Platts - Friday, August 08, 2008 http://www.platts.com ------------ Deadline extension request in Harris proceeding rejected Washington (Platts)--7Aug2008 The Atomic Safety and Licensing Board, or ASLB, overseeing the Harris new plant proceeding rejected a request by the Board of Commissioners of Orange County, North Carolina for additional time to submit an intervention petition. The ASLB said in its August 5 order that the county did not show "good cause" for a reason why the August 4 deadline should be extended by 60 days in the proceeding of Progress Energy's request for a license to potentially build and operate two additional reactors at the site, where one reactor is already operating. The county commissioners said they wanted to hold a hearing to get input from area residents and from other counties, cities and towns. Harris-1 is in Wake County, North Carolina; Orange County commissioners said its citizens live within the plant's 50-mile ingestion pathway emergency planning zone. The ASLB said the hearing notice was published on June 4 but noted the application was submitted on February 19, giving the county more than five months to consider whether to file a petition to intervene. ------------ New nuclear plants can compete with fossil capacity: NEI study Washington (Platts)--6Aug2008 Despite projected high capital costs, new nuclear units in the US could produce electricity at a cost that is competitive with coal- and natural gas-fired generation, but federal loan guarantees and "supportive state policies" are "essential," the Nuclear Energy Institute said Wednesday in a report. NEI, the nuclear industry's Washington-based trade group, said its financial model of new generating projects shows "new nuclear power plants can be competitive," even with total project costs exceeding $6,000/kW, including engineering, procurement and construction and owners' costs and financing. "Although nuclear project costs are undeniably large, total project cost does not measure a project's economic viability. The relevant metric is the cost of the electricity produced by the nuclear project relative to alternative sources of electricity and relative to the market price of electricity at the time the nuclear plant comes into service," the report said. NEI said "credible estimates of overnight capital costs" for new nuclear units range from $2,400/kWw to as much as $4,540/kW. "Analysis by generating companies, the academic community, and financial experts shows that even at capital costs in the $4,000/kW to $6,000/kW range, the electricity generated from nuclear power can be competitive with other new sources of baseload power, including coal and natural gas," it said. "NEI's modeling shows that a merchant nuclear plant with an 80-to-20 debt-to-equity structure, supported by a federal loan guarantee, will produce electricity in the range of $64 [/MWh] to $76/MWh. The range reflects EPC costs from $3,500/kW to $4,500/kW. A high-cost ($4,500/kw EPC cost) nuclear plant producing electricity at $76/MWh is competitive with a gas-fired combined-cycle plant burning $6-8/MMBtu gas or an [super-critical pulverized coal] plant," NEI said. "Assuming a 50-50 debt-to-equity ratio typical of a regulated electric company, and assuming the company is permitted to recover the cost of capital during construction (CWIP), NEI's financial model shows the levelized cost of electricity from the plant would range from $74/MWh to $88/MWh -- competitive with a gas-fired combined cycle plant burning gas priced at $8-10/MMBtu or an IGCC [integrated gasification combined cycle] plant without carbon capture and sequestration," it said. "These results are absent any restriction on carbon dioxide emissions. With regional or national programs that put a significant price on carbon emissions, nuclear power becomes even more competitive," NEI said. The report surveys current cost estimates for planned new nuclear units in the US and finds the wide variation in the projections is the result of such factors as uncertainty about escalation of commodity prices and wages; the fact that design work is not complete, making preciese cost estimates impossible and the fact that some early estimates did not include all the costs involved in the construction. NEI said its modeling "shows that, in the absence of a significant price for carbon, loan guarantees and supportive state policies (such as CWIP) are essential for merchant and regulated nuclear plants, respectively. Without this federal and state government support, it is difficult to see how new nuclear plants can be financed and constructed competitively. With this support as a transition to a carbon-constrained world, the next nuclear plants should be competitive and economically viable." --Steven