The Wrong President got Fired
Technically, Lonnie Carter the CEO of the nuclear utility Santee Cooper is retiring early. But most newspapers reporting on the 58-year-olds departure as the first casualty from the cancellation of the V. C. Summer nuclear power plants. It was a 75% over budget and at least 3 years behind schedule.
The person who should be getting fired is Tom Fanning the CEO of Southern Company. Fanning is dodging the opportunity to cancel these last two reactors under construction in the US when there are numerous justifications to get out of the project. Because of Fanning’s stubborn commitment to the Vogtle reactors, the rate payers of Georgia will pay dearly for decades for electricity that they don’t need and opportunities for climate disruption abatement will be lost as resources are misallocated to these reactors.
Can Vogtle learn from Summer? The Vogtle reactors are quite similar to the Summer reactors that Carter canceled this July. Both sites were adding two Westinghouse AP 1000 large conventional reactors (a design which has never successfully be completed). [Westinghouse went bankrupt in March of this year.] Both were expansions to existing plants. Both Summer and Vogtle started the licensing process in 2008, both began construction in 2013, both were supposed to be finished before 2020 to get a significant tax credit. Neither could make that deadline because they are both so delayed (costing ratepayers even more). Both were only possible because their respective PUC’s gave them nearly a blank check in that it let them start billing rate payers years and perhaps decades before the reactors went online. Both of them got offered billions for Toshiba (Westinghouse’s parent company) as a settlement (though it is unclear if Toshiba will stay in business long enough to pay anything). Both had huge still unresolved technical problems in building the plant.
So why is Fanning and Southern Company continuing this uneconomical reactor project? Because Fanning personally and Southern Company will benefit significantly even if the construction of these reactors lose money or if they are later abandoned. Despite Vogtle being over $3 billion over budget, the nuclear utility has already made over $1 billion in profits for this fiasco. This is because they are paid cost plus profit, even when the project is mismanaged and over budget. Fanning’s personal compensation increased 34% last year to over $15 million per year when the Vogtle losses and delays were well understood.
Southern Companies nuclear engineers are busy crafting lies to submit to the Public Service Commission (PSC). This PSC has already indicated that it will basically give them what ever they want. The form of this huge lie is that it will only cost $27 billion to complete this pair of reactors, nearly twice the original cost estimate. These same engineers were equally confident of their first cost estimate for this project. What will the actual cost of these reactors be? If it is average for US built reactors it will be closer to $42 billion, but it does not matter, for Southern Company has a whole collection of deceptions lined up to buttress their current lies.
Some lies are easy. Georgia Power has terrifically mismanaged the project, in part by their own design. They have flatly refused to use the computerized tracking systems (Integrated Project Systems – IPS) which are industry standards for large complex jobs of this type. They have completely captured the regulator who is doing basically no analysis of this project and simply granting delays and budget increases whenever they are asked for. The Georgia Public Service Commission (PSC) has not brought in outside experts to review the design or delays. The PSC continues to pretend that the sunk cost in this project matter, they do not economically only politically. They have not head public hearings. Nor have they listened to expert critics who were warning them of the myriad problems this project presents.
We will hear about how we need a mix of fuels (with no talk about how expensive they are). We will hear about how nuclear reactors are important for national security (despite years of denying the link between reactors and bombs). We will hear that these reactors will produce carbon free electricity (when renewables and battery storage OR energy efficiency would produce/save more power for less money, with a smaller carbon footprint). Finally, we will hear building reactors is important for the future of nuclear power in the US.
Let’s be clear, large scale nuclear reactor construction in the US is dead. Westinghouse bankruptcy is important. The recent canceling of the Summer, Levy, and Lee reactors brings to an end all likely full sized US reactor construction, except Vogtle. The nuclear Renaissance is over, we are hopefully heading into the nuclear dark ages.
This is the moment for the anti-nuclear movement and the citizens of Georgia to keep pounding on the door of the Georgia PSC and tell them we don’t want this failed project to waste more money and distract from the important work of climate disruption mitigation. Vogtle is a failed project being propped up by poor legislation and greedy utilities which don’t actually care about cost effective power generation or climate disruption.