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Nuclear Energy

Published on May 14th, 2012 | by Zachary Shahan


Nearly $1 Billion in Vogtle Nuclear Reactor Overruns (So Far) — Who’s Surprised?

May 14th, 2012 by  

“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.

Nice, eh?

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!

Source: PR Newswire
Image: Vogtle nuclear reactor project rendering via NRC

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About the Author

Zach is tryin’ to help society help itself (and other species) with the power of the word. He spends most of his time here on CleanTechnica as its director and chief editor, but he’s also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as a solar energy, electric car, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada.

Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don’t jump to conclusions.

  • If you are interested, I have a list of references used for the piece.

  •      I looked at your bio. So you have really zero background in engineering and/or any form of power production. You have spent your adult life as a community/city organizer and planner and student/ambassador of the environment. It is not my intention to sound belittling, but I believe your opinion is not grounded in substantiated knowledge or fact. 
         This administration has completely squandered over 6.5 billion in loan guarantees for alternative “green” energy endeavors that the taxpayers will not see one cent returned. One of the most recent failures is Nevada
    Geothermal Power, a project highly touted by Harry Reid. While nuclear power is not “too cheap to meter” as heralded nearly 4 decades ago, this is entirely due to government regulation. While oversight is important, too much is expensive and painful. In addition to the NRC, we are also self-policed as an industry by INPO. I say “we” because I spent 8 years as a Reactor Operator in the Navy, and have been in operations and operations training in commercial nuclear power since 1997.
         I am not opposed to exploring alternative forms of energy, but the notion that wind, solar, and geothermal can meet the power demands of our nation is uninformed and naive. You cannot sustain base load with alternative power that is reliant on a shining sun and blowing wind. Concerning the other methods we employ for base loading, I am sure your background in environmental studies provides you an understanding of the emissions produced due to generation using coal and gas. This is in stark contrast to the zero carbon emission from nuclear production.
          I welcome peoples’ opinions and the debates concerning a renaissance in nuclear power. However, I abhor purposely misleading statements such as the one in the first paragraph of your blog stating “the controversial nuclear reactors are already in trouble”. That shock quote is intended to incite fear through peoples’ ignorance. The “trouble” lies in the infinite government regulatory hurdles of environmental impact to some protected newt, uninformed watchdog groups, and an endless list of others. The “trouble” is not in the reactor itself or its design. The new reactor designs are so much safer than the designs of over 4 decades ago, with a reliance on safety systems that are completely passive.
          Again, I completely encourage exploring new technologies. However, we have the technology to build a complete new fleet of nuclear power plants that is inherently safe, and possesses the ability to provide power and jobs for decades to come. The stimulus money wasted on all the failed alternative power projects could have went to a plant that would hire thousands of workers for a period of 5-8 years for construction, and approximately a thousand workers for over 4 decades.
       Here is a piece I recently wrote:

    The crusade of this administration’s
    “green” initiatives has fallen short. The most recent addition to the
    long list of flailing or failed is Nevada Geothermal Power. After avowing that
    this would “put Nevadans to work” and Nevada would be the “Saudi Arabia of
    geothermal energy”, the pugilistic progressive from Nevada (Harry Reid) and
    Energy Secretary Steven Chu gave their cross our heart and hope to die
    endorsements to the Obama administration. Of course, this was all the blessing
    needed for a 98.5 million dollar loan guarantee to a company that had an
    existing facility up and running. The 98.5 million did not add any new
    construction or create a new job. A little FYI, when they guaranteed the loan NPG’s
    credit rating was BB+ (a.k.a. speculative, junk, below investment grade). That
    being said, let us take a look (and some blood pressure medicine) at the Obama
    administration’s record (and over 6.5 billion taxpayer dollars from those of us
    that still pay taxes) for all this wonderful touchy feely green initiatives.


    before this California based company (hoorah for Feinstein, Boxer, and Pelosi-more
    on her later) received a 535 million dollar loan guarantee Obama administration
    officials warned that the loan was a bad move. The thinkers in the group were
    budget analysts Mathew Mosk, Brian Ross, and Ronnie Green, and Biden’s chief of
    staff, Ronald A. Klain. As we all know Solyndra went belly up in August 2011.
    Surely there were no hands in the presidential cookie jar, so how did the
    surgeon of spin attempt to remove any accountability and responsibility?

    one was to state they had no idea that Solyndra was in bad shape. This is tough
    to sell when you have White House emails from the three analysts. This alone is
    enough to elicit the liar liar pants on fire retort. Stage one is officially
    debunked. Stage two is, wait for it, wait for it,…….blame Bush. During an
    October press conference Obama said that the loan guarantee was a Bush
    initiative under the Energy Policy Act of 2005 and “all of them (Congress) in
    the past have been supportive of the loan guarantee program”. Well at least
    there is an ounce of truth buried in this one. The following comes directly
    from the DOE website. Section 1703,
    Title XVII, of the Energy Policy Act of 2005 was created to provide self-pay
    credit subsidy loan guarantees to U.S.
    (not Finnish aka Fisker Automotive) companies developing “a new or
    significantly improved technology that is NOT a commercial technology”. A
    self-pay credit subsidy loan charges the borrower the amount the government
    would lose over the life of the loan including lost interest, application,
    facility, and maintenance fees. The loan also guarantees that your tax dollars
    will pay the loan if the borrower defaults. These costs can range from 1-30% of
    the loan. However, Solyndra’s entire loan came from the amended Section 1705 (not 1703), Title XVII, of
    the Energy Policy Act of 2005. The amendment was created under the American
    Recovery and Reinvestment Act of 2009, also known as the stimulus law, for “commercially
    available technologies,” This amendment provided more funding and had no
    credit subsidy fees meaning the company didn’t have to secure any money for the
    loan guarantee. Since it was his bright idea to spend us out of debt, it definitely
    did not predate Obama. Stage two is officially debunked. For the sweeping
    bi-partisan support claim, in 2005, the Republican controlled House and Senate
    passed the Energy Policy Act. The House vote was 275-156 with 31 Republicans
    voting nay, and the Senate vote was 74-26 with 6 Republicans, Biden, and
    Hillary, who criticized the bill as too generous to the oil industry, voting

    for some dirt behind the Solyndra deal. First we have billionaire
    George Kaiser, a private investor in the Solyndra deal who just happened to be
    a fundraiser for Obama during the 2008 presidential election cycle. Up next we
    have another presidential backer, Steve Spinner. Ole Stevie boy raised about
    $500,000 for candidate Obama back in 2008 and subsequently got a top job in the
    Energy Department, where he was now able to influence the $535 million loan
    guarantee for Solyndra. By sheer coincidence Spinner’s wife worked for a law
    firm representing Solyndra at the time.

    Beacon Power

    This gem had allegedly had a Standard & Poor
    (S&P) rating of CCC-plus, which is the same as being rated as a junk bond,
    before it was doled out 43 million in unsecured taxpayer money. When asked
    about personally investing in Beacon Power, economist Peter Morici (the bow tie
    sporting fella in the Kyocera commercials) said he wouldn’t do it on purpose
    stating that it wasn’t even good junk bond (oxymoron anyone). When it went
    belly up with our tax dollars in Oct. 2011, those not financially hurt by it
    were CEO William Capp (a 2008 Obama donor) and lobbyist Steve Wolfe (former
    aide to the late Sen. Ted Kennedy).


    guys received 1.4 billion, yes with a B. These entrepreneurs were neck deep in
    debt to the tune of 1.8 billion losing 71.6 million to their 13.5 million in
    revenue. For those of you possessing the ability to balance your family
    checkbook, more goes-outs than come-ins equates to you living beyond your
    means. No B.S. flags to be thrown here, despite the fact that the company’s
    largest shareholder is Kennedy’s VantagePoint Partners. Who pushed to secure
    this loan guarantee? None other than Robert F. Kennedy Jr. You remember him.
    The guy that got busted for heroin possession back in 1983 and got 2 years
    probation. Who else was a big player in this firm you ask? Let’s talk about
    former venture capitalist Sanjay Wagle (or vampire capitalist when talking
    about Romney). Sanjay, a big player fundraiser for Obama in 2008, left the
    private sector for a position in….you guessed it the Department of Energy. Since
    his appointment 2.8 billion dollars have been steered to companies that
    Sanjay’s old firm, Vantage Point Partners, have investments in.



    that awesome electric car that was going to be built here in the USA and all
    the jobs that would be created in Delaware all for a paltry 528 million.
    Evidently what we weren’t made privy to was the confusion of Delaware sounds an
    awful lot like Finland. What firm is behind Fisker? Well that would be Kleiner
    Perkins Caufield & Byers a venture capital firm in which Al Gore is a
    partner. But hey remember this project had the full support of Gilbert Grape.
    This was half of the 1 billion dollar wheel spin lumped in with Tesla motors
    backed by Google co-founders Larry Page and Sergey Brin. It may have been worth
    it though. If you want, look at the Consumer Reports test of the Fisker Karma
    where it died on the test lot.

