Category Archives: CWIP

Already: Solar grid parity without subsidies in India and Italy

Solar power is going so well worldwide that Deutsche Bank has just
increased its projections for global demand,
noting that India and Italy have already in 2013 reached grid parity
without subsidies with other sources of energy,
and it expects the rest of the world to follow as early as 2014.
The big winner is rooftop solar.

Is Georgia paying attention?

Becky Beetz wrote for Global PV 26 February 2013,

Deutsche Bank: Sustainable solar market expected in 2014,



Buoyed by bullish demand forecasts, and increasing utilization rates
and pricing, Deutsche Bank forecasts a solar market transition from
subsidized to sustainable in 2014. Italy REC solar photovoltaic
plant

The German bank has raised its 2013 global solar demand forecast to
30 GW — representing a 20% year-on-year increase — on
the back of suggestions of strong demand in markets including India,
the U.S., China (around 7 to 10 GW), the U.K. (around 1 to 2 GW),
Germany and Italy (around 2 GW).

Rooftop installations are, in particular, expected to be a main
focus, says Deutsche Bank. A trend for projects being planned with
either “minimal/no incentives” has also been observed, despite the
belief that solar policy outlooks are improving, particularly in the
U.S., China and India, and “other emerging markets”.

More analysis by
Jeff Spross in ThinkProgress 3 March 2013,

Solar Report Stunner: Unsubsidized ‘Grid Parity Has Been Reached In India’, Italy–With More Countries Coming in 2014.

As Renew Economy also
points out, this is the third report in the past month

Continue reading →

Levy Co. FL nuke likely not to be built

Cost already sunk Kewaunee, Calvert Cliffs, Crystal River, and are gnawing
away at San Onofre: now it looks like new owner Duke is not
likely to build Progress Energy's Levy County, Florida reactor.
All that plus even in Georgia, even against all-powerful Georgia Power,
there's a reaction against the cost of the always-later always-more-expensive
new nukes at Plant Vogtle on the Savannah River.
A reaction that's getting written up in the Valdosta Daily Times.

In the VDT today from AP,

Some leaders souring on nuclear power costs.
I'm quoting from the abcNews version
because it includes the author's name, Ray Henry,
and the original date, 3 March 2013.
I added all the links and images.



As the cost of building a new nuclear plant soars, there are signs
of buyer's remorse.

The second-guessing from officials in Georgia and Florida is a sign
that maybe the nation is not quite ready for a nuclear renaissance.
On top of construction costs running much higher than expected, the
price of natural gas has plummeted, making it tough for nuclear
plants to compete in the energy market.

In Georgia last week, Southern Co. told regulators it needed to
raise its construction budget for Plant Vogtle in eastern Georgia by
$737 million to $6.85 billion. At about the same time, a Georgia
lawmaker sought to penalize the company for going over budget,
announcing a proposal to cut into Southern Co.'s profits by trimming
some of the money its subsidiary Georgia Power makes.

And Southern Company and Georgia Power slipped the Plant Vogtle schedule
still more,

from 15 to 19 months late.

The legislation has a coalition of tea party, conservative and
consumer advocacy groups behind it, but faces a tough sale in the
Republican-controlled General Assembly. GOP Rep. Jeff Chapman found
just a single co-sponsor, Democratic Rep. Karla Drenner.



That's

HB 267: Financing costs; construction of nuclear generating plant.
And AP failed to mention

Georgia Sierra Club's support for HB 267.

As a regulated monopoly, Georgia Power currently earns about 11
percent in profits when it invests its own money into power
projects. Chapman's legislation would reduce those profits if the
nuclear project is over budget, as is the current projection.

In Florida, there's a move to completely
eliminate Construction Work in Progress (CWIP)
such as is being used in Georgia to pre-fund the new Plant Vogtle nukes.

In Florida, lawmakers want to end the practice of utilities
collecting fees from customers before any electricity is produced.

Florida only recently got CWIP, but Progress Energy has been quick to profit by it:

Continue reading →

HB 267 Would Limit Georgia Power’s Profits on Vogtle’s Cost Overruns —GA Sierra Club

There’s still time to contact your state legislators about stopping
Georgia Power profitting from cost overruns on the new nukes
at Plant Vogtle.
Georgia Sierra Club spells out why.



Georgia Power’s expansion at Plant Vogtle will bring us power that
is dangerous, expensive and unnecessary.

You may remember a controversial bill the Georgia Legislature
approved in 2009,

SB 31, the Nuclear Construction Work in Progress
(CWIP) bill, which forces Georgia Power ratepayers to pay the
financing costs during construction, rather than over the life of
the plant. Large users of electricity are exempt from the charge,
but residential and mom and pop businesses have been paying for two
years.

Even after that sweetheart deal, the Public Service Commissioners
scrapped their staff

proposal to stop the company from profiting on
cost overruns for the project after they top $300 million.

