Orlando Sentinel Slams The ‘Nuclear Tax’ Ratepayers Must Pay Progress Energy

Joke is on Progress customers stuck paying nuclear tax

Stop me if you’ve heard this one.

You and Progress Energy walk into a bar. Progress says it’s going to order $24 billion worth of drinks, but they won’t arrive until 2024. Oh, and you have to pick up the tab — even if the server drops the tray and the drinks never arrive at all

So begins a devastating Orlando Sentinel column on Progress Energy’s planned twin nuclear plants.

I wrote about these nukes three years ago — see “What do you get when you buy a nuke? You get a lot of delays and rate increases”:

When we last left Progress Energy in 2008, it had said the twin 1,100-megawatt plants it intends to build would cost $14 billion, which “triples estimates the utility offered little more than a year ago.” And that didn’t even count the 200-mile $3 billion transmission system utility needs, which brings the price up to a staggering $7,700 a kilowatt.

Under Florida law, to pay for these nuclear power plants, Progress Energy can raise the rates of its customers a $100 a year for years and years and years before they even get one kilowatt-hour from these plants. Sweet deal, no?

But as we know, “nuclear power appears to have a negative learning curve.” Heck, three years ago, French nuclear giant Areva “acknowledged that the cost of a new reactor today would be as much as … double the price offered to the Finns.”

So the 2009 Progress Energy price is just a distant memory — as was its original 2016 completion date.  As the Orlando Sentinel explained after Progress raised the projected cost the the third time five years:

The price jumped from $17 billion in 2008 to as high as $22 billion in 2011 and now up to $24 billion today. The company doesn’t expect to start producing power at the plant until 2024, eight years later than it originally thought.

And it’s possible the plant won’t be built at all.

But Progress’ customers are still paying for it each month. Expect an extra $3.45 a month on your bill next year all the way through 2017. That’s a total of $207 during the next five years, if you don’t have a calculator handy.

The nuclear tax — we might as well call it that since it’s a mandatory fee sanctioned by state government — is likely here to stay, though it’s being challenged in court.

New nuclear plants are so expensive they are likely to provide new electricity at some 15 cents per kilowatt hour (see “Nuclear power, Part 2: The price is not right“) — or even higher (see “Exclusive analysis, Part 1: The staggering cost of new nuclear power“).  The precise answer — some 50% higher than average U.S. electricity prices or more — is hard to know since it is hard to find a utility willing to stand behind a firm price in a rate hearing.

Solar power has been coming down in price so fast that it is already a better option than nuclear for those concerned about greenhouse gas emissions, especially if solar could get the same forward pricing deal. The same is true of wind power. Another option would be a hybrid concentrated solar thermal power and natural gas plant (see “World’s second* largest solar plant to be built in Florida“).

But certainly the best and cheapest ‘generation’ option for Florida is energy efficiency (see “Efficiency, Part 3: The only cheap power left“).  If you could forward bill customers for energy efficiency and do every energy efficiency measure that was cheaper than even $.06 a kilowatt hour, you wouldn’t need to build another nuclear power plant — or probably any other plant — for a long, long time.

26 Responses to Orlando Sentinel Slams The ‘Nuclear Tax’ Ratepayers Must Pay Progress Energy

  1. Raul M. says:

    Florida Power and Light did spep ahead with the hybrid solar power plant.

  2. Mark Shapiro says:

    The negative learning curve for nuclear power that you have identified is a fascinating fatal flaw for nuclear.

    What is the source of this negative learning curve? Some possibilities:

    1) The large size, long lead times, small number, and complexity of power plants means you can’t improve design iteratively. It’s the opposite of PC’s and smartphones, where each generation is the test-bed for the next.

    2) Safety regulations can never be rationalized. Not ever. Ask any free-market advocate how to optimize nuclear safety regulation. No market can answer that question.

  3. Mark Shapiro says:

    Jimmy Carter’s first important command was a pre-commissioned nuclear powered submarine, designed and built under the guidance of Admiral Hyman Rickover, a brilliant engineer, demanding leader, and the father of the nuclear navy. He built the most potent, lethal weapon system in history.

