Cost of S.C. nuke plant has Duke in search for partner - Charlotte Business Journal:

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Duke officials say the company still may be willingv to build the plant by But they worry about the financial risk and the impacon customers’ rates if it goes it alone on the project. Otherf utilities face similar questions. won’rt say whether it has talkexd to Duke. But the Raleigh-basedc utility also would like to find another utilit y to share the high upfront costs of its plannednucleat plants. And in South already plans to build a nucleart plantwith state-owned utility Santere Cooper. President Jim Turnerr says the companyis “very activelhy seeking a partner.” Constructiojn costs are the issue.
The $11 billionj estimate for the twin-reactor Lee station doesn’tr include any financing Those could easilyadd $3 billion to $4 billion to the And the projected construction costs are base d on 2008 dollars. By the time the plant is builftin 2017, the price is likely to be highefr still. Also, Duke has said it will likely need additional legislation to help make Lee and othefr future nuclearplants feasible. Duke wantsw to recover at least some of its constructionm costs while the plant is being built without having to undergo a full state reviewa ofits rates. South Carolina already allows that. North Carolinwa does not.
Duke may seek additionakl legislation in both states that would allow utilities to set up regional organizationsw that could own andoperate plants. Ellen formerly the head of DukeEnergyt Carolinas, now heads the parentt corporation’s nuclear development division. She has been working with a small stafr to assess opportunities forregional “special-purpose entities.” Federal regulationa already allow such But in the Carolinas, regulatory laws may have to be changed to allowe the regional groups. Duke had hoped to addresws those legislative issues befores applying for permission from South Carolina this year to builrd theLee facility.
Chief Executive Jim Rogersx now says legislation may have to wait until 2010. He says nucleadr plants should be consideredregional assets. Spreading the initial costs, and the risk, amongt several utilities would make plant construction more Nuclear plants are large and can providre power formany customers, he notes. Finding at leasrt one partner for Lee isa priority, Rogerw says. “Our strong preference is to have a We just think it is abetter approach.” When askef whether Duke would proceed withouyt a partner, he says maybe. He says he woulsd “put that in a strong maybe category.” But he will not commit to it now.
A Missourui utility recently scuttled plans for anuclear plant. The utility’s failure to find a partneer was akey factor, says Normah Richardson, associate director of energty research at SNL Energy. Union Electric in Missouri, like was seeking a partner for a second unit at itsCallawahy plant. And it sought legislative authorithy to recover some construction costs before it finishesthe project. Both efforts failed, Richardson He says several planned plantsare partnerships. Most are expansionsd at existingnuclear facilities. Progress Energy’s $17 billion Levy plan in Florida is the only majo utility plant on a new Progress has no partners onthat project.
When Duke announced planz for the Lee plant in it was to be a jointf venturewith Atlanta’s But Southerjn opted out in 2007. Havinvg a partner would make the Lee projectgmore cost-effective. Nuclear plants are inexpensiveto operate, but very costlgy to build. The Turner says, is that “the industry has not been good at playinywith others” in the past. The high costs of buildiny nuclear plants give utilities reasonto cooperate, he Progress spokesman Mark Hughes agrees. He says Progress is “certainlyh interested in learning aboutpartnership opportunities.” He declines to say whethere Progress and Duke have talked.
But he says Progresse has the same incentiveas as Duke forseeking partners. Progress could look for project to join or find partners for its proposed expansion of the Shearonb Harris nuclear plantnear