    First Solar

                After dropping 73% on the S&P
    500 index, these guys won the label of worst performer in 2011 by BusinessWeek.
    With millions spent on lobbying that pesky moniker wasn’t going to stop Obama
    from awarding a mere 3 billion of our dollars in grants on its slow death.

                I know enough already, “no mas”. We
    could continue on with the Pelosi connection to Tonopah Solar Energy, her board
    sitting brother-in-law, and the 737 million there. If you still want to keep
    going research the 1.4 billion going to Project Amp. The undisputable fact is
    this president has amassed more debt in just over three years than the previous
    president did in eight. While he may have inherited the recession (aka Bush’s
    fault), he has managed to do everything possible to prevent its recovery.
    Remember, he had the numbers and friends to do/undo anything he wanted from
    2008-2010. All of this money has been wasted on profiting donors and friends
    for energy sources that when combined supply less than 2% of America’s energy
    (and that’s only if the sun is shining, wind blowing etc.). I do have a little
    knowledge and insight into this as I have been in the business of producing
    power for over 20 years. Of course it sure doesn’t help when you have a
    Secretary of Energy that wants to boost gas prices to the levels seen in
    Europe. By the way, that’s in the neighborhood of 8-10 bucks a gallon, and that
    is one expensive neighborhood.

    • Bob_Wallace

      Brian, a lot of stuff.  I’m sure some of us will have fun responding to you.

      Let me address one little claim on your part and then get on with pouring some concrete….

      Here’s you – “The “trouble” lies in the infinite government regulatory hurdles of environmental impact to some protected newt, uninformed watchdog groups, and an endless list of others. The “trouble” is not in the reactor itself or its design.”

      Here’s the news –

      “Southern Nuclear notified the commission in March that minor settling beneath the reactor’s “mudmat” made it a few inches off level and would require changes.The mudmat lies beneath the concrete “basemat” on which nuclear buildings will sit. The current license allows a 1-inch variability in the levelness of the basemat, and the requested amendment would increase that leeway to 4 inches, allowing engineers to level the surface by using more concrete when the basemat is poured.A second issue, involving rebar that is not consistent with the design standard, is also being corrected this week. Workers began corrective actions Friday that include welding the rebar fasteners to bring them into compliance.”http://chronicle.augusta.com/latest-news/2012-06-26/vogtle-foundation-change-can-proceed-nrc-ruling Screwups = slowdowns = higher costs.

    • Bob_Wallace

      Solyndra.  This was more of a Bush administration than Obama administration project.  The application was filed under Bush and the Bush people pushed on the DOE review committee to approve it.  
      The application was not complete, it was returned for completion, it came back to DOE and the exact same group of people approved the loan guarantee shortly after PBO came to office.

      The CEO of Solyndra was a Republican.

      George Kaiser was not an investor in Solyndra.  A non-profit corp that his family had established did have some money invested but neither George nor any other member of his family stood to gain from Solyndra.

      At the time, of the loan guarantee Solyndra made sense, both within the renewable energy field and to the financial industry.  PV panels were very expensive and Solyndra had a way of getting more from less photosensitive material and cutting installation costs.

      But after Solyndra started manufacturing and building a larger factory (loan guarantee) the price of solar panels plummeted.  No one saw that coming.  No one predicted the extremely rapid price drop.

      That price drop undercut Solyndra and put them out of business.

      Everything else is right-wing spin.

    • Bob_Wallace

      The undisputable fact is this president has amassed more debt in just over three years than the previous president did in eight. While he may have inherited the recession (aka Bush’s fault), he has managed to do everything possible to prevent its recovery.”

      The national debt increased $11 trillion under Bush.  It increased $5 trillion under PBO.

      To claim that PBO has “managed to do everything possible to prevent its recovery” is a blatant lie.

      You want to participate in conversations here?  Then follow the rules.  You are not allowed to make shit up.

    • I love it when people write about something they know nothing about — makes my day.

      I’ve been reading and writing about energy professionally for 3 years now. I regularly see experts in the arena saying things, coming to grand realizations, that we here on CleanTechnica were covering 1, 2, or even 3 years ago.

      Not sure what you mean by “ambassador of the environment,” but yes, my bachelor’s degree (from the Honors College of Florida) was a double major in environmental studies and sociology, which covered many of the things I’m writing about today. You don’t often see a lawyer criticized for studying law in college, so it seems odd to think that my educational background doesn’t match what i’m writing about.

      as for all the other info you copy & pasted in here, it looks like Bob has done a good job spending his free time debunking your myths (i won’t call them lies, since i don’t know if you actually believe them or not).

      as Bob noted though, if you’d like to retain your commenting privileges on this site, you should be careful to check completely absurd claims before posting them.

