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Critical decisions, deadlines loom for nuclear projects

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Critical decisions, deadlines loom for nuclear projects

SNL Image

Workers at the Alvin W. Vogtle Nuclear Plant expansion in November.

Source: Georgia Power Co.

The future of U.S. nuclear power remains unclear, with recent industry developments seeing some steps forward but also some backward as significant deadlines approach.

Although Georgia regulatory staffers on Dec. 11 defended their view that the Vogtle nuclear plant expansion remains uneconomic and lead owner Georgia Power Co. should shoulder more risk and slash its cost recovery, the company's attorneys were able to extract some concessions in support of the project.

Georgia Public Service Commission analysts said the Southern Co. subsidiary's most recent Vogtle cost application represents a reasonable basis going forward, assuming the utility can straighten out nearly $500 million in fees to former project manager Westinghouse Electric Co. LLC. They also confirmed no prudent costs would be disallowed at this point in time and a cost cap is not being recommended.

Further shoring up Vogtle's financial strength was the Dec. 14 announcement that Westinghouse parent Toshiba Corp. completed $3.68 billion in payments to the project's co-owners, one of the "critical assumptions" upon which the recommendation to continue construction was based.

The PSC will convene Dec. 21 to vote on whether to allow continued construction at Vogtle along with whether to certify Georgia Power's most recent round of project spending. At the previous iteration of this meeting in August, commissioners approved the utility's expenses and expressed support for the expansion's completion.

Vogtle is also owned by Oglethorpe Power Corp., the Municipal Electric Authority of Georgia and Dalton Utilities.

A positive development at another project was U.S. Nuclear Regulatory Commission staff on Dec. 12 favoring the view that Florida Power & Light Co. be granted a combined operating license for its Turkey Point nuclear plant expansion, construction for which has yet to begin.

NRC staff and the agency's Atomic Safety and Licensing Board both concluded that safety evaluations support the NextEra Energy Inc. subsidiary's application to build and operate two new reactors south of Miami. Commissioners are expected to promptly issue a final decision on the license application.

While federal regulators were content with the state of affairs at Turkey Point, members of the Florida Public Service Commission have been less supportive. In October, the PSC rejected FPL's request to defer project cost recovery, criticizing the utility for not having filed a feasibility analysis of the expansion for the past two years. Commissioners also declined to affirm the reasonableness of FPL pursuing a license from the NRC.

Stakeholders argue that the lack of long-term studies will further drag out Turkey Point's timeline. FPL has said the new reactors could go online by 2032 and their total cost could be as high as $21.87 billion.

Questions at federal, state, local levels

Meanwhile, in Congress, nuclear advocates are pushing for an extension of federal production tax credits for new nuclear projects, which, at this point, would apply solely to Vogtle after the Summer plant expansion was abandoned in July.

While a credits bill passed the House of Representatives in June, the Senate has not taken any action since. There has been hope that the nuclear language would be included in federal tax reform, but that does not seem to be the case as of Dec. 14, according to Bloomberg.

Citing a Republican familiar with the process, the news outlet reported that credits language has been excluded from the final tax bill, the latest version of which is expected to be released Dec. 15.

Other entities are attempting measures to support nuclear as well. Federal Energy Regulatory Commission member Neil Chatterjee said Dec. 11 that he hopes the agency can agree on interim help for economically struggling nuclear plants until FERC takes longer-term action.

The North American Electric Reliability Corp. on Dec. 14 called on FERC to recognize the reliability and resiliency of nuclear generation and back proposed market rules that support these attributes. Outgoing New Jersey Gov. Chris Christie said Dec. 6 that he is considering a nuclear power subsidy bill.

Running counter to nuclear supporters' goals was the New York electric grid operator determining Dec. 13 that the planned retirement of Entergy Corp.'s Indian Point plant poses no threat to grid reliability.

Perhaps the biggest question on the projects front is whether South Carolina regulators will strip South Carolina Electric & Gas Co. of nearly $450 million collected annually in revised rates tied to the abandoned Summer expansion. The utility's parent, SCANA Corp., argued Dec. 12 that it would be "crippled financially" were this to occur. Regulators said Dec. 13 that they will "rule as soon as possible" on the matter.

At the local level, many eyes are on the Jacksonville, Fla., municipal utility as it considers privatization. Moody's Investors Service on Dec. 8 revised its ratings outlook on JEA to "negative" for its exposure to the Vogtle project, as the utility has a power purchase agreement with one of the plant's owners.

JEA management defended its record at a Dec. 12 meeting, but according to The Florida Times-Union, those same officials have told analysts they want out of the power purchase agreement and would like Georgia regulators to cancel the Vogtle expansion.