CWIP, or Construction Work in Progress, is a law, fortunately existent only in a handful of U.S. states, that allows a utility to charge ratepayers higher rates to cover future costs of a yet-to-be-constructed reactor, even if that reactor is never built.



"Experts warned of nuke work overruns"

The Vogtle Unit 3 reactor pressure vessel, parked in front the Vogtle Unit 4 containment vessell bottom head, May 2013. Photo credit: Georgia Power.As reported by Matt Kempner in the Atlanta Journal Constitution, the two new atomic reactors under construction at the Vogtle nuclear power plant in Waynesboro, Georgia are "more than three years behind schedule," and costs for just one partner, Georgia Power (a subsidiary of Southern Nuclear) "is at least $1.4 billion, or 23 percent, over original projections."

The Vogtle 3 & 4 construction project (see photo, left) is being financed through "Construction Work in Progress" (CWIP), or "advanced cost recovery" -- that is, simply surcharging ratepayer electricity bills. This practice is illegal in most states, but has been made legal in Georgia, as well as South Carolina -- where two more new reactors at Summer nuclear power plant are also under construction (and also suffering schedule delays and massive cost overruns).

Highly controversial CWIP resulted in the loss to ratepayers of $3 billion, for a cancelled new nuclear power plant. Somehow that massive amount of money was spent, even though ground was not even broken on the failed project.

The Georgia Public Service Commission, the same agency that approved ratepayer CWIP surcharges in the first place, will now decide on whether or not ratepayers will eat the cost overruns at Vogtle 3 & 4.

In addition to gouging ratepayers, Georgia Power/Southern Nuclear is also gouging federal taxpayers, compliments of the Obama administration. In Feb. 2010, President Obama himself made the announcement that his U.S. Department of Energy was awarding $8.3 billion in federal loan guarantees to the Vogtle 3 & 4 project. In addition to the loan guarantees, the actual loan is coming from U.S. taxpayers as well -- from the taxpayer-funded U.S. Finance Bank. In that regard, the federal nuclear loan guarantee is already a failure -- it was supposed to entice private investors to actually loan the money to the project.

Incredibly, the DOE didn't even charge a penny in credit subsidy fee. This means Southern Nuclear/Georgia Power has no skin in the game. If the loan repayment is defaulted upon, taxpayers will be left holding the bag, entirely.

Vogtle 3 & 4 have put at risk 15 times more money than was lost in the Solyndra solar loan guarantee default. And Vogtle 3 & 4's risk of default is actually significantly higher than Solyndra's risk ever was.

(Re: the RPV in the photo above, it actually was involved in a transport accident at the Port of Savannah in Jan. 2013, when its transport train carriage collapsed under its massive weight. It then limped back to the Port, where it was exposed to the elements for an extended period, covered only partially by run of the mill tarps.)


One-year construction delay at Vogtle 3 & 4 means $730 million in cost overruns for GA ratepayers!

The Vogtle 3 & 4 construction site (aka money pit) as it appeared in July 2013.As reported by the Augusta Chronicle, construction schedule delays at the Vogtle 3 and 4 new reactor project in Georgia will add to the price tag at a whopping rate of $2 million per day! State ratepayer advocates now estimate a one-year delay in reactor start up, which amounts to a $730 million add-on to the already multi-billion dollar cost.

Under Georgia's Construction Work in Progress (CWIP) law, ratepayers are forced to pay for the constructions costs with a surcharge on their electricity bills. This practice is illegal in most other states.

In addition to gouging ratepayers, Vogtle 3 & 4 is also gouging federal taxpayers. The Obama administration awarded an $8.3 billion loan, and loan guarantee, to the project -- Southern Co. and its partners have not one cent of skin in the game. Talk about a financial "moral hazard," with a radiological twist! Let's hope the scheme doesn't "meltdown," and the investment turn "radioactive"!

