The Virginia Electric and Power Co. yesterday canceled plans to complete two nuclear generating units at its Surry nuclear power plant and said resulting losses could amount to $146 million, which the company intends to charge its customers over a 10-year period.
The canceled units, Surry 3 and 4, were to have been completed in 1986 and 1987 at a cost of $1.8 billion, the company said. However, reduced projections of consumer need for electricity a decade from now - plus "growing concern over the many uncertainties that face the nuclear industry" - caused the change in plans, the announcement said.
The company held out the possibility that the financial impact of the cancellation could be "substantially lessened" through negotiation. It indicted last week that the best the company could hope for was a reduction of about $70 million in the $146 million loss.
A Nuclear Regulatory Commission spokesman said that "uncertainties" and other problems have beset the nuclear industry to an increasing degree since June, 1974. Since that date, 29 nuclear power plant units have been delayed or deferred for periods ranging from a few months to indefinitely, the spokesman said.
The delays and deferrals include units 3 and 4 of a planned four-unit nuclear plant being built by Vepco at North Anna in Louisa County and two units planned by the Potomac Electric Power Co. at Douglas Point on the Potomac River in Charles County, Md.
The NRC spokesman said that since Oct. 1, 1976, 32 units have been delayed nationwide, including some that were being delayed for the second time.
Many reasons have been given for the delays, the spokesman said, but the dominating ones were "uncertainties" about the needs for electricity and financial problems.
Financial problems also are high on Vepco's list of difficulties with both Surry and North Anna. In 1972, when Surry 3 and 4 were planned, the electricity consumption growth rate was 10.8 per cent, Vepco said. Now it is 5.5 per cent. Nuclear plants 1 and 2 at Surry are in operation.
Construction delays caused by labor problems, intervention of environmentalists and tighter control instituted by the NRC made inflation a major factor in costs of the plants.
The Vepco announcement said the company had invested $53 million in Surry 3 and 4 and had contracts for another $93 million, but that "it should be possibel to reduce substantially the financial impact . . . through negotiations with suppliers of equipment and services, and the possible sale of equipment to other parties . . ."
Several months ago, Vepco made an effort to save the situation by offering Surry 3 and 4 to the electric cooperatives and municipalities that buy company, but the offer was rejected, executive vice president Stanley Ragone said.
Vepco also began negotiations with those customers to get them to pay a pro-rata share of all the company's costs, Ragone said, and the company's costs, Ragone said, and the talks still are going on. They buy about 8 per cent of Vepco's electrical output.
Vepco had indicated several days ago that it was preparing to cancel Surry 3 and 4 and at that time James C. Dunstan, director of the division of public utilities for the State Corporation Commission said a hearing before the SCC would be required.
Both he and Ragone said then that it was unclear whetehr ratepayers would have to shoulder the entire loss through higher charges for electricity or whether stockholders would share the expense. Yesterday's announcement indicted Vepco expects consumers to pay it all.
Vepco pointed out that its plan is "subject to regulatory approval."
Ragone said he did not think there would be a hearing on the matter, however, until the company had completed its efforts to reduce the size of the loss.
"The SCC won't want to hear that we think we're going to have to make up so much money. They're going to want to know exactly how much it is," he said.
The SCC also is awaiting a report from Vepco on possible management inefficiencies in application of the fuel adjustment clause of consumers' bills. The explanation is due March 28. The SCC said fuel adjustment had raised customer bills by 15 or 20 per cent since November, but the increases were caused by the type of generating plant used to generate electricity rather than changes in the cost of fuel.
Accusations of inefficient management have become an old story to Vepco. NRC officials have leveled the charge twice, most recently over construction problems at the North Anna plant.
Vepco paid a fine of $31,000 for 30 violations, the third highest such fine ever levied by nuclear regulators. The two highest fines also were charged against Vepco, which is the most-fined utility in the country, the NRC says.
In canceling the Surry units, Vepco joined utilities in 13 other states which have been forced to take like action.
NRC figures show that 63 nuclear plants are operating in the United States, 71 are under construction, construction permits for 66 are under review and 34 plants are planned.
The Energy Research and Development Administration continues to predict that there will be 600 plants operating by the year 2000, based on continued growth of the economy and energy use - and on what experts think nuclear power should contribute to the overall energy requirement at the turn of the century, a spokesperson said.