RALEIGH -- After years of talking up the nuclear renaissance, Progress Energy concedes it may never build new nuclear reactors in North Carolina.
The Raleigh electric utility told state regulators this week that it is considering nuclear payment alternatives that include joint financing and co-ownership with other power companies. Progress is reassessing its nuclear options as consumer energy demand remains slack in the wake of the recession while construction costs remain high.
In one possible scenario, Progress could own a stake in a nuclear plant built by another regional utility. Such an option would not require building the reactors that Progress proposed two years ago at its Shearon Harris nuclear complex in Southwestern Wake County.
As part of its annual review of its energy needs, Progress is scaling back its nuclear ambitions for the Carolinas to one-fourth of its previous estimate in terms of power generation.
Progress had previously projected a need for more than 2,100 megawatts of nuclear power - requiring a new pair of reactors at Shearon Harris by 2020. Now the company expects to use just 550 megawatts of nuclear energy by 2021 - half the power output of a single reactor.
Progress spokesman Mike Hughes said it's too early to tell whether new reactors will be built at the Shearon Harris site or elsewhere.
But he said the company projects an 18 percent increase in energy demand over 15 years and remains committed to boosting its reliance on nuclear power.
"It is no means an about-face on our nuclear strategy," Hughes said. "Based on what we know right now, this is our best estimate on what nuclear will be added and when."
Progress files 15-year energy forecasts and strategies every year with the N.C. Utilities Commission. Two years ago Progress suggested a co-ownership option in which the company owned 80 percent of two nuclear reactors. This time, the co-ownership stake is down to 25 percent.
Nuclear opponents hope it's just a matter of time until the power industry reduces its nuclear options to zero.
"They have clearly ditched their original plan," said Jim Warren, director of the Durham-based N.C. Waste Awareness and Reduction Network. "The nuclear revival is flagging badly."
In the 1970s and 1980s, during the nation's first wave of nuclear plant building, about 60 projects were cancelled or abandoned amid delays and cost-overruns.
Caution in industry
Nuclear industry officials said they can't afford to repeat that fiasco, and current expansion plans have proceeded much more cautiously. Earlier this year, for example, Progress signaled it would delay building two reactors in Florida. Meanwhile, two power companies that had proposed building a total of three reactors have cancelled their plans.
The U.S. Nuclear Regulatory Commission is still reviewing 16 applications for a total of 25 reactors, including four reactors by Progress and two by Charlotte-based Duke Energy.
Duke is also reviewing financing alternatives but has not scaled back its nuclear projections in the regulatory filing it made this month.
The estimated price for a single reactor has risen to as much as $10 billion.
"You're essentially pledging your entire company to raise capital to build two nuclear units," said James McLawhorn, director of the electric division at the Public Staff, the state's consumer advocacy agency in utility rate cases. "All the utilities are interested in some type of regional ownership to spread the cost and risk of building these units."
Nuclear advantages
Progress has already forsworn ever building another coal-burning power plant, and it is taking advantage of low natural gas prices to build several gas-powered plants in the state.
But for long-term energy needs that don't produce greenhouse gases or other pollutants, nuclear remains the only viable option, many energy experts believe. That could mean that regional utilities could invest jointly in a new reactor to be built at Shearon Harris, or that Progress ends up buying electricity from a reactor built by another company.
"This could take various paths," said utility analyst Paul Franzen at the Edward Jones firm. "It's just a recognition that in the future, nuclear ownership could take a variety of forms."
