle before massive cost overruns in the future reach stratospheric numbers.'

"Thank you, Tallahassee, for making us pay so much for nothing"

Tampa Bay Times Business Columnist, Robert Trigaux, has let Florida state legislators and the Public Service Commission have it "for passing a law forcing Duke Energy customers to pay up to $1.5 billion in higher rates for a long proposed nuclear power plant in Levy County that will not be built...And no, Florida customers, you're not getting any of that money back."

Trigaux continues "The real reason the witless sheep in Tally let this happen is that power companies wanted to shift both the cost and the risk of building a nuclear plant on to its customers and off of its shareholders...Nowhere in the country do you see big Wall Street firms or banks lending billions of dollars to electric utilities for nuclear plants. The risk is too high. The recent history of building nuclear plants is plagued with fantastic delays and enormous cost overruns."

His column is an excellent exposé on "advance fee recovery" or CWIP -- Construction Work in Progress -- which is illegal in most states. In Indiana in the 1980s, for example, Citizen Action Coalition successfully sued the Hoosier State's would-be nuclear utilities for making illegal CWIP charges on ratepayers' electricity bills. The court ruled the utilities had to return hundreds of millions of dollars to ratepayers. Two nuclear power plants, at Bailey and Marble Hill, were stopped dead in their tracks.

In 1976, Kay Drey -- now a Beyond Nuclear board member -- helped lead a statewide referendum making CWIP illegal in Missouri, a law, enacted through grassroots democracy at its best, that still stands. In Iowa, Mike Carberry, of Green State Solutions and Friends of the Earth, has helped lead an environmental/ratepayer coalition which has successfully fended off nuclear lobbyists at the state capital for several years, blocking legalization of nuclear CWIP.

But CWIP has been made legal in several southeastern states, thanks to nuclear industry lobbyists' sway over state legislators and governors' mansions there. Floridians have now learned the hard way why nuclear CWIP is a really bad idea. But Georgians and South Carolinians are beginning to learn the same hard lesson. Even Georgia's Republican governor has suggested that Southern Co. shareholders should eat some of the major, all-too-predictible cost escalations at Vogtle 3 & 4; South Carolinians have seen a half-dozen rate increases in just the past few years, all going towards keeping up with Summer 2 & 3's skyrocketing pricetag.

SACE Statement on Duke Energy Florida’s Cancellation of Levy County Nuclear Reactor Project

Contact: Jennifer Rennicks, Director of Policy & Communications, 865.235.1448, jennifer@cleanenergy.org

St. Petersburg, Fla.///NEWS STATEMENT/// Duke Energy Florida (DEF) today filed a motion with the Florida Public Service Commission to approve a settlement agreement that will cancel its proposed Levy County nuclear reactor project.

The project’s estimated cost to build two Toshiba-Westinghouse AP1000 reactors had skyrocketed by 400% to $24 billion from initial estimated costs of approximately $5 billion per reactor and the original in-service dates were delayed by at least eight years. The motion was filed in the annual nuclear cost recovery clause docket – which is set to begin Monday - that considers approval of costs related to proposed new nuclear generation and determines the reasonableness of projected costs.

 

According to Florida Public Service Commission staff testimony in this year’s docket, “As of December 31, 2012, DEF has spent approximately $962 million on the Levy project including AFUDC” (Allowance for Funds Used During Construction). Duke has not yet recovered this entire amount from the Commission. Hearings on the 2013 docket for Duke and FPL, which is also pursuing two new nuclear reactors at their existing Turkey Point plant near Miami, are scheduled to begin next week.

Dr. Stephen A. Smith, executive director of Southern Alliance for Clean Energy, issued this statement about today’s decision to cancel the proposed Levy County nuclear reactor project:

 

“We welcome Duke Energy’s announcement today that they are seeking approval to cancel the controversial Levy County nuclear reactor project.  Since the merger, Duke’s leadership has taken a fresh look at these unnecessary nuclear projects and has absolutely made the right decision for Florida consumers.

While important details are still being resolved, Florida consumers should rejoice in knowing that the fleecing associated with this nuclear project will end. The time has come to stop throwing good money after bad.

SACE has long opposed this project and the nuclear tax recovery mechanisms that have been associated with it. SACE supports the need for Duke and FPL to have exit plans for these unnecessary reactors, however, we must stay vigilant in protecting consumers as the projects wind down.

