Completion of the second reactor at the Tennessee Valley Authority’s Watts Bar nuclear plant will take three more years and an additional $1.5 billion to $2 billion, TVA executives said Thursday.The news follows the completion of a seven-month construction review that updates the original cost estimate for completing the 1,180 megawatt Westinghouse reactor mothballed in 1988. Plans approved in 2007 envisioned the unit’s completion this year at a cost of $2.49 billion.“Our estimates on time and cost were wrong,” TVA CEO Tom Kilgore said in a release. “While our intentions were well founded, our execution and progress reviews were not.” In October, TVA renegotiated its agreement with Bechtel, which had been awarded a $1 billion contract at the site. The government-owned utility took over more management responsibilities for the project, and the changes resulted in about 800 layoffs.Thursday’s announcement also spelled delays for TVA’s Bellefonte reactor completion project. TVA’s board approved construction at that site only after the first fuel load arrives at Watts Bar 2. In a separate action, it also voted to finance the $4.9 billion Bellefonte project through a leaseback arrangement contingent upon selling Watts Bar 2.The board will be asked to approve the new Watts Bar 2 costs at its next meeting April 26.
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TVA is not "selling Watts Bar" in the traditional sense. We are looking at what is called "alternate financing," which has already taken place on a number of large electric utility assets (coal plants, nuclear plants, pollution control equipment, etc.). Similiar to leasing a car, a large institutional investor would value the asset (in this case anuclear plant) and put up the money. In return they would be provided with an fixed income steam (a lease payment) over a fixed period of time. Eventually the asset would be returned to TVA, the NRC license holder and operator of Watts Bar. In this scenario no one physically purchases the asset and then takes over operation.
I wonder if this is the straw that breaks the camel's back? If I were a member of the TVA Board, on April 26 I would advocate firing Kilgore and Skaggs (an action required by their being in the jobs, not by what they have done), halt further Watts Bar Unit 2 and any other nuclear expansion spending, and request a proposal for power from Independent Power Producers using natural gas as fuel, to be supplied by December 2015.
This could be done easily, and the overall wholesale electricity cost would be less than the cost of electricity from a completed Watts Bar Unit 2. And this would get TVA away from the crazy nuclear building that has caused the agency so much trouble over the last 40 years, and let the agency concentrate on its core business, such as maintaining its five operating nuclear plants in a manner to keep them from getting red findings from the NRC.