    President Carter asked Admiral Rickover his views on nuclear power in 1977. Astonishingly, Rickover said that nuclear weapons should be abolished, and even that nuclear power should be dropped completely.

    This from the man who developed a lot of this stuff.

  4. Mark Shapiro says:

    Power corrupts. Nuclear power seduces, and then corrupts.

    The evidence? Nuclear power requires big government subsidies, regulation, and bureaucracy, is monopolistic, and concentrates political and economic power. Yet it is highly favored by small-government, anti-regulation, free-market advocates.

    Someone please explain to me how this monstrous contradiction thrives, in plain sight, for decades, completely unnoticed by pundits, economists, and conservative think tanks.


  5. Solar Jim says:

    Mark, RE: “Yet it is highly favored by small-government, anti-regulation, free-market advocates.”

    This is the fraudulent perception that Eisenhower’s “military-industrial” complex wishes you to believe. The opposite is reality. Atomic fission is big government, vast regulation (including that of irradiated uranium) and forced-market.

    As just one example, if we expose this “industry” to free-market risk assessment under capitalism then the entire Ponzi scheme financially crashes. Another would be to require owners to assume all permanent debt of “nuclear waste.”

    The very idea of an atomic fission “market” is an absurdity. Only nation-state actors can mis-allocate public resources on such a scale. And by the way, this scheme derives its development from American development of atomic/nuclear weapons (which should be abolished).

  6. AA says:

    $.15/kwh would be a remarkably low price for PV, and that wouldn’t include new transmission or energy storage.

    Cost arguments about nuclear apply equally to solar. Yes, the gap is closing, but it hasn’t closed yet.

  7. Lou Grinzo says:

    Nuclear power: The most expensive, dangerous, and generally idiotic way humanity has devised (so far) to boil water.

  8. John Tucker says:

    Why do you extend your commentary to a entire field and technology when at issue is a particular energy company(s).

    I dont get that. Its not correct.

    Can you name one 100% PV generated power source. Can you name one 100% wind?

    What is the true cost if it existed? What about storage tech? What is the carbon investment?

    If its coal or gas co-generation its not clean. Probably only if the high base-load source in the background behind renewables is nuclear is it truly clean.

    With the amount of waste we have now and where technology is going some new nuclear should be expected – throwing your hands up and just letting energy companies surcharge consumers for their mistakes because it makes nuclear look bad isn’t responsible.

    Believe me it will come back to haunt us.

  9. SecularAnimist says:

    John Tucker wrote: “throwing your hands up and just letting energy companies surcharge consumers for their mistakes because it makes nuclear look bad isn’t responsible”

    Perhaps you can clarify that comment, because as written it makes no sense.

    The reality is that no “energy company” will stick a shovel in the ground to start building a new nuclear power plant unless they are absolutely guaranteed that the taxpayers and ratepayers will absorb ALL the costs and risks up front, even if the nuclear plant is never built — and especially if the nuclear power plant turns out to be unprofitable to operate once it is built.

    Which, given the rapidly plummeting costs of solar and wind, is a virtual certainty.

  10. John Tucker says:

    How do you know form this article, Post ENRON, these are even legitimate cost “overruns”? How do you know “mistakes” are even mistakes?

    How on earth is a company that cant manage leaky pipes going to run a vast array of intermittent power efficiently?

    if the nuclear power plant turns out to be unprofitable to operate once it is built.
    Which, given the rapidly plummeting costs of solar and wind, is a virtual certainty.

    And I suppose I should ask myself how are people that cant even accept the nuances of technological reality going to prevent catastrophic climate change.

  11. Raul M. says:

    Some do think that humanity will collapse in the 2020’s
    Excuse me, I mean humanity will suddenly decide to become carbon neutral and even carbon negative.
    Such a wise decision will mean that we will need to watch our ciberpennies and invest wisely in the most diversely positionable energy forms.

  12. Merrelyn Emery says:

    John, the party is over – it’s time to go home. It’s also time to start cleaning up the mess, if we knew how, ME

  13. David B. Benson says:

    One is not to generalize from one or even two examples, in this case to the cost of NPPs everywhere in the world (since Areva was mentioned and is building nothing in the USA).

