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UPDATED: 10:19 p.m. April 08, 2008
Deal reached for Georgia Power nuclear reactors


The Atlanta Journal-Constitution
Published on: 04/08/08

Georgia Power said Tuesday it has reached an engineering and construction deal with Westinghouse Electric Co. for two 1,100-megawatt nuclear reactors at the utility's Vogtle plant south of Augusta.

If approved, the plants promise customers higher power bills when they come online in 2016. The deal marks the first agreement between a power company and a nuclear-reactor vendor in the United States since the 1970s, said Oscar Harper, Georgia Power's vice president of resource planning.

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Westinghouse's reactor, the AP1000 design, is new and has not been used before. Utility officials tout its simpler design and enhanced safety features.

Nuclear power is making a comeback in the United States as the nation tries to lessen its dependence on natural gas and foreign oil as well as cut back on carbon emissions and other pollutants. Based on the state's expected growth, Georgia Power says it needs to add more than 7,000 megawatts of capacity and that nuclear energy is essential to achieving that goal.

While several utilities have hinted at building nuclear reactors, few have actually committed to doing so.

Part of the issue is cost for utilities and consumers. The first generation of nuclear plants throughout the country was expensive to build. Construction cost overruns, combined with the Three Mile Island disaster in 1979, stunted the industry's growth in the United States.

Georgia Power seeks to hold Westinghouse to a firm price on the reactors but is not yet sharing estimates.

Estimates have been given in other states. For example, Raleigh-based Progress Energy and Charlotte-based Duke Energy Corp. have estimated that two of the new Westinghouse reactors would cost between $4 billion and $6 billion combined.

Georgia Power said it would give the contract -- including the price of the reactors -- to the state Public Service Commission by May 1. The company said it would then release details of the agreement, including the project cost, to the public.

The company has been unable to hold Westinghouse to a firm price until this week, officials have said.

What Georgia Power, as well as other utilities, will try to sell to consumers is that nuclear plants are actually cheaper in the long run. There are two main messages: The fuel is not as prone to wild price swings like natural gas. Secondly, it also does not produce carbon emissions and will not be subject to a future carbon tax, which will plague coal-fired and natural gas plants.

"A nuclear plant is more expensive up front, but it's cheaper to run," Harper said. "And if you're going to do anything about carbon and greenhouse gases, nuclear has to be a part of that solution."

Utilities also have the public-relations challenge of convincing people that nuclear reactors are safe. For its part, Georgia Power is using Westinghouse's AP1000 nuclear reactors, which have three ways, instead of two, to pump water into the reactor to shut it down if a malfunction should occur, Harper said.

The model is also much simpler than previous ones because it has fewer moving parts, he said. Such designs are supposed to be safer, more efficient and easier to maintain.

Vogtle is already home to two reactors that began operating in the late 1980s. Besides Vogtle, Georgia Power operates the Hatch nuclear plant in southeastern Georgia near Baxley. Georgia Power is owned by Atlanta-based Southern Co., which has the Farley nuclear plant in Alabama, too.

Federal regulators have toughened oversight of Farley in recent months because of breaker failures and other mechanical issues. The problems did not pose immediate danger to the public, but regulators considered them to be serious violations. A senior engineer at Farley filed a U.S. Labor Department complaint against the company in November saying the company had suspended him for five weeks for identifying safety concerns at the plant.

The additional units at Vogtle would require state and federal approval before they could be built.

Harper said Georgia Power has been negotiating with Westinghouse so it can meet two deadlines to receive federal production tax credits, the incentives from the government to spur nuclear-power production.

Tuesday's agreement with Westinghouse is the first of a three-step process, he said.

The second step involves an independent evaluator at the PSC to evaluate Georgia Power's project against bids from independent power producers, who may submit bids for plants powered by nuclear reactors, coal or natural gas to meet Georgia's future demand.

The winning bid will go to the PSC in August, Harper said. The agency then will hold public hearings through March 2009 before final approval, he said.

PSC member Stan Wise said while Georgia Power's contract has to be weighed against others, he is optimistic about the state's chances to produce more electricity from nuclear power.

"If you believe carbon emissions from fossil fuels contribute to global climate change, and you recognize the long-term limitations of natural gas, you have to embrace nuclear power as a means of meeting our energy needs and accommodating economic development," Wise said in a statement.

Georgia Power is acting on behalf of Vogtle's other co-owners: Oglethorpe Power, Municipal Electric Authority of Georgia and Dalton Utilities.

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