Paying for new nuclear generating plants

Dan Yurman at Idaho Samizdat: Nuke Notes yesterday posted an extremely important story. Yurman discussed a story that first appeared in the Chattanoga Times Free Press, concerning the remarkable report on TVA's nuclear program by TVA President Tom Kilgore and TVA Chairman Bill Sansom. The Times stated that Sansom had recounted that

In the past fiscal year, the restart of TVA’s oldest nuclear reactor at the Browns Ferry Nuclear Plant helped the utility save an estimated $800 million . . . The $1.8 billion restart of Browns Ferry Unit 1, originally forecast to pay for itself within eight years, should now end up paying for itself in 2 1/2 years because of the unexpected jump in the costs for other power generation.

“Nuclear power is still very cost-effective,” Mr. Sansom said . . .

Kilgore told the TVA purchases 12% of the power it buys from outside producers. TVA plans to build 3 GWs of new gas fired generators, but power from a second Watts Bar nuclear unit which TVA is in the process of completing would be cheaper.

In addition to the Watts Bar Unit, TVA is has applied for a license to build two new reactors at its Bellefonte, Alabama site, and is considering finishing two more incomplete reactors located on the Belleforte site. Granted the rate of payback on the TVA Browns Ferry Unit 1, a Four reactor Bellfonte project could repay investment costs in a less than 10 years, with no rate increase for TVA customers. There are many considerations that would effect the actuall cost of a two or four reactor project, but there is now reason to believe that building new nuclear capacity will not greatly effect the price TVA customers pay for electricity.