In fact, the Vogtle 3 & 4 federal loan guarantee amounts to 15 times more federal taxpayer money than was lost in the Solyndra solar scandal. And, Vogtle 3 & 4 are actually more at risk of defaulting on their loan repayment than was Solyndra!


Cost overruns and schedule delays at proposed new reactors in GA, SC, and TN

Aerial image of Vogtle nuclear power plant in GA, showing the operational Units 1 and 2, as well as the construction site for the proposed Units 3 and 4. Photo credit: High Flyer.We told them so. As the environmental movement warned 14 years ago, when the nuclear relapse was hatched by the Bush/Cheney administration, proposed new reactors at Vogtle 3 & 4 in Georgia, Summer 2 & 3 in South Carolina, and Watts Bar 2 in Tennessee are suffering major cost overruns and construction schedule delays.

Southern Alliance for Clean Energy (SACE) has published an update on Vogtle 3 & 4, which currently are suffering a 21-month schedule delay, and $1.4 billion cost overrun. The delays could well get worse, at a staggering cost increase of $2 million per day of delay!

Similarly, as reported by SRS Watch, delays of up to three years, and cost overruns topping $500 million, are afflicting the Summer 2 & 3 proposed new reactors in SC.

Note that those April 1st projected opening dates for the new reactors at Voglte and Summer, listed in the updates above, are no April Fool's joke. GA and SC ratepayers are already being gouged for the new reactors' troubled contstruction, on their electricity bills. This is called "Construction Work in Progress" (CWIP), or advance cost recovery. It is illegal in most states.

Vogtle 3 & 4's financial risks also now implicate federal taxpayers, in the form of a $6.5 billion loan guarantee, likely to soon grow to an $8.3 billion loan guarantee. This is compliments of the Obama administration. So, if Vogtle 3 & 4 default on their loan repayment, federal taxpayers will be left holding the bag. This is 15 times more taxpayer money at risk than was lost in the Solyndra solar loan guarantee scandal. And that risk, of Vogtle 3 & 4 defaulting on its loan repayment, was judged, years ago, by the likes of the Congressional Budget Office and Government Accountability Office, as a much greater risk than Solyndra defaulting on its loan repayment.

Vogtle 3 & 4, as well as Summer 2 & 3, are Toshiba-Westinghouse AP-1000 reactors. They are experimental, never having been built before anywhere in the world, although AP-1000s are also under construction in China.

The proposed new reactor in Tennessee, that is also suffering cost overruns and schedule delays, is the Tennessee Valley Authority's long-mothballed Watts Bar Unit 2.

To add to the irony, the existing reactors at Vogtle, Units 1 & 2, were the poster child for cost overruns in the last generation of reactor construction, coming in at 1,300% their originally estimated cost!

And the operational Watts Bar Unit 1 took 23 years to build, from 1973 to 1996!


Radioactive "Moral Hazard": DOE loans, and guarantees, $6.5 billion for two new reactors for a 0%, $0.00 credit subsidy fee!

Aerial image of Plant Vogtle Nuclear Generating Station - photo credit to High Flyer. The photo shows the operating Units 1 and 2, as well as the construction site for proposed new Units 3 and 4.

Gouging ratepayers with CWIP "nuclear tax" surcharges on electricity bills wasn't good enough for the nuclear utilities behind proposed new reactors at Vogtle 3 & 4 in Georgia.

Southern Alliance for Clean Energy reports in a press release entitled "New Documents Confirm Utility Giant Southern Company Gets Sweetheart Deal from Energy Department for Multi-Billion Nuclear Loan Guarantees for Vogtle Reactors":

"As revealed today in an Energy & Environment News story by Hannah Northey, the credit subsidy fee for utility giant Southern Company and its utility partner, Oglethorpe Power, for billions of dollars in taxpayer-backed federal loan guarantees, is nothing, $0. This shocking information was disclosed two months after the Department of Energy (DOE) finalized terms of $6.5 billion worth of loan guarantees that were offered as part of an $8.3 billion package to build two new nuclear reactors at Plant Vogtle in Georgia. A third partner in the project, MEAG, has yet to have their $1.8 billion loan guarantee finalized."