Dolley, steven_dolley@platts.com ------------ NRC accepts license application for new Summer reactors Washington (Platts)--6Aug2008 The US Nuclear Regulatory Commission on August 6 said it had accepted for review a combined construction permit-operating license application for two new reactors at the Summer site near Columbia, South Carolina. NRC's accepting, or docketing, of the application means it has sufficient information to begin a full technical review. The new Westinghouse AP1000 units, about 1,100 MW each, are to be built about a mile from the existing Summer reactor and will be owned by South Carolina Electric & Gas (55%) and state-owned electric and water utility Santee Cooper (45%). SCE&G owns about two-thirds of the existing Summer unit, and Santee Cooper owns the remainder. SCE&G and Santee Cooper submitted the application to NRC March 31. SCE&G has said it anticipates NRC's review of the application will take at least three years, with a decision in 2011. SCE&G is targeting the first new unit--Summer-2--to come online in 2016 and Summer-3 in 2019. ------------ KCP&L looks at nuclear power in light of regulatory uncertainties Portland, Maine (Platts)--6Aug2008 In response to the uncertainty surrounding possible greenhouse gas emission regulations, Kansas City Power & Light wants to begin exploring adding nuclear generation to its supply mix, according to a long-range resource plan filed Tuesday with Missouri regulators. The plan also calls for adding 400 MW of wind capacity by 2012, "aggressive" energy efficiency programs for commercial and industrial customers and continued demand-side management for all customers, the 25-year resource plan said. By 2029, KCP&L will need to add 154 MW of peaking resource, the plan estimates. Potential GHG restrictions present the greatest area of uncertainty for the utility industry, followed by natural gas prices and availability, according to the Great Plains Energy subsidiary's filing. "Key uncertainties may not only alter the selection of future generating technologies but also have the potential to force retirement of a portion of existing generation," KCP&L said. The company said that this could lead to its "inability to meet the demands of the service territory for a number of hours for a number of years." KCPL found that it was economic, even if current federal production tax credits are not renewed, to add wind resources to its supply mix. Wind generation offers "considerable risk mitigation" for GHG restrictions and rising natural gas prices, the utility said. KCPL wants to discuss the possibility of exploring nuclear generation with Missouri Public Service Commission staff before moving ahead on the issue. It also wants to develop a stakeholder process to help generation consensus on its "sustainable resource strategy." ------------ US uranium production down 17% in first-half 2008 Washington (Platts)--5Aug2008 US uranium production in first-half 2008 dropped 17% to 1,883,504 lb from 2,282,273 lb during first-half 2007, DOE's Energy Information Administration said in a report released August 5. Second-quarter 2008 production totaled 1,073,315 lb, down from 1,119,536 lb the same time last year, it said. Production came from one mill ? Denison's White Mesa in Utah ? and five in-situ-leach mines, the same as in 2007, EIA said. The mines are Mestena Uranium's Alta Mesa in Texas; Crow Butte Resources' Crow Butte in Nebraska; Uranium Resources' Kingsville Dome and Vasquez, both in Texas; and Power Resources' Smith Ranch-Highland in Wyoming. ------------ Enhanced NRC oversight of Cooper to continue Washington (Platts)--4Aug2008 Cooper will continue to be the focus of stepped-up NRC oversight after the agency finalized a "white" finding at the plant August 4, saying a violation occurred that affected the reliability of one of the plant's emergency diesel generators. In an August 4 press statement, NRC said the white finding indicates a low to moderate safety significance and was based on an NRC inspection report issued in May. "The inspection identified a violation involving improper electrical maintenance of an emergency diesel generator which resulted in failure during testing on January 15," the agency said. Diesel generators supply power to plant safety systems in the event of a loss of offsite power. NRC said the Nebraska Public Power District has taken corrective action to prevent a recurrence but that "the failure was significant." NPPD has 30 days to appeal the decision. Increased NRC oversight could mean higher costs for the utility. Cooper is in the degraded cornerstone column, or column 3, of NRC's five performance rating categories. NRC action ranges from management meetings with plants in column 1 to orders for plants in column 5 to shut down. No plants are