Environment & Energy
Related: About this forumFla Nuclear Plant shutdown price tag: $1.18 billion and take 60 years
By Pat Faherty
Tuesday, December 10, 2013 at 10:16 pm
Duke Energy has submitted its decommissioning plan for the Crystal River nuclear plant to the U.S. Nuclear Regulatory Commission.
The selected option is expected to be completed in 2074, capping more than a century of activity on the site.
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The estimated decommissioning cost is $1.18 billion in current dollars. The company believes its existing nuclear decommissioning trust fund, plus the funds future growth coupled with funds from the plants nine other owners will be sufficient to cover the decommissioning cost.
Duke is responsible for about 98 percent of costs. Analysis of estimated decommissioning cash flows indicates, at this time, no additional charges will be required from Florida customers to supplement the trust fund. However, annual analysis will be required...
http://www.chronicleonline.com/content/plant-shutdown-price-tag-118-billion
djean111
(14,255 posts)Anyone who thinks Duke will stop collecting from its customers for this is foolish and naive.
They will just call the charges something else.
We need local co-ops or government intervention - privatizing this stuff just sacrifices safety and affordability for profit.
FBaggins
(26,754 posts)You call for government intervention, but don't understand that utilities in FL are already regulated re: what they can charge. They can't collect for this and "call it something else"... because the state controls what they can charge for (and how much).
The plant already has a shutdown fund that projects out to cover these costs. They're required to have it and to report annually on the status of the fund and whether it's still adequate.
HooptieWagon
(17,064 posts)Whatever they want, the legislature passes. And the PSC is comprised of industry insiders who rubber-stamp rate increases.
FBaggins
(26,754 posts)That's the difference.
And again... there's a fund in existence with explicit reporting requirements. The company can't hide if they have to add money to the fund... and the commission doesn't hide the rate changes and their justification.
HooptieWagon
(17,064 posts)and the hundreds of millions already spent for the new nuke plant that Duke decided to cancel. The $1.8B is just a drop in the bucket...Duke will figure out a way to dump that cost on us, too...with the complicity of the Fl legislature and PSC. Do you really think that money set aside for the plant shutdown will actually be used for that? Right. Its probably already earmarked for CEO bonuses.
FBaggins
(26,754 posts)that isn't hidden.
The $1.8B is just a drop in the bucket...Duke will figure out a way to dump that cost on us, too
Repeating a claim doesn't make it any closer to being true. Once again... the plant has funds already set aside (they can't by law use it for anything else) and has to report on the status of those funds and that they're adequate to cover the retirement costs. All nuclear plants are required to do this.
Do you really think that money set aside for the plant shutdown will actually be used for that?
They don't have a choice. the Florida legislature can't change that.
kristopher
(29,798 posts)They are depending on continuing contributions AND on an assumed - repeat assumed - rate of growth in those funds. A real factor in owners seeking 60, 70 or 100 year shutdown timeframes is to allow time for fund growth - a strategy that depends on accurate prediction of what the actual remediation costs will be half a century from now.
Your defense of these Corporations is to repeatedly screech 'but there are rules' as if that eliminates the risk of someone breaking the rules, finding a way around the rules, or future rule changes that transfer the liability directly to the public.
Experience in the real world tells us that such acts are the normal expected motives and method of operation of every corporation; these are no different.
FBaggins
(26,754 posts)They don't have the option of just guessing at future returns - nor do they get to just imagine the costs involved.
$780 Million in today's dollars easily covers $1.18 Billion (also in today's dollars) sixty years from now. The fund returns don't need to exceed the inflation rate by even a single percent(per year of course).
The only cost I can think of that wouldn't be covered already would be long-term fuel storage (since that was supposed to be covered by the fees they've been paying for Yucca).
kristopher
(29,798 posts)If it were presently sufficient it wouldn't depend on either fund growth or continued contributions.
FBaggins
(26,754 posts)... no pension fund in the world is adequately funded.
Of course... that standard is nonsense.
kristopher
(29,798 posts)FBaggins
(26,754 posts)...but my certain knowledge from experience in the financial services industry spanning all or part of four decades (specifically including pension adequacy calculations).
If you tried to use your standard, you would be laughed out of the room.
If anything (assuming the reported figures are accurate) ratepayers may end up with a refund at the end of the process - since decommissioning funds don't belong to the utility.
kristopher
(29,798 posts)Many of us remember that the pension funds looted in the 70s and 80s belonged to union membership and how the promise of pension reform with 401K just didn't seem to work out.
I understand perfectly well the way the plan is supposed to work, I also understand how the nuclear industry, just like every other industry (including and especially the financial industry) works to circumvent and change the rules meant to civilize their behavior.
You trust and dedicate your efforts here on behalf of those corporations, most of us don't.
While this particular plant at this particular moment in time is able to check all the boxes by promising to continue to pay into the fund (they are short if they just rely on growth of the existing fund) there are definite reasons to be incredulous about the overall integrity of the system.
Press Release
By: Ed Markey
Date: May 7, 2012
Location: Washington, DC
Today, Congressman Edward J. Markey (D-Mass.), senior member of the Energy and Commerce Committee, released a new report by the Government Accountability Office (GAO) that found that the Nuclear Regulatory Commission (NRC) may not be accurately estimating the costs of decommissioning nuclear power plants nor adequately ensuring that owners are financially planning for the eventual permanent shutdown of America's nuclear power plants. The request was motivated by several other reports suggesting such inadequacies. For example, a 2009 review of licensee decommissioning funding status reports found that licensees for 27 out of 104 operating nuclear reactors had a combined shortfall of more than $2.4 billion in their decommissioning funds.
