Hip-hip- HOORAY! After a series of informative, provocative presentations and public comments this morning, the Austin City Council voted unanimously to DECLINE participation in the South Texas Nuclear Project’s expansion plan.
Austin has a 16% stake in the current South Texas Nuclear Project, and has been questioning for months whether it should be a financial participant in new plans to double the capacity of that plant. Months ago a consultant firm, Worley Parsons, was hired by Austin Energy to investigate whether this would be a good idea for Austin’s future.
First to present was Roger Duncan, general manager of Austin Energy. He gave a presentation on the consulting firm’s recommendations. We learned the following:
- The proposed expansion would generate an additional 436 MW for the City of Austin. Estimated cost: $2 billion.
- Under a worst case scenario (of cost overruns, delayed construction, etc), power generated from the new boilers would cost 13 cents/kwh. Under the best of circumstances (everything was beautiful and nothing hurt), electricity would cost 6 cents/kwh. The firm’s most realistic, expected scenario would price out at around 8 and a half cents/kwh — however, it should be noted that Worley Parsons is a pro-nuclear consulting firm, so these are likely the most conservative of estimates.
The consulting firm concluded that with only a 16% stake in the project, Austin Energy would have insufficient owner protection from the scheduling, cost, contractor and regulatory risks involved in the project. For example, if significant cost overruns did occur, Austin Energy would not have any vote or say in the matter of how to proceed. Furthermore, large capital costs would be associated with the project throughout 2016 — but none of that cost risk would be within Austin Energy’s control. The firm also warned of a potential downgrade of Austin Energy’s bonds because of the extended time period of debt issuance without cost recovery.
Because of the significant amount of unacceptable risk associated with the the expansion project, Worley Parsons recommended that Austin NOT participate. As an Austin Energy spokesman Mr. Duncan announced that the utility had reached the same conclusion with the additional reasoning that Austin has no need for the 432 MW of base-load power that the project would eventually supply. We wouldn’t even know what to with all that power. Austin Energy also expressed concerns (rightly so!) that the nuclear waste issue remains unresolved.
Mr. Duncan went on to shed light upon the public participation process that Austin Energy has overseen in the last few months. You may remember that we asked you to participate in their survey a while back. In a nutshell, the survey results were:
- Austinites want much less coal
- Austinites want much more solar and wind
- Austinites both want much more and much less nuclear power
….whaaa??? Yep, it looks like the public is still pretty evenly split on nuclear power. You either love it or you hate it. My thoughts are that this divisive split depends heavily on how much people actually know about nuclear power. The misinformation out there on nuclear is strong — enough people have said that nuclear power is cheap and safe for long enough that folks just assume its true. If only all of Austin read this blog (help us out on this one and spread the word to your friends)!
To wrap up, the Mayor put what he saw as as Duncan’s most important points in perspective:
- the financial risk involved with this project is GINORMOUS (I paraphrase)
- this risky $2 million investment would double Austin Energy’s debt while only providing an additional 432 MW of power (AE currently has about 2600 MW online)
Just in case the financial argument wasn’t strong enough, we had legions of citizen environmentalists on hand to put in their two cents.
First up to bat was our Very Own Matthew Johnson. In brief: the $50 billion of nuclear loan guarantees were removed from the stimulus package (woot, woot!). That makes this project even less attractive (as we’ve said, nuclear projects aren’t viable without loan guarantees because financiers won’t invest in them — too risky).
Round two: Paul Robbins, environmentalist and consumer advocate. Paul discussed the new nuclear technologies being installed in Finland. Finland, as you may know, decided to go nuclear largely out of concerns with carbon dioxide emissions. There they’ve had problems with (can you guess?) huge delays, huge cost overruns, and unfortunately are not even meeting their co2 reduction goals because they put all their emissions reductions in the nuclear basket. Whoops!
Paul also gave a brief history of the current reactors we have at the South Texas Project. That nuke (that we currently have a share of) had 460% budget overruns. Unit 1 was 9 years late, unit 2 was 7 years late coming online, and throughout the years neither has operated cost effectively for a very significant amount of time.
After that we heard our one dissenting voice: Dr Robert Duncan, a research scientist who wanted the city to buy into the plan because he was worried about global warming. I understand the sentiment, of course — I’m pretty concerned about the problem myself. Its too bad that nuclear projects take way too long to build to represent a real climate change solution, and that they aren’t really as CO2 neutral as proponents would have us believe (especially due to the mining, refining, and enrichment of uranium, as Matthew Kresha from the Renewable Energy Students Association went on to inform us just next). Duncan also held up 6 quarters to demonstrate “how insignificant” the nuclear waste issue remains. However small nuclear waste looks on a per capita basis, I wouldn’t want to wave around spent uranium pellets in front of the dais.
Roy Whaley, vice chair of the Austin Group of the Sierra Club, reminded us all of the tremendous water requirements of nuclear plants. Thanks Roy, that’s another important point that often gets lost in the overwhelmingly long list of reasons to oppose nuclear power.
In the end, I think that the council’s decision was made based upon a very simple business assessment of the size and current debt load of Austin Energy. Council member Randi Shade was sure to mention that this resounding no only applied to Austin’s financial participation in the project, and that the council was only declining to participate in this current ask.
Which I think means that Austin isn’t willing to be an owner in the expansion project, but won’t necessarily balk at contracting out power once the expansion is online.
An environmentalist’s work is never done.