Williams: No New Nukes for You

It looks like nuclear power is gaining traction. Two utilities recently announced new nuclear power plants. NextEra Energy (NEE) announced plans to expand its Turkey Point facility in Florida by adding two new AP1000 reactors. Southern Company (SO) management put out a tease suggesting they would have an announcement about one or more new AP1000 nuclear plants. These announcements are not commitments. It is unlikely any U.S. nuclear renaissance will gain traction. Large-scale reactors such as Westinghouse Electric's AP1000 only fit in limited cases.

Currently, the U.S. has five nuclear power plants under construction. They are being built for Tennessee Valley Authority (TVA), Southern and Scana (SCG). Only Southern and Scana are building next generation reactors.

TVA restarted its old construction project at Watts Bar. Management's idea was to throw a few dollars at a partially completed nuclear project and get a cheap nuclear unit added into the fleet. At first, it sounded like a good idea. Now, with blown schedules and exploding budgets, it seems that restarting old nuclear projects may not have been the best idea. Consequently, TVA's Watts bar project will limp across the finish line, but other unfinished projects will remain unfinished.

Southern and Scana took a different path. They decided to start new with the best available technology. They are building AP1000s that will produce more than 1,100 megawatts of electric power per reactor.

Currently, Southern is constructing two AP1000s in Georgia. They are adjacent to existing nuclear units at Plant Vogtle in Waynesboro, Ga. Southern is a minority owner and holds a 45.7 equity interest. Majority owners are Georgia's non-profit utilities (municipals and cooperatives). Because Georgia remains a regulated state and because the state authorized the construction, Southern has almost no risk. Most of the financial risk has been hedged against the state's consumers.

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