NRC Commissioner says feds fall short
[Update 03/19/08]

Gregory Jaczko, a member of the Nuclear Regulatory Commission (NRC), went to London last week to say the obvious about federal loan guarantees, something he should be saying here in the states. What he said was that the U.S. government's $18.5 billion in loan guarantees falls short of the $500 billion needed to build the country's next generation of nuclear power plants.
What this looks like is a man climbing into a tree and telling his friends on the ground his trip to the moon has a bit further to go. The loan guarantees, in their current form, will only be enough to finance two to three nuclear reactors. The current limits could stop new nuclear power plants after that dead in their tracks. It would tip the so-called "nuclear renaissance" into the realm of science fiction. What we really need in this country is the nuclear equivalent of the Apollo moon program with a joint commitment of the government and industry. It's the only way we're going to do more than just run in place.
Referring to the $18.5 billion in loan guarantees authorized last year Jaczko said, "It's a far cry from what's needed. Congress is supportive, but have decided not to provide more federal loan guarantees - there's a disconnect there, so financing would have to happen without federal loan guarantees. "
More reactors are coming
To date, the NRC has received five complete applications and one partial application for licenses to operate and construct a nuclear power plant. The agency expects to receive 17 applications for 30 nuclear power reactors with around 45 GW of capacity over the next two to three years. It's not yet clear how many licenses will be approved. Some will fail the "baloney test" and never make it to an NRC licensing hearing.
Jaczko said around 50 new nuclear reactors would be needed to replace the country's aging plants and keep the amount of electricity produced from nuclear steady at 20%. What he didn't say, but should have, is that we'll need another 50 to make any impact at all on swapping out fossil fuel generated greenhouse gases for zero emission nuclear energy.
Also speaking at the same electric utility conference was Mike Wallace, CEO of Constellation, who has been outspoken on the issue of the loan guarantees.
"That first wave of new nuclear would need assistance as there's no commercially available financing now because of the uncertainties and because it's been 30 years since one was built."
"But once we demonstrate that, we should be able to finance the next wave with commercial loans," Wallace told Dow Jones Newswires.
Constellation Energy hopes to break ground on a new nuclear power reactor at its Calvert Cliffs plant in Maryland at the end of this year following a final decision in November. The company plans for an Areva EPR, a 1.6-gigawatt reactor, to come on line in 2015.
What neither man really said was the likelihood that investment banks will put up billions of dollars for new nuclear power plants in the current Wall Street financial meltdown is a perilous proposition without the guarantees. Good luck with that in the current financial climate. Maybe what's needed is some interest from the giant sovereign wealth funds that have sprung up around the planet?
Progress and FPL file for two reactors each
If you want to see how small an effect the current loan guarantees are really going to have on swapping nuclear energy for fossil fuels and slowing down global warming, then take a look at Progress Energy. This week it filed plans for a new nuclear power plant in Florida. The firm told the state public utility commission the plant has an estimate price tag of $17 billion and will take nine years to build. It is expected to go into service in 2017. The twin reactors will be located in Levy County, Florida.
Construction costs are estimated to be about $14 billion and new electric grid transmission capabilities, including 200 miles of lines, will be another $3 billion according to media reports about the filing. These costs will be passed on to customers while construction is taking place. Progress services just under two million customers in Tampa, Orlando, and other locations in the middle of the state.
Progress has become the poster child of critics of nuclear energy who say the reactors are too expensive to build. The Progress filing follows a petition for two new reactors from Florida Power & Light. FPL said its units could cost from $12 billion to $24 billion, which is double projections other nuclear developers made in the past year.
If it weren't for the fact that five other reactors have already filed with the NRC for licenses, and for loan guarantees, the two utilities in Florida could use all of the coverage and still have investors out in the cold. The only thing that makes the new build in Florida viable is a state law, in a regulated environment, which allows the utilities to bill customers for the costs of construction while the plants are being built.
Progress said its two new reactors would boost average annual costs for the company's 1.7 million Florida customers by 3 to 4% from 2009 to 2018. Once the plants begin operation in 2016-17, Progress estimated fossil fuel savings would be about $1 billion annually as the utility's percentage of nuclear generation rises to 38 percent from 12 percent.
Early cost-recovery is a key for Progress, C.J. Drake, Progress spokesman, told Reuters. "If it weren't for that, nuclear would be too expensive. Our customers are asking us to do as much as we can to address climate change."
Florida regulators have rejected plans for several coal-fired plants over the past year, leaving nuclear and natural gas-fired generation as viable options for electricity generation to serve a rapidly growing customer base. The current nuclear plans are for Westinghouse AP1000s.
The Florida Public Utilities Commission is expected to hold hearings on the filing. Environmental reviews also start up. The NRC licensing process will take at least 42 months according to the agency. Progress hasn't actually submitted an application tot he NRC yet. According to the NRC's status information, Progress is expected to file for two Westinghouse AP1000 reactors later this year.
Update 03/19/08
The Miami Herald reports State regulators approved Florida Power & Light's request to build two new nuclear reactors and opened the door for the utility to start charging customers for the multibillion-dollar investment as early as next year. It will take nearly a decade to complete the project.
In a major victory for FPL, the Public Service Commission dismissed concerns of dozens of environmental groups and unanimously agreed there was a need for the new reactors at Turkey Point in South Miami-Dade. In effect, the Herald reports, the regulators gave the plants a "green light."
For more insights into the FPL filing log over to Rod Adams Atomic Insights for analysis of the costs and why it still makes sense to build the plants.