Nuclear revolving door gobbles up billions of dollars of Georgia ratepayers' money

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"

As 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.

Speaking out against foreign ownership of U.S. atomic reactors

Recently elected to the U.S. Senate, Ed Markey (D-MA) has watchdogged the nuclear industry for four decades while serving in the U.S. House of Representatives. Today, he has spokean out against NRC weakening its rules on foreign ownership of U.S. atomic reactors.For several long years, an environmental coalition comprised of NIRS, Beyond Nuclear, Public Citizen, and Southern Maryland CARES co-intervened against the proposed new atomic reactor at Calvert Cliffs, Maryland on the Chesapeake Bay, and won. The death blow in the U.S. Nuclear Regulatory Commission (NRC) licensing proceeding was dealt by a contention against foreign ownership of U.S. atomic reactors, argued pro se by NIRS executive director Michael Mariotte. Baltimore-based Constellation Energy abandoned the project, leaving French government-owned Electricite de France (EDF) holding the bag with 100% ownership stakes, a clear violation of the U.S. Atomic Energy Act of 1954. Reading the writing on the walls, no other U.S. nuclear utility stepped forward to fill the void. The project was doomed, and ultimately defeated.

As NIRS states in its press release below, "Earlier this week, EDF announced that it is permanently leaving the U.S. nuclear power market and will no longer attempt to build new reactors here."

Now NRC is trying to loosen its rules prohibiting foreign ownership of U.S. reactors. NIRS put out the following message:

"[T]oday NIRS submitted lengthy comments to the NRC--supported by 65 other groups [including Beyond Nuclear] -- urging the strengthening of the rules implementing the Atomic Energy Act's ban on foreign ownership, control or domination. The legislative history of the Act shows that Congress intended that no more than about 25% of a reactor can be foreign-owned, but the NRC has moved far away from that over the years. It's time that the agency do what Congress intended and actively prevent foreign control of U.S. nuclear reactors. Here is a press release about the comments; here are the comments themselves (pdf); and here are comments submitted today by Sen. Ed Markey (D-Mass.) [photo, above left] (also pdf).

The NRC is planning a webinar on the issue on August 21. Here is the information; contact the NRC if you'd like to speak during this meeting."

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#

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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