Published on May 14th, 2012 | by Zachary Shahan24
Nearly $1 Billion in Vogtle Nuclear Reactor Overruns (So Far) — Who’s Surprised?
May 14th, 2012 by Zachary Shahan
“Even though the Vogtle reactor project got its federal license just three months ago, the controversial nuclear reactors are already in trouble” That’s the first line of a recent news release, and right it is. The nuclear reactor project, the first to be approved in over 30 years, is already reporting about $1 billion in cost overruns.
I’m sorry, but you have to be a little intellectually challenged to be surprised by this.
If nuclear power is known for one thing at this point in time, it is not for being “too cheap to meter” — it is for its considerable cost overruns.
This latest overrun is likely to hurt ratepayers in the region, and it could also cost the U.S. as a whole, since the two reactors are supported by a federal loan guarantee. (The project received a $8.33-billion loan guarantee.)
Here’s more information on the cost overruns:
Southern Co. publicly acknowledged its share of the cost overrun in a filing this week with the U.S. Securities and Exchange Commission (SEC) at http://investor.southerncompany.com/secfiling.cfm?filingID=92122-12-76&CIK=092122. The new admission about problems at Vogtle follow recent reports about grading issues under the reactor’s foundation, improperly installed rebar that has slowed the project, and dozens of amendments requested to the federal license for the two new Vogtle reactors.
Given all of the partners involved in Vogtle project, the cost overrun would break down as follows: Georgia Power ($400 million); Oglethorpe ($263 million); MEAG Power ($199 million); and the City of Dalton ($14 million). The $875 million in 2008 dollarswould be worth $913 million in 2011 dollars.
And, if that weren’t enough, word is that we can expect more of this as the project develops.
Southern Co.’s SEC filing warns that more cost overruns could be in the works. In its SEC filing, Southern Co. notes on page 139: “Additional claims by the Consortium and [Georgia Power] (on behalf of the owners) are expected to arise throughout the construction of Vogtle 3 and 4.” However, no details are provided on how far losses could mount over and above the current nearly $1 billion cost overrun total.
Organizations concerned about the true costs of this project have been saying for months that “Southern Company is deliberately keeping U.S. taxpayers in the dark by covering up the details of 12 sizeable construction ‘change order’ requests that are expected to add major delays and cost overruns to the controversial reactor project.”
Going on, the Southern Alliance for Clean Energy writes: “The secret cost overruns are discussed in a censored report from late 2011 by the independent Vogtle construction monitor, Dr. William Jacobs, who is a veteran nuclear industry engineer. (See details below.) Much of Jacob’s testimony was redacted by the utility in the attempt to keep the troubling information from the public, including the U.S. taxpayers who will be left holding the bag if Southern Company defaults on the federal loan guarantee….
“The groups maintain that the NRC is violating federal law by issuing the Vogtle license without considering important public safety and environmental implications in the wake of the catastrophic Fukushima accident in Japan….
“NRC Chairman Gregory Jaczko dissented against the Vogtle license, expressing concerns about significant changes that will be required based on the crippling Fukushima accident.”
Nine organizations got together to file a lawsuit about the reactor in February — Friends of the Earth, the Southern Alliance for Clean Energy, Blue Ridge Environmental Defense League, Center for a Sustainable Coast, Citizens Allied for Safe Energy, Georgia Women’s Action for New Directions, North Carolina Waste Awareness and Reduction Network, Nuclear Information and Resource Service, and Nuclear Watch South.
Here are some of the statements from these organizations from that time:
From Jim Warren, executive director, NC WARN:
U.S. taxpayers need to brace themselves for some bad news if they are put on the hook for any ill-considered ‘investment’ in the Vogtle reactors. Taxpayers and Southern Company’s customers are sitting ducks for serial cost overruns and soaring power bills unless industry-captive federal and state regulators borrow some independence and make these giant corporations bear the costs of their mistakes with Westinghouse’s unproven, untested and unready AP1000 reactor design. DOE owes it to Americans to get all the cost overrun and delay secrets out in the open about Vogtle so that taxpayer and ratepayers know what they are in for.
From Dr. Arjun Makhijani, president, Institute for Energy and Environmental Research:
Not only are the costs of retrofits likely to be lower if they are imposed at the start of construction rather than later in the process, but an up-front accounting of the costs allows a comparison with other alternative energy sources. Electricity from natural gas combined cycle power plant is much cheaper than nuclear, for instance. This is a very important consideration in the case of Vogtle.
From Mindy Goldstein, acting director of Turner Environmental Law Clinic at Emory Law School:
The NRC decided to issue a license for Vogtle Units 3 and 4 before it could consider the lessons learned from the Fukushima accident. This is the exact approach the National Environmental Policy Act was designed to prevent. Allowing construction of the new units to continue, without first assessing the implications of the Fukushima accident, could have significant and irreparable environmental and economic consequences.
Ah, forethought, what an unappreciated gift!