Nuclear facilities progressing; nuclear revival is not

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When major construction started at Georgia Power's Plant Vogtle nuclear expansion project near Augusta, Ga., a year ago, all eyes were on what was supposed to be the rebirth of the nuclear industry after more than a generation without new plants.

The stakes were high for Georgia Power and its parent, Atlanta-based Southern Co., which became responsible for showing the nation that the nuclear industry could build two reactors without major technical problems, delays or cost overruns. Consumers already were on the hook, paying for Georgia Power's $6.1 billion portion of the project through a fee on their monthly utility bills.

The $14 billion Vogtle expansion is behind schedule, and the nuclear revival hasn't worked out the way the industry had hoped. Ample supplies of cheap natural gas and the sluggish economy are enemies No. 1 and 2. Widespread extraction of natural gas is making it the fuel of choice for utilities, which have little demand for new power plants in a weak economy.

And in August, seven months after granting Southern and SCANA, a South Carolina energy company, licenses to build from scratch the nation's first nuclear reactors in 30 years, federal safety regulators put a moratorium on future nuclear projects until a long-term waste storage plan was developed.

For now, utilities store the high-level spent radioactive fuel at their nuclear plants. But the government is under pressure to find a permanent solution for the fuel rods. The unexpected roadblock from the federal government left the nuclear industry in limbo and has kept the focus solely on Georgia and its neighboring state.

"I can remember a few years ago with people thinking this is the beginning of a nuclear renaissance," said Chuck Eaton, chairman of the Georgia Public Service Commission. "All the eyes of the country are on it."

The PSC was one of several agencies that had to approve Vogtle's expansion. The panel reviews the project's cost and schedule every six months.

Though Southern Co. officials point to progress that has been made on the Vogtle project, there has been no shortage of controversies. Scheduling delays, lawsuits and looming cost increases colored Vogtle's first year. An independent project watchdog has signaled contractor delays in building modules -- parts of the reactor built elsewhere and then assembled at Vogtle's construction site.

Those delays -- over site preparation and initial construction work -- have triggered a $900 million lawsuit by Georgia Power and the municipal and cooperative utilities building Vogtle against the project's two major contractors. The contractors have filed a countersuit.

The lawsuits are two of four between the parties, and the suits are a sign of an escalating fight over who pays for cost increases.

The additional money would be on top of the $6.1 billion customers started paying in 2011. Part of that amount covers the financial costs until the reactors start producing power -- currently scheduled for 2016 and 2017 though delays may push back the schedule as much as a year. The rest will pay for the project's construction costs.

Georgia Power in August said delays have made Vogtle's cost rise to $6.2 billion, but the utility has not asked to collect any additional money from customers.

But critics worry that might change.

"We're seeing a lot of red flags," said Liz Coyle, deputy director for Georgia Watch, a consumer rights group. "It's the little guy in Georgia that will feel all of the pain."

From the point of view of Southern and Georgia Power, the past year has been a success: Construction is more than one-third complete, and the workforce is building up to 5,000. One of the containment vessels -- a shell that encases the nuclear reactor -- is finished.

"Construction of the plant is progressing beautifully," said Tom Fanning, Southern's president and chief executive officer. "We're moving forward on this very important project, and I'm hopeful that we'll build more."

In South Carolina, SCANA's nuclear project faces similar challenges. Consumers are paying for the costs as they are spent and then approved by South Carolina utility regulators.

"We believe the project is going as reasonably as can be expected," said Dukes Scott, executive director of the South Carolina Public Service Commission's regulatory staff. "I don't think it's reasonable to not have some schedule updates and some budget issues."

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