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Keep Your Eye on the South

The Southeast again is the battleground for fuels, technology, and market structure.

Fortnightly Magazine - July 2007

between 2014 and 2020.

The NRC recently approved the ESP application for Entergy’s Grand Gulf site in Mississippi. This represents the first ESP approval for a nuclear facility by the NRC. The approval for Southern’s Vogtle site is expected in 2009. Southeast utilities are also members of different consortia formed to test the licensing process and construction feasibility. Entergy Nuclear, Southern Co., TVA, Duke, FPL, and Progress Energy are members of the NuStart consortium, which also includes other utilities, developers, and equipment manufacturers. TVA leads another consortium established to evaluate the viability of adding a GE Advanced Boiling Water Reactor at a TVA site. NuStart selected TVA’s Bellefonte and Entergy’s Grand Gulf sites for which the construction and operating license (COL) permit application process is expected to commence in 2007. GE’s ESBWR design was designated for Grand Gulf while Bellefonte will host the Westinghouse Advanced Passive (AP) 1000 design. COL applications for Entergy’s River Bend, Southern Co.’s Vogtle, and Progress Energy’s Harris nuclear facility sites are planned for submission around 2008.

Despite the robust development activity for nuclear capacity, a great deal of uncertainty surrounds these projects and their estimated on-line dates given the extensive application process with federal and state regulators, financing challenges, spent-fuel storage problems, security concerns, and NIMBY pressures. At the same time, the government continues to push for more funding and to ease the permitting process. As the nation continues to strive for indigenous fuel sources and a clean, low-emissions environment, nuclear power is emerging as an attractive option. It remains to be seen if nuclear power manages to overcome the obstacles and become the energy choice of the future in the Southeast and other regions.

Southeast utilities are leading the nuclear-generation comeback. They are attracted by prospects for reducing their reliance on volatile fuel sources and leveraging the current federal support and incentives for the nuclear industry. Southeast utilities are the most active among developers of new nuclear units in the nation, with plans to add more than 16,000 MW of new facilities.

After decades of dependence on natural gas and fuel oil as the primary sources of energy, Florida is taking steps to diversify its fuel mix. The Florida Public Service Commission (PSC) is promoting the use of renewable-fuel sources and is encouraging development of clean-coal technologies and nuclear energy. Although natural gas will dominate the future generation mix in the state, the steps taken to promote alternative fuel sources may help maintain supply reliability and price stability for customers.

TVA is responding to current market conditions by pursuing a private-like business model. Moving from a three-member, full-time board to a nine-member, part-time board with a chief executive officer, TVA is drafting a strategic plan that places more emphasis on customer relationships, operating efficiency, and financial performance. With several distributors threatening to leave the system for alternative suppliers, TVA has made providing reliable power at competitive rates its priority. TVA successfully has managed to convince all but two of the withdrawing members to reinstate.

Florida’s outlook towards its electricity market is changing as it takes stock