After a decade of promising its customers that nuclear power would give them lower electric rates, Virginia Electric and Power Co. yesterday announced it is considering converting two partially built nuclear plants to coal.
Vepco has already spent nearly half a billion dollars on the two plants, but may have to change them because of "growing uncertainties" about nuclear power, Vepco President Stanley Ragone said at a Richmond press conference.
No other utility company has ever switched a plant from nuclear to coal power at such an advanced stage of construction, nuclear industry sources said.
Although Ragone insisted Vepco has not abandoned its decade-long commitment ot nuclear energy, the announcement was seen as another major setback for the nuclear power industry, already reeling from the Three Mile Island accident.
The two nuclear plants Vepco is considering converting to coal are located at North Anna, 70 miles south of Washington. Both were designed by Babcock & Wilcox, the same company that designed the Three Mile Island plant near Harrisburg, Pa.
A federal study under way of the Three Mile Island accident last March could force Babcock & Wilcox to make major changes in the design of its plants.
That problem, the soaring cost of building nuclear plants and growing apprehension about the federal government's commitment to nuclear power are the main reasons Vepco plans to study switching to coal, Ragone said.
"It's pretty obvious the government right now is not content with the nuclear power option," Ragone sid, adding, "There is no doubt in my mind that with a proper national policy, nuclear is the way to go."
The study, expected to take six to 12 months, will look at North Anna units 3 and 4, a pair of 938,000 kilowatt power plants. They are part of a complex that includes two nuclear plants and was planned to have four.
Virtually all of the $485 million worth of work done so far on North Anna 3 and 4 will be usable if the plants are switched to coal, Ragone added.
Ragone said Vepco does not yet know what effect switching the plants to coal will have on electric bills of Virginia residents. "That's what the study will try to determine," he said.
Starting this month, Virginia consumers are paying an average of $5.50 a month more on their electric bills because of Vepco's problems with its nuclear power plants.
The first unit at North Anna is shut down for refueling, a three-month job that started Sept. 25.
North Anna, recently constructed, has never started up because of a Nuclear Regulatory Commission moratorium on licensing new nuclear plants. North Anna 1 and 2 were built by Westinghouse, not Babcock & Wilcox, but new nuclear plants have been held up by the Three Mile Island incident.
At Vepco's other nuclear power complex, in Surry, Va., 130 miles south of Washington, one plant is shut down for piping repairs and another is idle while a new steam generator is being installed. It is unclear when either will resume operation.
Without its nuclear plants to generate power, Vepco has been forced to make electricity by burning coal and oil -- both of which cost more than nuclear fuel -- and to buy electricity from other utilities, also at a higher cost than nuclear power.
The Virginia State Corporation Commission last month agreed to let Vepco raise electric bills by $37 million over the next three months to pay for the higher power-costs. Vepco has already warned that it may have to ask for another increase in bills starting in January if its nuclear plants are not in operation by then.
If Vepco backs off from completing the North Anna atomic plants, it will be the second time the utility company has abandoned a pair of nuclear projects.
The surry complex originally was to have four units, but the third and fourth plants were scrapped in 1977 after Vepco had invested $164.5 million in them. That cost was tacked on to consumer's electric bills and spread over a 10-year period, until 1987.
Vepco abandoned the Surry 3 and 4 units because declining demand for electric power made them unnecessary.
For the same reason, Vepco is studying selling part of the $1 billion project it is building in Bath County to store power for peak periods of use, Ragone disclosed yesterday.
Vepco has offered to sell part of the project to American Electric Power Co., and to Alleghany Power System, Ragone said.
Scheduled for completion in 1982, the Bath County project is called a pumped storage facility and has two large lakes, one several hundred feet above the other. Water flowing from the upper lake to the lower one will run turbines to provide electricity during periods of heavy use.
At night -- when Vepco produces more electricity than its customers consume -- the excess power will be used to pump water back into the upper lake, so it can come down again the next day.
The Bath County project -- like the defunct Surry units 3 and 4 -- was planned several years ago, when the demand for power by Vepco's customers was growing at a rate of 10 percent per year.
Year now is projecting a 4 percent growth rate in maximum power consumption. That figure may be reduced again when a new forecast of electrical demand is completed in December, Vepco sources said yesterday.
The sources said, however, that the North Anna plants will still be needed and there are no plans to abandon the project. Work on North Anna 3 and 4 started in 1971 and has been delayed several times. Completion is expected sometime in the early 1980s.
Switching North Anna 3 and 4 from nuclear power to coal requires replacing the "burner" that heats water to make steam to power a turbine generator. The turbine is the same, regardless of its source of fuel.
While coal burning plants are generally cheaper to build than nuclear plants, coal, besides being several times more expensive than the uranium fuel for a nuclear plant, requires expensive pollution control equipment.
Vepco says it costs 1.21 cents to produce a kilowatt-hour of electricity from its nuclear plants, compared to 2.27 cents from coal and 2.57 cents from oil. Both fuel and plant construction costs are included in those figures.
Last year Vepco produced about 35 percent of its power from nuclear plants, 26 percent from coal and 36 percent from oil. The remainder came from hydroelectric power or was purchased from other companies.