Industries Energy/Green

Governor’s energy conference highlights expansion of nuclear plant and natural gas

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Print this page By Paula C. Squires

More than a third of the construction is complete on a $14 billion expansion of the Vogtle nuclear plant near Augusta, Ga. ― the first expansion of a nuclear facility in the U. S. in more than three decades.

While the massive project has run into some challenges, Stan Wise, commissioner of the George Public Service Commission, said Wednesday during the Governor’s Conference on Energy in Richmond that “We’re ahead of the game.”  The units are expected to come on line in 2016 and 2017.

Wise was the luncheon speaker for the governor’s third annual energy conference at the Greater Richmond Convention Center. The event, which drew a smaller crowd than in year’s past with just more than 600 people, continues through tomorrow. 

So far, Wise said the certified construction cost for completing the twin reactors, $6.1 billion, is 4 percent less than the original certified amount of $6.4 billion.  Four companies have an ownership interest in the project: Georgia Power, Oglethorpe Power, MEAG Power, and Dalton Utilities.  The operator is Southern Nuclear, the nuclear plant operating arm of the Southern Co., one of the largest energy companies in the South East.

All told, the project represents a $14 billion investment, with the building of the two new reactors the largest construction project in Georgia’s history. Wise said about 5,000 jobs will be created during the construction phase and 800 permanent jobs during the life of the plant.

Georgia expects 4 million new residents by 2030, and Wise said the expansion will help meet increasing power demands and keep rate increases down.  “We’re projecting the added costs to rates to be 7to 8 percent, and it could be lower with the completion of Vogtle 3 and 4,” he said. The state already receives 20 percent of its power from nuclear.

As for challenges, Wise noted that Georgia Power and other owners filed a lawsuit in August seeking a $30 million refund from contractors over a dispute involving the removal of 3.9 million cubic yards of earth during excavation for the reactors, which incurred extra costs for backfill to refill the areas.

Changes in the project also came in the aftermath of the meltdown of a nuclear reactor in Fukushima, Japan, in March 2011.  “I don’t fault the NRC (Nuclear Regulatory Commission) for the changes that came after Fukushima,” Wise said.  He added that the Westinghouse AP 1000 reactors in Georgia are a different design than the reactors in Japan.

The Japanese crisis prompted calls in the U.S. for more regulation and concern over the lack of a national plan on how to store spent nuclear fuel. Pressure from anti-nuclear groups, backed by a court ruling in June, later led the NRC to freeze decisions on new licenses for nuclear construction. The moratorium order, however, did not apply to Vogtle and another twin tower project by S.C. Electric & Gas Co. in South Carolina, because the two projects already had received their combined construction and operating license from the NRC.

In an interview with Virginia Business, Wise said financing for the Vogtle nuclear reactors is still being worked out.  Conditions of a loan guarantee commitment from the U. S. Department of Energy [for as much as $8.3 billion] remain under analysis, to see if they will be favorable to ratepayers, Wise said. In the meantime, Georgia has gone to the bond markets and has moved forward on financing some of the long-term debt to take advantage of the market’s low-interest rates.

The impact on the natural gas industry of new, shale deposits was another conference topic.Industry officials called the massive shale deposits “a game changer” that will lead to long-term price stability and new opportunities, particularly in the industrial markets and transportation.

Michelle Bloodworth, vice president of state affairs and business development for America’s Natural Gas Alliance, noted the beginning of what she called a “manufacturing renaissance,” with companies such as U. S. Steel investing in a new $4 billion plant in Louisiana that will be fueled by natural gas. “There are a lot of exciting announcements like this across the U.S.,” she said.
Another speaker, Sarah Jordan, project manager for Electric Power Research Institute, said that of the 198 giga watts of new capacity expected to come online between now and 2020, 73 percent of it is expected to come from natural gas. 

One of the reasons more natural gas plants are being built is because of cost. Robert “Bob” Powers, executive vice president and COO for American Electric Power, based out of Columbus, said a coal-fired plant costs three times more per kilowatt hour to build than a gas-fired one. “Gas costs about $500 per kilowatt hour to build, and we can build the plant in three years,” he said, whereas the permitting process alone for coal or nuclear plants can take years.

Other speakers bemoaned the country’s regulatory environment in Washington, saying the U. S. needs to streamline its permitting process, so companies will invest in new energy projects that will create jobs. “We’re entering an era of energy abundance. We’re sitting on 200 years worth of natural gas,” said Karen A. Harbert, president and CEO, Institute for 21st Century Energy, U.S. Chamber of Commerce.  “We’ve turned into a banana republic,” she said, “Build absolutely nothing near anyone … We need to prioritize energy as the next big thing, but we have to get the government out of the way.” 

Even with its $16 trillion dollar debt, Powers said the U. S. still acts like a rich country, “when we’re not that far away from being Greece.  If we want something, we go in debt for it. We’re getting very concerned that the nation is heading to an unsustainable situation, and energy regulation is just one example.”




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