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AP IMPACT: Building Costs Rise At US Nuclear Sites

The rising construction costs hit an industry already under financial pressure, after meltdowns last year at the Fukushima Dai-ichi nuclear plant after a tsunami in Japan. NRG Energy wrote off a $481 million investment in two planned reactors in Texas shortly after the accident, citing uncertainties after the Japanese disaster. Other utilities still seeking to build have said they expect the U.S. Nuclear Regulatory Commission will adopt new safety rules in response to the accident; they cannot predict the exact costs.

Industry leaders say the soaring costs could threaten projects that are worth the investment, and send the wrong message to the public.

"It's important to get this project done right because if every time we build a nuclear plant we go substantially over budget, ratepayers will begin to believe we can't do a nuclear project on budget," said Tim Echols, a nuclear power proponent who chairs Georgia's Public Service Commission.

An earlier push to expand the reach of nuclear power in the 1970s was thwarted by a number of obstacles: Electric companies overestimated demand and designed plants they didn't need. They had trouble managing massive construction workforces. Utilities designed nuclear plants as they built, leading to mistakes and slowdowns. Interest rates skyrocketed and the 1979 meltdown at the Three Mile Island nuclear plant in Pennsylvania forced plant operators to meet new rules at additional costs.

To win approval to build at Plant Vogtle, Southern Co. had to promise it would build its plant on budget, particularly as state officials remembered the massive cost overruns that occurred when it built the plant's two existing reactors, said Robert Baker, a former utility regulator who has criticized the project.

The utility has been authorized to spend just over $6.1 billion as its share of the estimated $14 billion project, which was tracking under budget at the end of last year.

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