in column 5. ------------ Two new reactors at Vogtle could cost up to $14 billion Washington (Platts)--1Aug2008 Two new reactors at the Vogtle site could cost up to $14 billion, Georgia Power said in an integrated resource plan filed August 1 with the Georgia Public Service Commission. Georgia Power said in the filing that its 45.7% share of the new reactors would cost about $4.4 billion if the PSC allows it to include the costs in its rate base as construction progresses. The Southern Co. subsidiary added, however, that if it is not allowed to do that, its costs for the two AP1000s would increase almost 30% to $6.4 billion. At those rates, the Westinghouse units would cost $9.6 billion or $14 billion, respectively, the utility said. Georgia Power added in the integrated resource plan that it expects a typical Georgia Power residential customer using 1,000 kWh/month would see a $12 surcharge on his or her bill in 2018, the year the units are expected to begin commercial operation. Other Vogtle owners are Oglethorpe Power (30%), the Municipal Electric Authority of Georgia, or MEAG Power (22.7%), and Dalton Utilities (1.6%), owned by the city of Dalton, Georgia. The PSC is expected to make a decision in March 2009. ------------ International nuclear agency approves India inspection agreement Washington (Platts)--1Aug2008 The International Atomic Energy Agency's governing board on Friday approved an agreement on IAEA inspections of nuclear facilities in India. The vote was by consensus, according to a press statement from the Vienna-based agency. Several countries on the 35-member board had raised questions about the pact, leading some observers to say that the approval could be by vote, rather than consensus. The criticism had focused on provisions in the preamble that appear to make India's acceptance of the IAEA inspections contingent upon international assurances of nuclear fuel supplies. A key question was whether the language in the preamble had the same legal force as the body of the agreement. In his statement to the board before the decision, IAEA Director General Mohamed ElBaradei said, "The preamble provides for contextual background and safeguards are implemented in accordance with the terms of the agreement." He also said that "the agreement should be read as an integral whole." The IAEA board approval is one of several steps needed to put in place a policy, announced in a 2005 US-India joint statement, to ease US and international restrictions on nuclear trade with India. --Daniel Horner, daniel_horner@platts.com ------------ SAIC loses conflict-of-interest case, told to pay US gov't $2 mil Washington (Platts)--1Aug2008 A jury has returned close to a $2-million verdict in favor of the US government, which sued Science Application International Corp. for failing to disclose business relationships that had created a conflict of interest with work the company was doing for the Nuclear Regulatory Commission. The verdict is a blow to SAIC, which sought to portray itself as a victim blamed for NRC's failed effort to develop a rule allowing the clearance of slightly radiologically contaminated material from nuclear facilities. An attorney representing SAIC told the jury that the suit was an "attack" on the company's credibility and that SAIC never lied to, cheated or overcharged NRC for scientific and analytical work it performed for NRC. The Department of Justice, which represented NRC in the four-year legal battle in the US District Court for the District of Columbia, argued that NRC relied on SAIC to provide unbiased and independent advice on a controversial rulemaking that under close scrutiny by the public. The government said SAIC concealed contracts or business relationships it had with companies or organizations that had a direct interest in the rulemaking or stood to financially benefit if NRC adopted standards for the recycling of contaminated solid materials. The case centered on the terms of two contracts that SAIC signed with NRC in 1992 and 1999. Under the contracts, SAIC had to disclose all relationships or contracts that would create a conflict of interest. Federal prosecutors said SAIC repeatedly certified to NRC that it was in compliance with the terms of the contract. But those statements were false, and so its claims for payment, based on those false statements, were fraudulent, they said. The jury found that SAIC submitted 60 false claims for payment and used 17 false statements to get its claims paid, amounting to about $1.97 million in damages to the government, which DOJ expects to be tripled under statute. SAIC also faces possible penalties of between $5,000 and $10,000 for each of the false claims and statements, a DOJ spokesman said. --Jenny Weil, jenny_weil@platts.com ------------