Herman K. Trabish wrote for Green Tech Media 22 February 2012, The Nuclear Industry’s Answer to Its Marketplace Woes: Construction Work in Progress (CWIP) financing shifts the risks of nuclear energy to utility ratepayers,
A sign of the nuclear industry’s difficult situation in the aftermath of Fukushima is a proposal before the Iowa legislatureAnd the Iowa Utilities Board staff agreed with Cooper and recommended against CWIP.
that would allow utility MidAmerican Energy Holdings, a subsidiary of Warren Buffett’s Berkshire Hathaway, to build a new nuclear facility in the state using Construction Work in Progress (CWIP) financing (also called advanced cost recovery).
“Construction Work in Progress was intended to circumvent the core consumer protection of the regulatory decision-making process,”
“Investment in nuclear power is the antithesis of the kind of investments you would want to make under the current uncertain conditions,” explained nuclear industry authority Mark Cooper, a senior fellow for economic analysis at Vermont Law School’s Institute for Energy and the Environment. “They cannot raise the capital to build these plants in normal markets under the normal regulatory structures.”
CWIP would allow the utility to raise the money necessary to build a nuclear power plant by billing ratepayers in advance of and during construction.
“Construction Work in Progress was intended to circumvent the core consumer protection of the regulatory decision-making process,” Cooper explained. “It exposes ratepayers to all the risk.” The nuclear industry’s answer to its post-Fukushima challenges, he said, “is to simply rip out the heart of consumer protection and turn the logic of capital markets on their head.”
His message to policymakers is simple, Cooper said. “This is an investment you would not make with your own money. Therefore, you should not make it with the ratepayers’ money.”Meanwhile, in Georgia:
Vogtle has just been licensed by the Nuclear Regulatory Commission (NRC), causing a stir among environmental activists. To Cooper, the NRC’s decision on Vogtle was “a non-event” because, he said, “The morning after the license was issued, nobody on Wall Street woke up and said, ‘Hey! Now I’m going to buy in!'” The licensing decision had, he said, “no effect on the economics.”And the people of Georgia can demand Georgia Power stop putting its customers money where its mouth is by demanding an end to CWIP.
More significantly, he added, the Obama administration has not advanced the Vogtle $8.33 billion federal loan guarantee that has been on hold since last year because of the budget and schedule problems.
“The Obama administration talks about nuclear power,” Cooper said, “but it has stopped putting the people’s money where their mouth is.”
What can we do for power instead?
Cooper pointed out that renewables are an economically viable alternative to nuclear power. “They always say it’s hard to do renewables and it’s hard to convince people to do efficiency,” he explained. “But then they always assume it’s easy to build nuclear. And it’s not.”New technology like Dr. Sidney Smith has already developed with his electric meters to enable a commodity market in solar power, to provide lower rates for customers, resilient power sources, energy independence, and profit for all involved. Georgia Power could stop being a 20th drag and become a 21st century leader. Or, if gapower won’t lead, we can tell it to get out of the way so we can get on with distributed renewable energy.
“Base load,” Cooper said, “is so 20th century.” Given “the sum total of the tools we have for integrating resources and managing the grid,” he explained, “it is time for utilities that are not transitioning to grow up and adopt some new technology.”