Please register your disapproval of this nuclear sweetheart deal, at taxpayer expense and risk, to President Obama, your two U.S. Senators, and your U.S. Representative! You can be patched through to your Members of Congress via the Capitol Switchboard at (202) 224-3121.



RMI: "Nuclear Power's Competitive Landscape and Climate Opportunity Cost"

Amory B. Lovins, Cofounder and Chief Scientist, RMITitiaan Palazzi, Special Aid, RMIAmory B. Lovins, Cofounder and Chief Scientist, and Titiaan Palazzi, Special Aid (photos, left), of the Rocky Mountain Institute in Snowmass, CO, presented "Nuclear Power's Competitive Landscape and Climate Opportunity Cost" at "Three Mile Island 35th Anniversary Symposium: The Past, Present, and Future of Nuclear Energy" held at the Thayer School of Engineering at Dartmouth College in Hanover, NH, on 28 March 2014.

Lovins and Palazzi report that, when compared to nuclear power: (1) Efficiency and renewables are far cheaper; (2) Renewables can deliver similar or better service and reliability; (3) Renewables can scale faster;  and (4) For climate protection, efficiency and renewables are far more effective solutions than new nuclear build, which indeed is counterproductive.

Lovins and Palazzi's economic critique extends not only to proposed new atomic reactors, but even to existing, age-degraded reactors. They state "Reactors are promoted as costly to build but cheap to run. Yet as Daniel Allegretti ably described, many existing, long-paid-for U.S. reactors are now starting to be shut down because just their operating cost can no longer compete with wholesale power prices, typically depressed by gas-fired plants or windpower."

Speaking about new build, they point out that "five U.S. units enjoy special nonmarket conditions." These include two proposed new reactors, Vogtle 3 & 4, in Georgia, and two new proposed reactors, Summer 2 & 3, in South Carolina. All four enjoy construction work in progress (CWIP) "nuclear tax" surcharges on ratepayer electricity bills, while Vogtle 3 & 4 also enjoy $8.3 billion in federal taxpayer-guaranteed loans.

Lovins and Palazzi conclude that "efficiency is clearly cheaper than average nuclear operating costs, which exceed 4¢/kWh [4 cents per kilowatt-hour] at the busbar and 8¢ delivered. Thus overall, for saving coal plants’ carbon emissions, efficiency is about 10–50x more cost-effective than new nuclear build—or about 2–12x more cost-effective than just operating the average U.S. nuclear plant."

Regarding nuclear power's retreat, Lovins and Palazzi report:

"Nuclear power also has to run ever faster to stay in the same place as its 1970s and 1980s growth turns into a bulge  of retirements. After the next few years, retirements will exceed all planned or conceivable global nuclear additions, even with all license extensions as shown here. Power reactors’ terminal decline will be over by about 2060—and in view of both competition and aging, this projection by Mycle Schneider [Mycle Schneider et al., World Nuclear Industry Status Report 2013] is more likely to overstate its longevity than its brevity."
They conclude their presentation by stating: "So whether you choose e fficiency, cogeneration, or renewables, just being nearly carbon-free does not make new nuclear build an effective climate solution. Rather, because it saves ~3–50x less carbon per dollar than its main competitors, and deploys slower, new nuclear build reduces and retards climate protection. If climate is a problem, we must invest judiciously, not indiscriminately, to get the most solution per dollar and per year. Anything less makes the problem worse. Nor do we need nuclear power to offset PVs’ and windpower’s variability, or to scale faster than renewables, or to save or make money, because, as we’ve seen, nuclear power cannot do any of these things. So there is no reason to build more nuclear plants. Capital markets, seeing big new costs and risks without offsetting benefits, long ago reached the same conclusion. Existing nuclear plants, a future idea whose time has passed, will simply retire; the only choice is how quickly and at what cost to whom. End of story." (bold added)