How has the nuclear industry gone from "too cheap to meter" in the 1950's to "the largest managerial disaster in the history of business" by the 1980's? It costs more money than originally expected to make sure that the highly toxic radioactive waste produced during nuclear fission is not significantly released into the environment.
1950’s: Nuclear power sold as “too cheap to meter.”
1973: Ameren proposes to build a nuclear reactor, known as Callaway 1. Ameren secures private investments to pay for the construction, estimated to cost $1 billion.
1975: Missouri Public Service Commission (PSC) allows Ameren to charge ratepayers for the cost of building a second nuclear reactor, known as Callaway 2, instead of securing private capital to pay for the investment, like the utility did for Callaway 1.
1976: Concerned citizens, led by Kay Drey and the Missouri Coalition for the Environment, spearheaded a ballot initiative campaign to reverse the PSC decision to allow Ameren to charge its captive customers before a service is provided. The ballot initiative, Proposition 1, was passed by 66% of Missouri voters.
1982: Ameren cancels its plan to build Callaway 2 because it cannot charge ratepayers in advance and did not want to risk shareholders money for the investment.
1984: Ameren completes construction of the Callaway 1 nuclear reactor. The final cost is $3 billion, $2 billion over budget.
1985: Forbes calls the nuclear industry the worst managerial disaster in the history of business. Construction delays, cost overruns and project cancellations are a significant contributor.
2008: Ameren files an application with the Nuclear Regulatory Commission to build Callaway 2.
Expensive – The New Nuclear Gamble
New nuclear reactors that are being built by Toshiba Westinghouse are under construction in Georgia and South Carolina. Monopoly utilities in these states, similar to Ameren, are collecting money from captive ratepayers in order to shield shareholders from an investment that is too risky for Wall Street. Meanwhile, a proposed two nuclear reactor project in Florida is likely to be cancelled while the monopoly electric utility, Progress Florida, will get to legally collect over $1 billion from its captive customers. Almost $150 million of the money collected from customers is profit, which has prompted a pro-business Republican state senator, Mike Fasano, to change his mind about pre-charging ratepayers for nuclear reactors.
Using history as an indication of the future, it is no surprise these projects are behind schedule and over budget. It’s also no surprise that the skyrocketing costs of nuclear reactors have caused projects to be cancelled.
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