Virginia Electric & Power Co. President William W. Berry was incorrectly quoted in yesterday's editions in an article on the cancellation of the company's North Anna 3 nuclear power plant. Berry's correct statement on the future of nuclear power: "As for new units, there just aren't going to be any until the regulatory climate changes. It's the demise of nuclear construction but not the demise of nuclear operations."
Virginia Electric and Power Co. announced today it will abandon its long-planned North Anna 3 nuclear power plant because of what it called a "massive outpouring" of federal safety regulations that would increase the plant's price tag to $5.1 billion -- or more than double the company's estimates only two years ago.
To recover its losses on the plant, which has long been under construction about 70 miles southeast of Washington, Vepco will seek to bill its rate payers about $540 million. The write-off, the largest ever sought by Vepco, would add about 34 cents to the average residential customers' monthly bill for the next 10 years if approved by the Virginia State Corporation Commission. The average bill is currently $67.50 a month.
The company's announcement today was perhaps the crowning blow to an ambitious nuclear construction program that Vepco once boasted would make it one of the most nuclear-dependent electric companies in the nation. The company, which had hoped to have eight nuclear power plants on line by the mid-1980s, now has scrapped four of them -- a pattern that parallels the decline of nuclear power nationwide.
Vepco president William W. Berry noted today that North Anna is the 94th nuclear power plant to be canceled and the 16th this year alone. He said he expects that a "significant" number of the 74 now under construction around the country also will be abandoned.
"As far as new units goes, there just aren't going to be any," Berry told a press conference. "It's the demise of nuclear construction if not the demise of nuclear power."
He laid North Anna's problems almost entirely at the doorstep of the Nuclear Regulatory Commission, which he said has issued a "flood of new regulations" following the Three Mile Island accident in 1979.
Those regulations would have added nearly a billion dollars in costs to the plant, he said, requiring a separate control-room building to accommodate safety equipment, the redesign of other portions of the plant and the demolition of existing construction.
"Without making any judgments about the desirability of these regulations, it is clear that they have priced North Anna 3 out of the market," Berry said.
Consumer advocates and industry analysts sharply challenged Berry's assertions, attributing North Anna's problems to a history of errors and miscalculations by Vepco's management rather than federal safety requirements. And some industry analysts noted that spiraling construction and financial costs combined with a drop in the projected growth of electrical demand have been just as important in the decline of nuclear power.
"They're trying to scapegoat the federal government for must of the capacity miscalculations that are really a result of Vepco's bad projections," said Fritz Wiecking, executive director of Virginia Action, a Richmond-based coalition of consumer and public interest groups. "A whole lot of consumer groups have been saying all along that demand for electricity was not going to be growing anything like they said it was going to be. Now it turns out the predictions of the consumer groups have been fairly much on target and those of the utilities have been way off."
"The cost of the new regulations has been greatly overestimated by the utilities," said Alan Nogee, coordinator of the Utility Clearinghouse of the Environmental Action Foundation. "The plants have simply become too expensive and unnecessary."
Wiecking and other consumer advocates said Vepco's request to write off its $540 million in costs for North Anna 3 probably will be challenged before the state commission on the grounds that stockholders -- rather than rate payers -- should foot the bill for management errors. Several experts noted, however, that the regulatory agency approved similar write-offs when Vepco canceled its North Anna 4 plant two years ago and its Surry 3 and 4 plants in the 1970s.
"I don't think we have a ghost of a chance," said an angry Christie D. Vernon, chairman of the Virginia Consumers Congress.
Ballooning cost projections at the North Anna 3 plant--which was first conceived by Vepco officials during the heyday of nuclear power in the late 1960s and early 1970s--underscore the problems that have beset nuclear plants across the country. The plant -- one of four originally planned for the Louisa County site -- was originally supposed to be completed by 1977 at a cost of $301 million.
Despite mounting costs and its cancellation of other plants, Vepco officials say they stuck by their intention to complete North Anna 3 until several weeks ago when an analysis of a consultants' study by National Economic Research Associates showed that the original cost estimate had been off by more than 1,500 percent.
Berry said today that Vepco can now obtain all the electricity North Anna 3 was to provide more cheaply by purchasing it from surrounding utilities, such as Potomac Electric Power Co., Baltimore Gas and Light Co., and Duke Power Co.
Vepco will, however, be forced to spend another $20 million to cancel its existing contracts for the plant and "shut down the site," whose most notable landmark to date has been a huge cylindrical steel silo. About 176 construction workers will be laid off, Vepco officials said, but they hope 288 of the utility's employes at North Anna 3 will be "absorbed" elsewhere.