State News

July 24, 2013

FACT CHECK: Deal mistaken on nuclear plant costs

ATLANTA — Gov. Nathan Deal claimed last week that environmental litigation was running up the construction costs of a nuclear power plant in Georgia, despite abundant evidence to the contrary from the utility building it and an independent state monitor.

The Republican governor is a longtime supporter of the nuclear power industry. He made the remark last week just before Southern Co. executives gave their first public testimony since announcing the utility needed another $737 million to build two reactors at Plant Vogtle (VOH’-gohl), raising the project budget to $6.85 billion. That cost is ultimately paid by the utility’s customers, unless state regulators object.

A reporter asked Deal about the rising costs on July 16, shortly before the state’s Public Service Commission started a hearing on the utility’s spending.

“Well, you know, there’s an irony to that,” Deal said. “That is, the people who are in fact involved in costing through the litigation process then become the ones who complain about the cost of the litigation being initiated. There’s something a little bit unusual about being able to be the parties that are involved in running up the costs and then, on the other hand, complain about the costs themselves.”

But the utility and regulators most closely involved say licensing, production and construction problems have caused delays and increased costs, not legal challenges.

Stephen Smith, executive director of the Southern Alliance for Clean Energy, has fought the project legally and called Deal’s comments “factually inaccurate and inflammatory rhetoric.”

The Southern Co. utility, which owns 46 percent of the new reactors, has not cited litigation as a cost driver in its recent filings and testimony. It would have an incentive to blame environmental groups if litigation resulted in delays and major costs.

Delays are a tremendous concern for utilities building nuclear plants. If construction takes longer than expected, the interest charged on borrowed money and other costs stack up, producing a big bill for utility customers.

Environmentalists have challenged the project over river dredging and nuclear waste storage issues, for example, though none of their objections raised before the U.S. Nuclear Regulatory Commission ever prompted an order that halted licensing or stalled construction work. In May, a federal appeals court ruled against environmentalists who wanted to stop the NRC from approving new nuclear plants until the agency completes its review of a 2011 nuclear meltdown in Japan. Locally, groups have also sued to block Southern Co. from making its customers pay for the project’s finance charges before the new reactors start producing electricity.

Deal spokesman Brian Robinson said those lawsuits cause delays, but Southern Co. has never cited them as a factor when its officials testify under oath about why construction schedules have slipped. Robinson also said he believed Deal was speaking more generally about environmental lawsuits targeting the power industry, though Deal’s answer does not suggest he was addressing larger issues.

Rather than litigation, Southern Co. said delays were caused by a longer-than-expected federal review process, trouble implementing its design and difficulties getting a manufacturer to produce large parts on time and while meeting strict quality control rules.

One big delay was self-inflicted. Workers installed metal bars in a reactor foundation in ways that differed from the original design. While federal officials ultimately accepted those bars as safe, the approval process held up major construction work for months.

A nuclear engineer hired by the state to monitor construction, William Jacobs Jr., warned in a December report that he is concerned one lawsuit could cause delays and extra costs, though it is unrelated to environmental concerns. Rather, the plant’s owners and project contractors are suing each other over which firms are responsible for roughly $930 million, mostly in additional licensing costs.

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Associated Press writer Jaime Henry-White contributed to this report. Follow Ray Henry on Twitter: http://twitter.com/rhenryAP.

 

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