US Southeast states pave way for new nuclear power

By Eileen O'Grady

CHARLESTON, June 23 (Reuters) - Lawmakers and regulators in the Southeastern United States who have given the green light for the first wave of new nuclear reactor construction in three decades expressed confidence on Tuesday that the new plants will offer the cheapest, most reliable power in the future.

Utilities in Georgia, South Carolina and Florida have proposed building a dozen new reactors costing more than $60 billion. Legislators and regulators are encouraging those plans by allowing companies to collect certain financing costs before nuclear licenses are issued and construction can begin.

South Carolina state Rep. Bill Sandifer said that by letting utilities raise electric rates before the plants are built, his state's Baseload Review Act will reduce the "sticker shock" that would occur if the three proposed nuclear plants come to fruition.

"This will be a dramatic difference in how that rate affects customers," Sandifer told attendees at a meeting of the Southeastern Association of Regulatory Utility Commissioners.

SCANA Corp (SCG.N), Southern Co (SO.N), Progress Energy (PGN.N) and Duke Energy (DUK.N) are looking at nuclear as a way to diversify the generation fuel mix and to reduce the region's reliance on coal-fired plants which emit more carbon dioxide than other fossil-fueled plants.

The utilities face an uphill battle to cut CO2 emissions due to heavy reliance on coal and a lack of renewable power options like wind and solar.

Stan Wise, a commissioner on the Georgia Public Service Commission, said Georgia's early recovery process also includes an extra layer of surveillance to make sure utility expenditures on new reactors are justified.

Ann Diass, chief accounting officer of Southern's Georgia Power unit, said early recovery of financing costs will lower the expected rate increase from the addition of two new reactors at its Vogtle station by the end of the decade to 9 percent from 12 percent.

Steve Byrne, chief nuclear officer for SCANA's South Carolina utility, said he gets many questions about the risk of cost overruns and delays that plagued the nation's early nuclear power era in the 1970s and '80s following the accident at the Three Mile Island nuclear plant.

South Carolina Electric & Gas Co, along with a state-owned power utility, are moving ahead to build two new reactors at SCANA's Summer power station.

Having the ability to recover some early financing costs, negotiating smarter engineering and construction contracts and advances in modular nuclear construction are a few lessons learned by the industry, Byrne said.

"All these things make us confident we can build these units for the amount we say and when," Byrne said.

"Constructing of two nuclear units is the most cost effective baseload generation out there," said SCANA Chief Executive William Timmerman. "It is the lowest cost option for our customers."

(Editing by David Gregorio)