Cost Makes Adding New Nuclear Power Plants Unthinkable

On Friday, May 31, U.S. Department of Energy (DOE) Secretary Jennifer Granholm flew to Georgia to attend a ribbon-cutting ceremony for Plant Vogtle, the first set of nuclear reactors built in the U.S. in nearly 30 years, where she called for another 198 large-scale reactors to follow. There is a lot I don’t understand in the world, but how a state that is supposed to regulate a monopoly utility in the public interest would allow Georgia Power to build a $36 billion nuclear facility that is 10 times more expensive than equivalent generation, go $20 billion over budget, take 15 years to build, and still seen as an achievement is something I do not understand.

COMMENTARY

Of course, Plant Vogtle was completed—if there is no limit to what can be spent, as there wasn’t for this plant, then nearly anything can get built. But at what cost? The fact that the Georgia Public Service Commission (PSC) put in place no ratepayer protections from cost overruns and put the bulk of those overruns into the rate base, driving the largest rate increase in state history, is one of the biggest failures of the monopoly-regulatory compact that one could imagine.

The enormous costs for this project and the disappearance of ratepayers from the evaluation of its success are upsetting to me, but even more dismaying was learning about POWER’s Plant of the Year award for Plant Vogtle. Surely, POWER’s editors know that a $20 billion cost overrun is a substantial construction failure? In what scenario would anyone consider a contractor’s $100,000 estimate to build a house that actually cost $250,000 a success?

The reasons for Vogtle’s cost overruns are well-documented in PSC filings written by independent construction monitors with nuclear engineering and construction knowledge, and were widely reported in media. Reasons included poor decision-making, lax oversight, shoddy construction, and failure to create a real project schedule. COVID had less than a 1% impact on the budget.

Widely reported failures by executive and site management for Plant Vogtle seem to have been forgotten now that it’s done. But they have not been forgotten by the people of Georgia, whose bills containing Vogtle’s summer rates are just now hitting mailboxes. My first post-Vogtle electric bill shows an astonishing 35.8% increase (Figure 1).

POWER quoted John Williams, senior vice president for Vogtle 3 and 4, as being proud of their “continued alignment and clear communication between all parties as essential to our ability to complete the project.” Williams did not mention the four lawsuits filed by those partners against Georgia Power seeking to limit their financial risk or exit their partnership agreement altogether (Figure 2). That does not sound like alignment to me.

Just prior to giving Plant Vogtle its Plant of the Year award, POWER published an essay from Georgia Commissioner Tim Echols, one of Plant Vogtle’s biggest supporters, titled “Nuclear Energy—A Technology That Must Be Continued.” In that essay, Commissioner Echols wrote about geopolitical issues and the importance of American leadership against Russian and Chinese dominance in nuclear energy technology. Do we still fancy ourselves as conquerors and renegades who must compete for world domination in a technology because our enemies are ahead of us in that one area? Even if that answer is yes, those are inappropriate concerns for a state commissioner paid with state taxes whose responsibility is to regulate Georgia’s monopoly utility in the public interest. That’s why we have a federal government.

One of the PSC’s mandates, as written in Georgia’s code, is to set just and reasonable rates. They did not do that. Far more affordable options for generating 2,200 MW of energy were dismissed throughout this project, even as PSC staff (Figure 3) and experts repeatedly called for the project to be cancelled to prevent further financial harm to ratepayers.

POWER’s Plant of the Year award concludes with a quote from Georgia Power’s Chief Financial Officer Aaron Abramovitz, “When you consider the timeline and scale of the project, and the challenges we overcame, it’s truly a monumental accomplishment.”

But that statement is deeply misleading. The timeline of the project accrued to Georgia Power’s benefit because Georgia’s commission allowed Georgia Power to profit from delays. They never abated the early financing construction tariff on customers’ electric bills throughout the 15-year project, so the seven-year schedule delay delivered billions in extra profits to the utility while costing each Georgia Power customer about $1,000 before any electricity was produced.

There are many opinions and views about Plant Vogtle from people outside of Georgia. What do people inside Georgia think? While no poll exists, public comments at Vogtle rate hearings are clear: people are angry, upset, and fearful about bill impacts.

Concerned that the narrative surrounding Plant Vogtle would be spun into gold, six Georgia organizations recently published a report called Plant Vogtle: The True Cost of Nuclear Power in the United States. The authors of the report want to ensure that a comprehensive understanding about Plant Vogtle exists in a single document that is available for everyone. Claims that future AP1000 reactors will be less expensive to build are no more credible now than they were when such claims were made in Georgia at the start of this project.

Calls for expanding nuclear energy appear to be driven by fears that the grid will not be ready for the future as artificial intelligence (AI) and data center energy demands proliferate. These fears have overwhelmed concerns that the grid must remain affordable, and creative ways to meet that demand and profit motives from those making growth projections are ignored. The U.S. economy simply cannot afford unconstrained investment by for-profit monopolies with a financial incentive to invest too much, too soon. What happened in Georgia should not happen to unsuspecting ratepayers in any other state.

—Patty Durand is the founder and president of Cool Planet Solutions.