â¿¿ Plant Summer in South Carolina, expected to cost around $10.5 billion, has seen costs jump by $670 million; but with lower interest rates and cheaper-than-expected labor; the owners assert the project is still on or under budget. A deadline to put the first new reactor online has been delayed from 2016 to 2017; the second reactor is now eight months ahead of schedule, targeted for early 2018.
Southern Co. and others in the nuclear business say cost overruns are expected in projects this complex, and that they are balanced out by other savings over the life of the plant. Southern Co. expects Plant Vogtle will cost $2 billion less to operate over its 60-year lifetime than initially projected because of anticipated tax breaks and historically low interest rates.
Regulators have been trying to make it easier to build, encouraging the use of off-the-shelf reactor designs that get approval in advance. New construction techniques are supposed to require less in-the-field assembly, making building quicker and reducing human error. Interest rates and labor costs have been down after a bruising recession.
"It's a down environment economically," said Steve Byrne, president of generation and transmission for SCANA's South Carolina Electric & Gas Co., one of the utilities building Plant Summer's reactors. "It's terrible for the country, but it's a great time to be building" a nuclear facility.But the economy is also working against progress on new construction. The next company in line to build, Progress Energy, has pushed back construction plans for two reactors in Florida because of the economy, low demand and extremely cheap natural gas. It expects its first new reactor to be finished in 2024. The plants burning natural gas are far cheaper to build than nuclear power plants. But utility executives say they need a diversified mix of power plants, including nuclear, because relying too heavily on a single fuel like natural gas backfires if prices go up.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV