Foes claim nuke plant cost estimate lowballed


Vicki Vaughan
San Antonio Express-News Business Writer

As CPS Energy prepares for an electricity-rate-increase hearing tonight, activists are calling for the city-owned utility to disclose its estimate of the cost of adding two reactors to the South Texas Project nuclear plant.

NRG Energy, CPS' partner in the plant and the proposed addition, has estimated that adding two reactors would cost between $6 billion and $7 billion.

That estimate is obsolete, activists said Monday. The new reactors could cost CPS and NRG more than twice that, in the $12 billion to $18 billion range, activists said.

The higher estimate is based on research by Arjun Makhijani, who was hired by several activist groups to look at the cost of expanding the South Texas Project.

Makhijani, who has a doctorate in engineering with a specialty in nuclear fusion, said he based his estimates on recent data from Florida Power and Light Co. for two similar reactors, along with a study done by the Tennessee Valley Authority, a report from Moody's Investors Service and his own research.

Should CPS go forward as a partner in adding to the South Texas Project, "there will be a rate shock", Makhijani said. But how much of one isn't known because CPS hasn't released a cost estimate for the nuclear addition, he said.

CPS plans to ask its board on Mondayfor a rate increase for electricity and natural gas customers that would add about $6.75 a month to the average residential monthly bill of $135. The CPS board first must approve the rate increase, and the San Antonio City Council must give a final OK. If approved, the rate increase would be reflected in customers' May bills, CPS officials have said.

CPS is asking to raise rates to pay for major projects it has under way, including completion of a coal-fired plant at Calaveras Lake and a $206 million study of adding to the nuclear plant. CPS now owns a 40 percent share in the nuclear plant.

"It's important for CPS to put a good set of numbers before the people," Makhijani said. "Why are they allowing an obsolete set of numbers to guide the discussion?" Makhijani is president of the Institute for Energy and Environmental Research in Takoma Park, Md.

Mike Kotara, CPS executive vice president of energy development, met with Makhijani early Monday.

"It was a very cordial meeting and complimentary of our efforts on conservation, energy efficiency and renewables," Kotara said. "Where we differ is that he wishes we were doing more".

Kotara defended CPS' decision not to release its cost estimates, saying, "we're actively negotiating with a would-be constructor, Toshiba Corp., and we really don't want to give them a target on price".

"We have a range of costs that we believe are feasible. Within that range, we've concluded that it's economically viable to go through with the project."

For the second time since September, CPS is comparing the cost of a nuclear addition to other alternatives. "Without that, you have an incomplete analysis," Kotara said. "You have to look at all the options."

Activists said they would prefer that CPS spend the feasibility study's $206 million on boosting use of renewable energy and offering credits to people who make their houses more energy efficient. The activist groups include: the Sustainable Energy and Economic Development (SEED) Coalition, the Alamo Group of the Sierra Club, the Southwest Workers' Union and Public Citizen.


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