Friday, March 16, 2012

Updated: WSJ Story Indicates that Georgia And South Carolina Nuclear Reactors May Already Have $400 Million Overrun

Buried in a great story today on the front page of the Wall Street Journal by Rebecca Smith entitled, "Cheap Natural Gas Unplugs U.S. Nuclear-Power Revival," is the following about 2 nuclear reactors being built in Georgia:  "Nagging cost worries, however, are creating friction on both projects. Shaw Group, a Baton Rouge-based construction company hired by both Southern and Scana to build their reactors, recently notified the two utilities it had unanticipated costs, which may exceed $400 million for the two companies, and wants to discuss who should absorb them." 

History truly does repeat itself in the new nuclear construction world.  Just this cost over-run of $400 million that will be the first of many could build a 450 megawatt natural gas plant. 

And I bet that I know who will likely absorb this first $400 million increased cost: the monopoly, captured electricity ratepayers in Georgia and South Carolina.  In the case of the Georgia ratepayers, they have been and already are paying each month a nuclear construction surcharge for plants that may operate in 2016 or 2017.

Note: This story was updated based on communications from Mark Williams at Georgia Power.  The original version indicated incorrectly that the $400 million overrun was for costs at just the Georgia plants.  The story indicates that the $400 million of unanticipated costs are for both the South Carolina and Georgia plants, without any detail about the specific amounts for each.

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