Because decommissioning a nuclear reactor costs hundreds of millions of dollars, the NRC is responsible for ensuring that licensees provide assurance that they will have adequate funds at the relevant time to decommission their reactors. The new GAO report, "Nuclear Regulation: NRC's Oversight of Nuclear Power Reactors' Decommissioning Funds Could Be Further Strengthened" was requested by Rep. Markey in March 2010 to ensure that nuclear power plant licensees provide reasonable assurance of adequate decommissioning funds and to identify any improvements or weaknesses in NRC's oversight in this area. Rep. Markey long has been concerned about the strength of NRC's oversight of decommissioning funding over the past two decades, prompting his request for previous oversight reports from GAO in 2001 and 2003.
"Decommissioning funds are the 401k's for America's nuclear power plants, and this new GAO report indicates the nation's plants are headed for a retirement meltdown," said Rep. Markey. "The NRC appears to be inaccurately estimating the costs of decommissioning the nation's nuclear power plants and inadequately ensuring that owners are financially planning for the eventual shutdown of these plants. It will be the public who'll pay the price if nuclear power plant owners come up short on the bill to safely close these plants."
The GAO examined the overall strength of NRC's oversight of decommissioning funding. Key findings of the report include:
· The NRC decommissioning funding formula may be outdated since it was last updated in 1988 and is based on two studies published in 1978 and 1980 that used technology cost and other information available at that time.
· NRC's evaluation of licensees' funding arrangements was not rigorous enough to ensure that decommissioning funds would be adequate,
· The NRC had not established criteria for taking action if it determines that a licensee is not accumulating adequate decommissioning funds and
· The NRC relies on licensees' reports of decommissioning fund balances without verifying these balances
The GAO report makes a series of recommendations to the Commission that includes defining what the agency means by the bulk of the funds that licensees will likely need to decommission their reactors; documenting procedures describing the steps that NRC staff should take in their reviews analyzing licensee documentation and verifying that the amounts licensees report to NRC in their decommissioning funding status reports match the balances on their year-end bank statements; continuing reviews of fund balances in a way that is most efficient and effective for the NRC; and considering review of a sample of licensees' investments to determine if licensees are complying with decommissioning investment standards and determine whether action should be taken to enforce these standards.
In light of the recommendations made in the new GAO report, Rep. Markey today sent a letter to the NRC asking for the Commission's responses to questions that include:
· What is the experience that leads the NRC to conclude the existing regulatory system is adequate?
· What are the NRC's plans to improve the ability to estimate decommissioning costs? What new inputs will be included in a revised decommissioning funding formula, and how will the revised formula be verified?
· How is the public to be assured that nuclear power plant decommissioning can be performed in a manner to protect human health and safety and the environment?
· How does the NRC specifically plan to implement each of these recommendations in the GAO report, and what is the timeline for implementation of each?
· Is the NRC considering discontinuing licensee site reviews to verify the accuracy of licensee fund balances in their decommissioning funding status reports as the GAO report indicates?
· What training programs or partnerships is the Commission considering to address lack the financial expertise of agency staff to evaluate compliance with investment restrictions?
· Will the Commission reconsider its October 2010 vote against the NRC staff's proposed change that would have directed nuclear power plant licensees to adjust decommissioning funds every year and within three months of the annual recalculation of the regulatory minimum needed?
"Adequate decommissioning funds are absolutely essential to reduce radioactive contamination after nuclear reactor permanently shuts down," wrote Rep. Markey in the letter to the NRC. "Every one of the 104 currently active nuclear reactors across the United States will need to be decommissioned eventually. Having enough money to perform the shutdowns is critical for protecting public and environmental health and safety."
Source: http://markey.house.gov/press-release/gao-report-finds-inadequacy-inaccuracy-nrc-oversight-funds-decommission-nuclear-power
HooptieWagon
(17,064 posts)The nuke plant was built by Florida Power in the early 70s, on the site of a coal plant. The nuke plant had a long history of breakdowns and other problems. Several years ago, after Florida Power was bought by Progress Energy, a DIY replacement of the steam generators was attempted. This involved cutting a large hole in the reinfored concrete building. There were a couple of firms who had done this work successfully before, but Progress Energy decided to do it themselves, despite warnings from engineers, to save a few million dollars. They didn't properly support support the building before cutting it, and the building badly cracked when the reinforcing bars inside the concrete were cut. Several years and a a couple billion dollars were spent trying (and failing) to fix the building, and Progress Energy merged with Duke Energy. Duke decided to permanently shut down the nuclear plant. Insurance is only paying a small amount of the failed repair. The Florida Public Service Commission (whom are industry lapdogs) ruled that customers had to pay the remaining $2 B spent on the failed repair. The only watchdog in Tallahassee was State Rep Mike Fasano (R) from Pasco County, who Rick Scott appointed as County Elections Official to get him out of the Legislature. The whole thing stinks....its been swept under the rug and no-one held accountable. Our power bills, which were once the lowest in Florida, have soared and now are the highest. Soon to go even higher when we start getting billed for the failed DIY repair job. Only the Tampa Bay Times (formerly St Petersburg Times) has been reporting it.
djean111
(14,255 posts)TECO is my electricity provider, and I am quite familiar with the Duke greed.
One of the things that makes me think I may not spend my old age in Gulfport, as I had once dreamed.
The whole regulatory system in Florida is corrupt, IMO, and the industry writes any legislation that is proposed/passed.
HooptieWagon
(17,064 posts)I have family and friends south of the Bay, they pay about 30% less than I for power.
Yeah, St Pete is a great city, but utilities are high. In addition to high power bills, water/garbage are also ridiculous.
And you are spot on about corruption in Tallahassee inre utilities.
darkangel218
(13,985 posts)Too bad the decommissioning will last 60 years.