Customers could pay $2.5bn for nukes that never get built

Bloomberg

US electricity consumers could end up paying more than $2.5 billion for nuclear plants that never get built.
Utilities including Duke Energy Corp., Dominion Resources Inc. and NextEra Energy Inc. are being allowed by regulators to charge
$1.7 billion for reactors that exist only on paper, according to company disclosures and regulatory filings. Duke and Dominion could seek
approval to have ratepayers pony
up at least another $839 million, the filings show.
The practice comes as power-plant operators are increasingly turning to cheaper natural gas and carbon-free renewables as their fuels of choice. The growth of these alternatives is sparking a backlash from consumers and environmentalists who are challenging the need for more nuclear power in arguments that have spilled into courtrooms, regulatory proceedings and legislative agendas.
“Anything that hasn’t gotten off the ground yet isn’t getting built,” said Greg Gordon, a utility analyst at Evercore ISI, a New York-based investment advisory firm. “There is no economic rationale for it.” Only two of 18 nuclear projects proposed since 2007 are under construction. Those units, being built by Southern Co. in Georgia and Scana Corp. in South Carolina, are billions of dollars over budget and years behind schedule. In the meantime, the price of natural gas has dropped 38 percent since 2010. It’s now used to generate more than a third of the nation’s power, up from 24 percent six years ago.
Utilities that are moving forward with their nuclear plans say they want to preserve the option to build if market or regulatory conditions change. Nuclear power offers around-the-clock, carbon-free electricity that becomes more valuable if federal rules limiting greenhouse gases take hold, the utilities say.
“One way to mitigate these risks is to spend money now, so that you have a license to build a nuclear plant if and when you need to,” said Richard Myers, vice president of the Nuclear Energy Institute, an industry trade group.
Critics of policies that allow utilities to bill for planned reactors say they’re likely unneeded, and the practice shifts upfront financial risks from shareholders to customers. “The rich get richer and the ratepayers get poorer,” said Mark Cooper, a research fellow at Vermont Law School who submitted testimony in July opposing Dominion’s planned reactor in Virginia on behalf of the Virginia Citizens Consumer Council.

NUKE SPENDING
Money collected from ratepayers so far has gone for items including federal licensing, permitting, land purchases, financing and equipment. Nuclear developers have sunk at least $1.2 billion of their own cash into proposals where they aren’t allowed or won’t ask to recover expenses from consumers, the disclosures and filings show.
At least seven states including Florida allow utilities to collect nuclear licensing and planning costs from customers before any construction begins.