Stop new Florida reactors now, say leading experts

Economist Dr. Mark Cooper filed testimony along with Mr. Arnie Gundersen on behalf of the Southern Alliance for Clean Energy, an organization that has intervened in the case.

"The expert testimony presented by our witnesses raises serious questions about FPL and Progress Energy's plan to build four new nuclear reactors with Florida power customers carrying all the financial risk and utilities making all the profits," said Dr. Stephen Smith, executive director of Southern Alliance for Clean Energy. "The PSC and the legislature cannot give the big power companies a blank check to build these risky facilities and not protect bill-payers from the changing market conditions and the growing uncertainty with nuclear construction. Failure to fully review and consider this information will cost the state billions of dollars and set off a wave of explosive rate increases. Someone must protect consumers."

In the prudency-review testimony submitted to the PSC, economist Dr. Mark Cooper, a senior fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law School, stated that it would be imprudent to allow the companies to incur any more expenses or recover those expenses from Florida ratepayers at this time. His testimony highlighted that exercising this judgment before Florida ratepayers money is spent is infinitely preferable to arguing about it after the money has been spent.

Dr. Cooper mentioned that both companies assert that, having reviewed recent changes in the factors that affect the decision to build these reactors, it is prudent to continue but their review of the changes now faced by these plants is cursory and insufficient to justify that conclusion.

Cooper has testified over 100 times before public utility commissions in 44 jurisdictions in the U.S. and Canada on energy and telecommunications issues and about twice as many times before federal agencies and Congress on a variety of issues, including energy and electricity. He is the author of the "The Economics of Nuclear Reactors," a report released on June 18, which found that it would cost $1.9 trillion to $4.1 trillion more over the life of 100 new nuclear reactors than it would to generate the same electricity from a combination of more energy efficiency and renewables, which Southern Alliance for Clean Energy supports as a better, less risky alternative that the Florida utilities should pursue.

Cooper's testimony states, "The decision by the utilities to build nuclear reactors was based on several important assumptions that have been called into question in the past year and a half."

Some of these assumptions included that the utilities assumed a high rate of demand growth; they downplayed the contribution that efficiency and renewables can make to meet the need for electricity; and they used a low estimate of the cost of new nuclear reactors.

The testimony points to the potential for increased energy efficiency to significantly reduce the new need for new power generation. For example, "...the technology of efficiency has come into much sharper focus in the past year. Numerous studies of the potential for and cost of improvements in efficiency in the residential, commercial and industrial sectors have shown that large quantities of energy can be saved at relatively low cost. One study was done specifically for Florida, which found that aggressive policies to reduce energy consumption could lower demand by 20 percent at a cost of less than 3.5 cents per kilowatt hour (kWh).... This study shows that the findings for other states and the nation as a whole apply to Florida. For example, a major national study found that consumption could be reduced by 30 percent at a cost of 2.7 cents per kWh. Thus, independently of any regulatory mandate, as the technology of efficiency is proven out, the Commission should consider greater reliance on it as part of the least cost approach to meeting the need for electricity."

Commenting on his filing, Dr. Cooper said, "I have identified dramatically changed circumstances since the certificate of need determination and present new evidence on the marketplace, regulatory, financial and technological risks of the reactors that lead me to conclude they are no longer feasible and that incurring additional costs on these plants would not be prudent."

Mr. Gundersen's testimony stated that it is likely that the proposed projects will experience construction delays and cost overruns in the future that will negatively impact Floridians, if these reactors are ever built. He also argued that these delays were not properly accounted for by either utility. Mr. Gundersen highlighted that these extra costs and scheduling slippages will be due to licensing delays, worldwide material shortages, a worldwide shortage of skilled personnel, and the fact that these nuclear reactors are extraordinarily complex to build. He has a BS and ME cum laude in Nuclear Engineering from Rensselaer (RPI), and was formerly licensed as a nuclear reactor operator. He was a Senior Vice President of a nuclear licensee before becoming an independent engineering consultant and now works with Fairewinds Associates in Vermont.

"In my opinion, Florida's road ahead is strewn with obstacles and uncertainties for the proposed construction of four new Westinghouse AP1000 nuclear reactors," said Mr. Arnie Gundersen, a nuclear safety engineer and energy advisor with 38 years of nuclear experience. "I seriously question the long-term feasibility of Florida Power and Light and Progress Energy Florida completing these proposed new reactors."