1World Nuclear Industry Status Report 2007, p. 19
Craig A. Severance, CPA is co-author of The
Economics of Nuclear and Coal Power (Praeger
1976), and former Assistant to the Chairman and to
Commerce Counsel, Iowa State Commerce
Commission. His practice is in Grand Junction, CO.
Business Risks and Costs of New Nuclear Power
Craig A. Severance
Several U.S. utilities are now advancing proposals for a new generation of nuclear power plants.
Though massive cost overruns and construction delays in the 1970's and 1980's caused U.S.
utilities to cancel over 130 nuclear plant orders 1, the nuclear industry is now hoping to ride a
wave of concern over global warming. Can new nuclear power help the U.S. electric power
industry cut greenhouse gas emissions, at a reasonable cost?
It has been an entire generation since nuclear power was seriously considered as an energy option in
the U.S. It seems to have been forgotten that the reason U.S. utilities stopped ordering nuclear power
plants was their conclusion that nuclear power’s business risks and costs proved excessive.
With global warming concerns now taking traditional coal plants off the table, U.S. utilities are
risk averse to rely solely on natural gas for new generation. Many U.S. utilities are diversifying
through a combination of aggressive load reduction incentives to customers, better grid
management, and a mixture of renewable energy sources supplying zero-fuel-cost kWh’s, backed by
the KW capacity of natural gas turbines where needed. Some U.S. utilities, primarily in the South,
often have less aggressive load reduction programs, and view their region as deficient in renewable
energy resources. These utilities are now exploring new nuclear power.
Estimates for new nuclear power place these facilities among the costliest private projects ever
undertaken. Utilities promoting new nuclear power assert it is their least costly option. However,
independent studies have concluded new nuclear