    Looking at a few selected countries around the world: Vietnam has started on one NNP, is dong site preparation for another and is negotiating the countractor for a third. Then there will be at least seven more. India’s plan calls for 44+ NPPs. Even Bangladesh is having one build by the Russians, to be operated by the Russians. The same in Turkey. The UAE’s four NPPs are stil on scheudle and within budget. Excluding site preparation and transmission, these are but US$3800/kW.

    In the USA TVA continues to (slowly) complete an NPP with plans to complete another later and committed to purchasing up to 6 of B&W’s mPower SMRs.

    Southern Company filed for VC Summer with the SC state utility commission with stated all-in, including transmmision, LCOE of US$0.076. So there is an instance of a utiliity company committing to a busbar rate. Unfortunately that will be slightly increased due entirely to the delay in NRC’s approval. The units will be the 5th & 6th Westinghouse AP1000s to be completed so there is minimal risk of significant future delays in construction.

    In any case, that LCOE is considerably less than the ‘guess’ provided in this post of US$0.15. A ‘guess’ which looks more like a small customer retail rate, I might add.

    “On January 5, 2009, PEF awarded an engineering, procurement, and construction (EPC) contract to Westinghouse and The Shaw Group’s nuclear division to build the two reactors for $7.65 billion.” These AP1000s are a nameplate 1117 MW each so the actual reactor construction cost is US$3424/kW (plus some more due to licensing delays). The remainder of the significantly large costs are US$3 billion for transmission, something for the switchyard and transformers and a whoppingly large site preparation cost due to the significant civil works required at this less than fully desirable site. From the same easily found source, the total including finance changes is estimated as US$19–24 billion.

    This is a seriously distorted view of civilian nuclear power. Would the writer of this piece actually prefer to have electricity users in Florida remain dependent upon natgas for 60% of their power? Would he prefer to have Progress Energy continue to burn coal in Crystal River 1&2?

  14. David B. Benson says:

    Using the NREL simplified LCOE calculator (wherein I’ve learned how to correctly account for all the pecular aspects of NPP capital cost and operations), using a capital cost of US$7700/kW financed for 30 years at 10.8%, for the first thirty years the LCOE of the proposed Levy County NPPs is US$0.135/kWh and for the next thirty years is US$0.043/kWh.

  15. Artful Dodger says:

    True, M. But there may be a ray of hope for dealing permanently with the vast stockpile of waste/expended fuel:
    Perhaps this is where 25 Billion USD would be better spent.

  16. Raul M. says:

    Sorry typo, that should be step ahead.

  17. Raul M. says:

    Meanwhile, Florida Power and Light made a jump ahead with a new power plant. Somewhere they figured out that their new power plant will draw curiosity from all over the world.
    I do think that it is rather unusual for a type of power plant to be picked that didn’t have gross cost overruns.
    You know, chance for gross additional profits because of safety concerns etc.
    On their website video there is mention of continual benefit from using the power delivered to the power plant on a daily basis from the sun.
    Now if by chance they do have used up mirrors that they no longer want, I’m sure I could find a safe storage site for a small yearly income. Ha Ha

  18. quokka says:

    Yeah, coal is much better isn’t it?

  19. Mulga Mumblebrain says:

    In most fields of human endeavour a new process, technology or device enters the market at high price. Then further development, mass production and consumer acceptance lead to rapidly diminishing cost. This process was followed by automobiles, computers, television etc, and certainly is with renewables, particularly solar photovoltaic. One glaring exception to this rule is nuclear power, which goes on growing ever more expensive, keeps on producing ever more economically catastrophic disasters (Fukushima will, after decades of remediation, cost hundreds of billions) and still has not found a solution to the problem of safe storage of deadly waste for millennia.

  20. Mulga Mumblebrain says:

    The next Fukushima, or the evolution of the Fukushima catastrophe, will kill nuclear, forever. Even the concerted push of the huge economic and military interests and the socially controlling forces that need the threat of ‘nuclear terrorism’ amongst other bogey-men to hold the populace in terrified thrall, will not be able to impose it then, particularly as solar, wind and other renewables march on. The denialist industry, the massive fossil fuel interests and the nuclear carpet-baggers are all in this together, and the prize is continued social control and dominance and mega-profits, ie business-as-usual.