The most recent reports from the independent monitor established by
the PSC says

that the project is months behind and as of December,
$88 million over budget. Georgia Power gets to earn 11.15% return on
all expenses approved by the PSC, so the more they have to spend,
the more they get to make and the more ratepayers get to pay!

Putting the profit issue aside for the moment, if the Georgia PSC
ever decided to disapprove cost overruns, Georgia Power could take a
page from the Mississippi Power playbook and just get the
Legislature to let them issue bonds to pay for the work.


HB 267 by freshman Rep. Jeff Chapman excludes the collection of any
profits on cost overruns beyond the

$6.4 billion the Public Service Commission has approved.
The bill is co-sponsored by Avondale
Estates Democrat Karla Drenner, who is a member of the Utilities
Committee, to which the bill was assigned. Passage of this bill
would provide an incentive for Georgia Power to keep expenses down
at Vogtle, something that SB 31 failed to do.

It isn’t fair for Georgia Power to profit to the tune of over 11% on
delays, overruns and mismanagement, so

ask your State Representative to support HB 267.

-jsq

From 15 to 19 months late: Plant Vogtle nukes

Surprise!
The already-billing but not-built new nukes at Plant Vogtle
are going to be even later and cost even more.
In December they were to be
15 months late;
now it’s 19 months late,
and the cost overrun expected is $740 million.
History is repeating itself from

the last time Southern Company
and Georgia Power built nukes on the Savannah River.
How about we pass

HB 267 to stop Georgia Power from charging that cost overrun to customers?

Kristi Swartz wrote for the AJC yesterday,

Vogtle nuclear project to take longer, cost more,

Georgia Power’s Plant Vogtle nuclear expansion project will take
about 19 months longer to complete than originally expected and cost
about $740 million more than originally thought, the company said
Thursday.


Joseph A. “Buzz” Miller, Executive Vice President – Nuclear Development Southern Nuclear Operating Company
Georgia Power said its share of the estimated $14 billion project
will rise to $6.85 billion, up from $6.11 billion, because of
increased capital costs and additional financing costs. Customers,
who have been paying the financing costs since 2011, now will pay
them for a longer period of time.

And the amount Georgia Power customers have to pay
for

Construction Work in Progress (CWIP) keeps
ratchetting up:

Continue reading →

Renewable energy much needed in Georgia —John S. Quarterman

My op-ed in the VDT today; I’ve added links, plus some more after the op-ed.



Finally! Kewaunee, Calvert Cliffs, and now Crystal River
permanently closing say it’s time for Georgia to stop wasting money
on Southern Company’s already over-budget and increasingly-late
nukes and get on with solar power and wind off the coast: for
jobs, for energy independence, and for clean air and plenty of
clean water.

February 2013:

Duke Energy is closing the Crystal River nuclear
reactor

(Tampa Bay Times, 6 Feb 2013),
160 miles south of us, because

nobody wants to pay to fix it:
between “$1.5 billion and $3.4 billion,
plus what it costs to buy power to replace
what Crystal River would have produced while it is
being repaired”

[Charlotte Business Journal, 11 Jan 2013].
November 2012:

NRC terminated Maryland’s Calvert Cliffs 3

(NRC 1 Nov 2012)
after

Constellation Energy dropped out because the cost “is too high
and creates too much risk for Constellation”

[Bloomberg 10 Oct 2010].

Continue reading →

HB 267 Financing costs; construction of nuclear generating plant






As promised,
a bipartisan bill was filed Thursday to stop Georgia Power from
charging for nuclear cost overruns on Plant Vogtle; this could free up some financing for Georgia to move ahead on solar and wind power.


2013-2014 Regular Session – HB 267
Financing costs; construction of nuclear generating plant; change calculation that utility can recover from customers,

A BILL to be entitled an Act to amend Code Section 46-2-25 of the
Official Code of Georgia Annotated, relating to the procedure for
changing any rate, charge, classification, or service and the
recovery of financing costs, so as to change the calculation used
under certain circumstances to determine the costs of financing
associated with the construction of a nuclear generating plant that
a utility may recover from its customers; to provide for related
matters; to provide an effective date; to repeal conflicting laws;
and for other purposes.

The bill would add this text to Georgia Code:

…provided, however, that in the event the amounts recorded in the
utility’s construction work in progress accounts plus the amount of
all financing costs accrued on any construction work in progress
accounts exceeds the costs approved by the commission in the
original certificate of the nuclear generating plant granted under
Code Section 46-3A-5, the cost of equity portion of the financing
costs shall be calculated using a rate no higher than the utility’s
actual cost of debt.

