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Dominion Energy : urged to scrap nuclear project Consumer group urges to abandon plans for third reactor at North Anna

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09/22/2017 | 09:27am CEST

RICHMOND - A Virginia consumer group on Wednesday called on Dominion Energy to abandon its stalled plans to build a new nuclear reactor at its North Anna Power Station, the latest in a long-running campaign to convince the utility to shelve the expensive project for good.

"This is a $19 billion or more white elephant that needs to be laid to rest officially and permanently," said Irene Leech, president of the Virginia Citizens Consumer Council, a nonprofit group that has fought the expansion at North Anna and wants the State Corporation Commission to excise it from Dominion's long-range forecast, which regulators will hold hearings on next week.

Dominion includes the new reactor in just one of eight proposed scenarios included in the forecast - known as an Integrated Resource Plan - it filed with the State Corporation Commission. But for opponents, that's one too many.

"Even as Dominion says 'We're going to pause,' we should not forget that ratepayers are bearing a burden," said Mark Cooper, a senior fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law School.

The General Assembly authorized the utility giant to recoup $301 million from its nearly 2.5 million Virginia ratepayers related to the expense of developing the project and securing an operating license. The federal Nuclear Regulatory Commission approved the license in May, but Dominion told a legislative commission on electric utility regulation in August that it had suspended development of the third reactor.

"The work we have done to obtain a combined operating license for North Anna Unit 3 is prudent and valuable for our customers to maintain a diverse, carbon-free, baseload source of electricity for the future," said Richard Zuercher, a Dominion spokesman.

Dominion operates two reactors at North Anna and an additional two at a sister station in Surry County. Those plants provide about 41 percent of all the electricity used by Dominion customers. The utility will have spent nearly $634 million by the end of 2017 on the development of the new unit at North Anna, Zuercher said.

"The company has made no decision yet on when it may seek to collect the outstanding monies spent to preserve this option for our customers," Zuercher said.

Dominion's decision to pause development of North Anna comes amid some major cost overruns at new nuclear plant projects in Georgia and South Carolina. Georgia Power's new reactors at Plant Vogtle were three years behind schedule and more than $3 billion over budget even before Westinghouse Electric, the designer of the reactors and lead contractor, went bankrupt in March. If it is finished, it could cost $25 billion, $9 billion more than budgeted.

And in South Carolina, the V.C. Summer project near Columbia, also lead by Westinghouse, was suspended in July after delays and about $9 billion in overruns.

"Nuclear construction costs escalate relentlessly," said Cooper, who predicted the demise of the Summer project.

Cooper said major advances in renewable technology - including the emerging promise of energy storage to counter the intermittent nature of wind and solar generation - and cheap natural gas have made nuclear a loser for new generation projects.

"It's so hard because the prime mover, the source of energy, is a catastrophically dangerous resource," he said. " In order to render it tolerable for civil society, you have to wrap it in immensely complicated technology."

Mark Webb, Dominion's senior vice president of corporate affairs and chief legal officer, told state lawmakers last month that the company had suspended development of North Anna as it awaits the fate of carbon regulation. President Donald Trump has directed his administration to roll back former President Barack Obama's Clean Power Plan, aimed at limiting carbon emissions from power plants, but Virginia is forging ahead with its own regulations for limiting emissions.

Carbon regulation could be a lifeline that makes nuclear plants better able to compete with other generation sources because, like wind and solar power, they have zero emissions.

"We really need to understand what form carbon regulation takes and where future energy prices may go to understand at what point North Anna 3 would become an economically viable project for our customers," Webb said.

That point will never arrive, Cooper said. "Today and for the foreseeable future, nuclear power is the most expensive way imaginable to reduce carbon emissions," he said in a conference call with reporters Wednesday, adding that investments in energy efficiency and renewable power could accomplish the same goals.

The difference, he said, is that utilities such as Dominion "make a lot more money if they build one of these things," referring to the guaranteed return on investment that Dominion receives for building new power plants.

Cooper said the SCC should order North Anna 3 removed from Dominion's long-range plan and refuse to allow any cost-recovery other than through the "normal ratemaking process, in which the utility demonstrates that it is the least cost option and used and useful to ratepayers." The Virginia Attorney General's Office of Consumer Counsel has also in the past urged Dominion to abandon the project.

Ken Schrad, a spokesman for the commission, said the Integrated Resource Plan is a planning document with "no commitment of dollars."

The Associated Press contributed this report.

© Copyright (c) 2017 The Roanoke Times, source Newspapers

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Financials ($)
Sales 2017 13 017 M
EBIT 2017 4 569 M
Net income 2017 2 314 M
Debt 2017 35 823 M
Yield 2017 3,91%
P/E ratio 2017 21,27
P/E ratio 2018 19,10
EV / Sales 2017 6,57x
EV / Sales 2018 6,05x
Capitalization 49 672 M
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Average target price 80,2 $
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Thomas F. Farrell Chairman, President & Chief Executive Officer
Scot C. Hathaway Senior VP-Operations, Engineering & Construction
Mark F. McGettrick Chief Financial Officer & Executive Vice President
P. Rodney Blevins Chief Information Officer & Senior Vice President
John W. Harris Independent Director
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