The FL PSC has been negligent in its protection of Florida ratepayers and as these projects are cancelled, the Commission must stand strong in defense of consumers. But we also must ensure that the utilities do not continue to pursue high-risk, unnecessary projects as if there were no viable exit strategy.”

Join us for a media availability call tomorrow, Friday, August 2 at 11:00 a.m. EDT to speak with SACE experts on this case and today’s decision.

WHEN: Friday, August 2, 11:00 a.m. EDT

 

WHO:

Dr. Stephen Smith, Executive Director, Southern Alliance for Clean Energy

George Cavros, Florida Energy Policy Attorney, Southern Alliance for Clean Energy

Sara Barczak, High Risk Energy Director, Southern Alliance for Clean Energy

 

WHERE: Conference Dial-in Number: (605) 475-4000; Participant Access Code: 663387#

# # #

Founded in 1985, the Southern Alliance for Clean Energy is a nonprofit organization that promotes responsible energy choices that create global warming solutions and ensure clean, safe, and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org

Environmental interveners respond to Duke's cancellation of proposed new reactors at Levy County, FL

Washington, D.C.-based attorney, Diane Curran, represented environmental interveners NIRS and Ecology Party of Florida against the now-cancelled proposed new reactors at Levy Co., FLThe Ecology Party of Florida and NIRS, environmental interveners against Duke/Progress Energy's proposed new reactors at Levy County, FL, have responded to the announced cancellation:

The Ecology Party of Florida could not be happier that the proposed nuclear plant scheduled for construction in Levy County, Florida (LNP), has been cancelled by Duke Energy, which acquired Progress Energy Florida (PEF), the LNP applicant.  The Ecology Party, along with Nuclear Information and Resource Service (NIRS) waged a five-year battle within the confines of the Nuclear Regulatory Commission’s  (NRC) rigged system, challenging the construction of the plant. The challenge was based primarily on the fact that the water modeling used was unsuited for the karst geology at the site and that in combination with other mining projects in the area, including the nearby proposed King Road Tarmac mine which would have supplied materials for the plant. Due to this failing, the proposed LNP  would have irreparably harmed the aquifer, source of drinking water for the area. Dewatering the area further than it already has been would have resulted in impacts far more serious and far-reaching than those alleged by Progress and the NRC Staff.  The two groups presented evidence that any predictions in the Environmental Impact Statement (EIS) were inadequate and that the destructive consequences of withdrawing millions of gallons of water from the aquifer each day, as well as drawing all fresh water from the abandoned Cross Florida Barge Canal and its estuary in the Gulf had been grossly underestimated.

The Army Corps of Engineers (Corps) had not yet issued the necessary permit for the destruction of wetlands at the site and the Ecology Party, its members, and Hydroecologist Dr. Sydney Bacchus, primary expert for the Ecology Party, have been extremely active in opposing the project in the Corps' process. We believe our opposition and the compelling evidence we've submitted has had a bearing on the decision.

In response to news of the abandoned LNP project, Dr. Bacchus's reaction was, "This is an excellent example of what can be accomplished when the public refuses to accept false and inaccurate information fed to agencies by consultants and instead fights to have the truth exposed. I hope this will serve as a role model for future grass-root battles."

Diane Curran [photo, above left], who represented the Ecology Party and NIRS said, “It is great news for the environment that PEF apparently thinks Levy would be an economic disaster.  It would have been an even bigger disaster for the fragile wetlands where PEF wanted to build the reactors.”

Cara Campbell, Chair of the Ecology Party, pointed out, “The cost of this debacle had risen from 4 Billion dollars to 25 Billion. How much were the ratepayers of Florida expected to take?”

"The people, animals, plants and waters of the Nature Coast are figuratively sighing with relief that an area of recreation and sanctuary, the Nature Coast, will be nuclear-free!" said Mary Olson of Nuclear Information and Resource Service who supported efforts by Florida activists to intervene in the proposed Levy County 1 & 2 nuclear license.

Michael Mariotte, Executive Director of Nuclear Information and Resource Service (NIRS), added:

"The nuclear renaissance is in shambles. Earlier this week, the world's largest nuclear company, Electricite De France, announced it is leaving the U.S. nuclear market having failed to build any of the reactors it was planning. Now Duke Energy is giving up on the most expensive nuclear project ever proposed--and the only "greenfields" site in the supposed nuclear revival. The basic truths about nuclear power outweigh the fantasies of nuclear boosters: it remains too dirty, dangerous and expensive to be a viable source of new electricity."