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« Westinghouse bankruptcy sparks “negative outlook” for U.S. nuclear construction projects, threatens U.S. taxpayers with $8.3 billion default | Main | Toshiba CEO signals Westinghouse Nuclear is worthless, offers option to pay for sale of company »
Thursday
Mar302017

Nuclear Fool's Day?! Good and bad news after Westinghouse bankruptcy announcement

The bankruptcy announcement of the nuclear manufacturer of roughly half of the world’s nuclear reactors, Westinghouse Electric Company, sent a reverberating but much anticipated shockwave throughout the entire global industry. The bankruptcy announcement is followed by a blinkered announcement by the United Kingdom’s Office of Nuclear Regulation for  design approval of a Toshiba-Westinghouse AP-1000 pressurized water reactor project in England. NuGeneration Ltd is seeking to wade into the same financial tar pit that is swallowing whole reactor projects in the United States. NuGen wants a construction permit for three AP-1000 units for Moorside, England.

The bankruptcy filing is one more self-inflicted torpedo into the once lauded "nuclear renaissance" revealed as a relapse into the inherent financial failure of nuclear power. More specifically, the fate of four construction projects still stumbling forward in the United States is deeper in question.

As reported by the Southern Alliance for Clean Energy (SACE), four new Toshiba-Westinghouse AP1000 reactors in the American Southeast were supposed to be commercially operational by April 1, 2017: Vogtle Unit 3 in Georgia, and Summer Unit 2 in South Carolina, were scheduled to come online April 1, 2016; and Vogtle 4 and Summer 3 one year later. However, many billions of dollars of cost overruns, and years-long schedule delays, are the root cause of Japanese giant Toshiba's subsidiary, Pittsburgh-based Westinghouse Nuclear, declaring bankruptcy on March 29. Now, as stated by the chair of the GA Public Service Commission, "all bets are off," re: completion of all four reactors by the end of 2020, the current, delayed deadline.


As reflected in press statements by watchdog groups like Nuclear Watch South and SCAMA (a play on the name of nuclear utility SCANA), there is hope that the partially constructed reactors will be abandoned, and never operated. The good news is this would avert many decades of risk of catastrophic releases of hazardous radioactivity due to core meltdown(s), not to mention "routine" radiation releases; it would also avert the generation of thousands of tons of forever deadly high-level radioactive waste. The bad news is, ratepayers in both GA and SC have already paid through the nose for the partially constructed reactors. After nine rate hikes, nearly 20% of SC electric consumers' bill payments now go towards the Summer nuclear new build. Such advance cost recovery, or Construction Work in Progress (CWIP), "nuclear tax" surcharges are illegal in most states (for example, as decided by popular referendum in Missouri in 1976). In addition, Vogtle 3 & 4 were awarded an $8.3 billion federal taxpayer-backed loan guarantee by the Obama administration. If loan repayments go into default, the U.S. Treasury will lose that entire amount -- 15 times more money than was lost in the Solyndra solar loan guarantee default. Critics, including Beyond Nuclear, have warned about this economic moral hazard with a radioactive twist since nuclear loan guarantees were first proposed, in Vice President Dick Cheney's Energy Task Force Report in May 2001.