FPL says cost of new reactors at Turkey Point could top $24

Nucleonics Week

Pam Radtke
Russell, New Orleans

Building two new reactors at Turkey Point would cost as much as $24.3 billion, depending on the technology chosen,Florida Power & Light told the Florida Public Service Commission.

The company said the cost for building the two units ranges from $12.1 billion to $17.8 billion for Westinghouse's AP1000, and $16.5 billion to $24.3 billion for General Electric's ESBWR.

FPL spokesman Mayco Villafana said last week that the company reached its cost estimates by revising a 2004 study of overnight costs done by a consortium of companies, led by the Tennessee Valley Authority in coordination with DOE. That study found the cost of building two ABWRs would

be $1,611 per kilowatt. In updating those figures for 2007, FPL said, it found that costs for materials, equipment and labor had risen more than 50% by some indexes since 2004.

In its revisions, FPL determined that overnight costs for the power plant island and supporting construction
would range from $6.7 billion, or $2,444/kW, to $9.8 billion, or $3,582/kW.

FPL added owner's costs, including security, cooling towers, site work and land costs ranging from $1.27 billion, or $466/kW, to $1.96 billion, or $717/kW. Additionally, FPL estimated transmission costs and allowance for cost risk ranging from $541.7 million, or $198/kW, to $663.6 million, or $242/kW.

According to testimony submitted to the PSC, the total overnight cost for building two Westinghouse AP1000's would range from $3,108 per kWh to $4,540 per kWh.

FPL then added an 11% carrying charge for construction costs and factored in cost escalation over the scope of
the project to reach its final figures of $5,780/kW to $8,071/kW depending on the scope of the project and inflation.

Villafana said FPL wanted to provide the most comprehensive cost estimate possible to the PSC so commissioners have an understanding of what such a project will entail.

"We decided to move on this early and make sure that our commission and our regulators realize that if we are going to maintain the option for nuclear, we need to start the process today ... so they would be able to appreciate what its going to take for us to build these."

In October 2007, Moody's Investor Service released a report "New Nuclear Generation in the United States" that estimated total costs of a nuclear plant, including interest, would be between $5,000 and $6,000/kW.

A June 2007 study by the Keystone Center, titled "Nuclear Power Joint Fact-Finding," concluded that overnight estimates for a new reactor would be $2,950/kW, or between $3,600 and $4,000/kW with interest.


During PSC hearings late last month, FPL President Armando Olivera said the key to which technology the company chooses is cost. He said FPL is negotiating with GE and Westinghouse - vendors whose technology it is coonsidering using - to get the best commercial terms possible for itss customers.

"And at this time, we are in heavy discussions with both entities trying to figure out how much of that price, for example, can be a fixed price and how much of it is going to be a variable price," Olivera told the commission.

The company expects to make a decision on the technology later this year, before it moves ahead with the site certification process with the state's Department of Environmental Protection. FPL intends to file an application with NRC in 2009 for a combined construction permit and operating license.

PSC Commissioner Nathan Skop said during the hearings that by FPL's own admission in previous discussions with the PSC, the company is "in further depth of discussions with one particular vendor, and they're using that as the basis for a lot of the things that have come before us ... If I weree a betting man, I think I could make a judgment call on which technology they may go with." Skop didn't say which technology he believed FPL favors.

Need determination

The three-day technical hearing in Tallahassee, Florida was about FPL's request to certify the need for two new reactors at Turkey Point. FPL has requested the need determination in order to move forward with plans to have the new reactors online in 2018 and 2020.

In its request for the need certification, FPL said, "Failure to initiate development of the Project now, which would be the immediate consequence of the Commission not granting this petition, would irrevocably foreclose the possibility of adding new nuclear capacity by 2018 and in fact would preclude the addition of such capacity before 2021."

The PSC staff is expected to issue its recommendation on need for the new reactors by March 6, and the five-member commission is expected to vote on the request March 18.

During the hearing, Olivera said the only way to meet the company's projected need for an additional 8,200 MW in 2020, without increasing the company's dependence on natural gas, is through more new nuclear generation. Even with the addition of two new units at Turkey Point, and demand side management practices, the company will have a shortfall of between 3,120 MW and 3,960 MW to meet summer peaking loads in 2020, according to company testimony.

"Based on everything we know today, this is the only best option that we have that contributes meaningful reductions in greenhouse gas emissions," Olivera said. "It provides needed base load capacity. It improves fuel diversity, and it reduces Florida's dependence on natural gas and oil fuel."

With the new units, FPL's nuclear generation would increase from 16% to 27%, according to an opening statement by FPL's general counsel, Wade Litchfield, who represented the utility in the hearing. The two new units at Turkey Point could contribute 76% of the greenhouse gas emissions reductions that FPL would be called on to provide by 2021 under a plan proposed by Florida Governor Charlie Crist. Litchfield also said that the new units are the most cost effective option for new generation.

In addition to certifying the need for the new units, FPL also requested that the PSC approve the company spending $16 million this summer to reserve a forging spot at Japan Steel Works. Florida's Office of Public Counsel, the state's consumer advocate arm, argued that determination should be made at later cost recovery hearings.

Water concerns

A handful of opponents to the plan addressed the commission before testimony began. Most were concerned with the water use of the plant and nuclear waste.

Barry Parsons, who identified himself as a citizen from Madison County, said he was concerned about nuclear waste and plant safety.

"I find it incomprehensible that this commission and this state is actually seriously considering approving a new nuclear power plant."

Dawn Shirreffs of Florida's Clean Water Action told the commission that construction of the units doesn't qualify under Florida law because it is not the most cost effective alternative. "Florida Power has not addressed the most basic issues regarding cost, feasibility and water before coming to you today. Instead, they await your approval so that risky investments into due diligence can be done on the ratepayer's dime while Florida Power & Light earns interest," Shirreffs said.

Intervenors include the Orlando Utilities

Commission, a municipal utility that is seeking a minority ownership interest in the new FPL units, and Seminole Electric Cooperative, which said it was spurned by FPL when it approached the company about a stake
in the new units. One of the key issues raised in questioning was the water source for cooling the new units, which will need 80 million gallons of water a day. Villafana said recently that the company is focusing on several options, including treated wastewater, and has made a commitment not to use drinking water for cooling.

FPL won approval from the Miami Dade County Commission in December 2007 for zoning variances that would allow the company to build the new units at Turkey Point.