  • 145mat

    I’m out here in Arizonia, maybe you need to research the cost of solar fields and the amount of land needed to create the power that is equal to one nuke, before you make acomment like that

    • Bob_Wallace

      Who, what comment?

      Do you have a point to make?  

  • CaptD

    Seems the South is now firmly under the THUMB of nuclear fascism* while the entire USA is now on the HOOK to pick up the tab if anything goes wrong; where is the fairness in that?

    *Nuclear Fascism

  • Matt

    Two unit cost $14 billion and provide 2200 megawatts of base load power (GE estimate), plus current $1billion overrun, plus site work and legal fees, plus interest on the cost. But let us use the low number and use the $2M/MW nominal from Ross below.
    $15000Million / 2 = 7500MW now it isn’t really 3 time since solar/wind don’t run 24 hours a day. But then neither would these plants. And in fact the bigger need is for peak power.

    But wait there is more, lets us look at how the power company could get much more for its money. Take 1/2 and say that for anyone in they service area they will match the 1/3 Fed tax credit on roof top solar. Now the amount spent on the solar is not 7.5 billion it is 22.5 billion (11.25 GW) plus the power is distributed so they don’t have transmission loses (say 10% => 12.5GW), plus less power over local lines so less maintenance cost there. Okay maybe a portion on the best energy eff projects.

    Which means they also don’t need to buy another couple coal/nuclear plant.

  • Dcard88

    I hope that anyorganization that wants to push another plant will have to wait for the final cost of this plant before they can get ANY approvals.

    • Bob_Wallace

      A continued stream of bad news out of Vogtle will probably doom new nuclear in the US.

      We seem to be unable to learn from things that happen outside our boarders. We dismiss the rising costs and extending time lines in Finland and France. This will be data that will hard to dismiss.

      All the promises of “We know how to do it right, now.” are showing to be hollow.

      People who don’t care about the risk of nuclear are going to be influenced by the cost of nuclear.

      The downside of that is that it’s likely we’ll build more natural gas generation in order to get the power we want. But at least NG is dispatchable and cheaper wind/solar will force it off the grid over time.

      • CaptD

        We, the US taxpayers should be so lucky!

  • Matt

    Isn’t this the plant with the sweet heart deal from the Georgia State government. That in return for building in Georgia, they have a minimm rate of return. Something about being able to raise rates in the state or the state just giving them the money.

  • Jeff King

    A great addition to this article would be how much Wind, solar, and other green, safer technologies could have been produced with the 8 billion initial loan and what could be made with the 1 billion over run

    • Ross

      Assuming about $2 million per MW that’s 4.5GW nominal.

      • Jeff King

        Well thats just direct purchases not even using it as a subsidy to motivate people to invest so it could be even more

        • Ross

          A previous survey said 26% of Georgia’s electrical power could come from rooftop solar.

    • CaptD

      Georgia ratepayers are getting raped by the nuclear industry

      Time will show that by the time this nuclear turkey is finished the Energy will be too expensive to afford giving that the cost of Solar (of all flavors) is dropping monthly!

  • Bob_Wallace

    Vogtle has also announced that they have been able to shave $1 billion off financing costs. So perhaps that’s a billion wash.

    The savings come from lower bond prices from five years ago when the budget was developed.

    Why people would buy bonds in today’s market is a puzzle. And an increase in interest rates would quickly wipe out the savings.

    Along with the news of better financing they also have announced that it will take at least 8 months longer to bring the plant on line.


    It’s not clear if they accounted for the extra financing cost created by the additional 8 month delay.

    • Bill_Woods

      A second billion!

      • Bob_Wallace

        Yeah, but it’s an announcement full of weasel words.

        “Could” save a couple of billion. “If”….

        And, as I pointed out, it’s not clear if they added in the cost of an extra 8 months of financing caused by the announced delay.

        Georgia rate payers are likely to take it in the shorts for this move. It’s going to be interesting to see if some people take themselves off the grid as solar prices drop and batteries improve.

        Loosing customers, even loosing peak hour demand could be a big problem for Vogtle. And, in Georgia, the utility companies seem to be able to pass their pain on to customers.

        • CaptD

          “weasel words” and Nuclear go so well together… Like Nuclear Safety!

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