Let’s see what Georgia Power does to fight this one.
So far, it’s

Continue reading →

Bill against Vogtle nuke overruns to be filed Thursday

It’s about time. -jsq

Jeanne Bonner wrote for GPB today

Vogtle Cost Overruns Targeted,

A state
lawmaker wants to prevent Georgia Power from reaping profits on cost
overruns at Plant Vogtle. Rep. Jeff Chapman will file a bill
Thursday that would bar the utility from making money on anything
other than the certified cost of the nuclear power plant it’s
building in eastern Georgia.



Chapman said before writing the bill, he sent a letter to Georgia
Power, asking the company to forego the profits.

He said he hasn’t had a response.

Under a 2009 bill, the company can collect in advance the financing
costs for the two reactors it’s building near Augusta.

Chapman, a Brunswick Republican, says he supports the project. But

Continue reading →

Carbon bubble? Solar and wind erode coal, gas, and biomass credit quality —Moody’s



In Europe it’s already happening: solar and wind are causing
bond-rater Moody’s to warn of downgrades of energy companies
that depend on heat from burning coal, gas, or biomass.
Moody’s earlier even warned the Bank of England
of a potential carbon bubble developing.
If combustion energy plants are affected like this,
the credit effects will be even bigger on even-more-expensive
nuclear plants, which Moody’s called a

bet-the-farm risk way back in 2009.

James Murray wrote for businessGreen 6 Nov 2012,

Moody’s: Renewables boom poses credit risk for coal and gas power plants:
Credit ratings agency warns increases in renewable power have had ‘a
profound negative impact’ on the competitiveness of thermal
generation companies,

“Large increases in renewables have had a profound negative impact
on power prices and the competitiveness of thermal generation
companies in Europe,” said Scott Phillips, an assistant vice
president and analyst at Moody’s Infrastructure Finance Group, in a
statement.

“What were once considered stable companies have seen their business
models severely disrupted and we expect steadily rising levels of
renewable energy output to further affect European utilities’
creditworthiness.”

And not just rising, rising increasingly

Continue reading →

15 month delay for new Plant Vogtle nukes —state inspector at PSC



Southern Company's new nukes are delayed at least fifteen months,
at least a billion over budget and rising,
and not organized to meet safety filing requirements,
yet the Georgia PSC yesterday
let SO pass the buck to contractors and Georgia Power
continue charging customers for that boondoggle,
despite 40 to 1 opposition from attendees.

Ellen Reinhardt wrote for GPB News yesterday,

Plant Vogtle Construction Costs Rising,

An independent auditor told utility regulators Plant Vogtle
construction will be delayed at least 15 months and go millions of
dollars over budget.

Nuclear engineer William Jacobs said poor construction material,
contractor mistakes and oversight delays will mean the Unit 3
reactor won't be ready until July of 2017.

That's 15 months later than planned.

Surprise!

From $0.66 to $8.87 billion: original Plant Vogtle nuclear costs
Who could have expected that, given that back in the 1970s and
1980s

costs blew up 26 times the original estimate.
Back then SO complained about paperwork after Three Mile Island.
They're trying that same excuse now,
but even a former Commissioner-turned-lobbyist is incredulous,
as Kristi Swartz reported for the AJC yesterday,

Monitor: Paperwork problems a drag on Vogtle schedule,

“It's taken eight months to handle paperwork
deficiencies?” asked Bobby Baker, a former PSC commissioner
who now represents Resource Supply Management, an energy consultant
that works with large commercial, institutional and industrial
electric customers.

A current Commissioner was almost as incredulous:

Continue reading →

Original nuclear Plant Vogtle cost overruns

Why should we expect Southern Company to be any better at controlling
costs now than back in the 1970s and 1980s when its original
nukes on the Savannah River went massively over budget?
Massively as in 26 times as much per unit as originally projected.

Kristi Swartz wrote for the AJC 30 Jan 2012,

A financial look at Plant Vogtle nuclear projects,


From $0.66 to $8.87 billion: original Plant Vogtle nuclear costs
When the two original nuclear units at Plant Vogtle were planned,
the total cost estimate was $660 million.

Yet, as

Jon Gertner reported for NYTimes 16 July 2006,

The plant took almost 15 years to move from blueprints to being
operational. And by the time it began producing electricity in the
late 1980’s, its total cost, $8.87 billion, was so far overbudget
that Vogtle became yet another notorious example of the evils of
nuclear energy….

The grand plan was to have four reactors. Instead, it was scaled
back to two, Vogtle Unit 1 (finished in 1987) and Vogtle Unit 2
(1989).

That’s right, 4 nuclear units were planned for $660,000,000
fifteen (15) years later only 2 units were built,
for $8,870,000,000.
That’s more than $8 billion in cost overruns,
or more than 13 times the original cost estimate.
So per unit, that’s more than 26 times the original estimate,
or more than $4 billion per unit.

Swartz provided a handy table of cost estimates by year:

Continue reading →