  21. SecularAnimist says:

    David B. Benson wrote: “Areva was mentioned and is building nothing in the USA”

    Areva is building two “next generation” nuclear power plants, one in France and one in Finland.

    Both are years behind schedule and billions of dollars over budget, and have experienced major safety-related problems.

    Nuclear power is simply the most expensive and least effective option for reducing GHG emissions from electricity generation — and that is totally apart from the very real, very serious harms and risks of nuclear power.

  22. We cannot let “these people” (big oil and gas / energy lobby, professional politicians) run the debate…so as citizen, we need a more radical approach.
    To start, we need random picks of regular citizens to run our government at all levels…just like the Greeks did for 200 years successfully. That will prevent stupid decisions such as the one above to even make it to the negotiation table because impartial people think rationally.
    We cannot have any elected government officials write the rules that regulate themselves…we need regular “average” people to write all rules and keep the richest families, big corporations, politicians and the banks out of the rule books.
    We cannot have people campaigns be bought by the rich, by corporations, by banks which leads to whoever has the better campaign wins, not necessarily the best man winning…we need the best men, and we need them RIGHT NOW.
    We have puppets for presidents with very little room to get anything done, the same applies to Congress and Senate, State government, County government and City government. They don’t care anyways, because power comes and goes, and either side gets it back ultimately. The consequence for us is that democracy is a big farce, we don’t have any say in the matter short of choosing a candidate that will basically laugh at the whole situation.
    We also need to get back to central bank systems where governments can borrow at 0% so we free ourselves from the bankers/rich families (The .025%). This business of the government making the banks/bankers/richest families richer every day, and the tax payers paying back a debt that will NEVER be repaid only pushes all of us further into slavery every day. Before the crash of 2008 the richest families/banks/corporations owned 44% of the US wealth, today they own 56%. What’s wrong with this picture?
    They’re the ones creating chaos, they’re the ones taking care of themselves before dooms happens, they watch all of us go down the drain…and then WE have to bail them out with tax payer’s money because they OWN the politicians. That’s enough to get a revolution started right there…
    To get out of this, we need to create a new currency that all of us can use, the 99.975%, that renders obsolete, the rich (their power/influence), banks, corporations, lobbies, speculators, politicians, etc…
    We need a resource based economy not a money based economy…
    Anything short of what I describe above will lead soon or later to total collapse of our ecosystem/civilization with 100% of certainty…

  23. AA says:

    I challenge your assertion that nuclear is unaffordable and ineffective.

    The lifecycle emissions from nuclear are at worst approximately the same as those of renewables. By some estimates the lifecycle impact of nuclear is lowest of all.

    How is nuclear ineffective? It already provides many times as much power as the other renewables combined… and if you don’t count hydro, the field tilts overwhelmingly in nuclear’s favor. Solar and wind still have massive unresolved technical issues (storage) and political issues (transmission, land use conflicts).

    Just as there’s nothing cheap or easy about nuclear power, there’s nothing cheap or easy about running a modern society on renewable energy.

  24. Merrelyn Emery says:

    Spot on Christopher. You can find more about how the governance system would work in Part III of Participative Design for Participative Democracy, 1993 (Emery M, ed) and Towards Real Democracy, (Emery F), ME

  25. David B. Benson says:

    “experienced major safety-related problems.”

    Such an assertion requires documentation. Both Areva EPR builds suffer from inexperienced contractors and possibly the EPR design, while safe enough for even UCS, is not readily constructable. Despite the problems with the first EPR in Finland it certainly appears that the Finns find sufficiently atractive that they are doing site planning for another.

    [And you seem to have missed my points about other NPPs going in elsewhere in the world at affordable costs. Look at all the data, not just the worst.]

  26. Mulga Mumblebrain says:

    Pick the Government by lottery like in Borges’ story ‘The Lottery in Babylon’-everybody gets a chance to be ‘Proconsul’ (President or CEO of the Kochtopus Inc.)or ‘slave’ (us). You couldn’t do any worse than a choice between the consummate con-man and the ‘Stormin’ Mormon’.