New Nuclear Power Seen as Big Winner in Obama's Power Plan

The Three Mile Island nuclear power plant is seen across the Susquehanna River in Middletown, Pennsylvania on Mar 15, 2011.
The Three Mile Island nuclear power plant is seen across the Susquehanna River in Middletown, Pennsylvania on Mar 15, 2011.PHOTO: REUTERS

(Bloomberg) - The Obama administration is giving the struggling U.S. nuclear industry a glimmer of hope with changes to its carbon emission rules that mean new reactors will count more toward meeting federal benchmarks.

States will be able to take more credit for future carbon- free electricity to be generated by nuclear power plants still under construction when meeting their emission reduction targets, the U.S. Environmental Protection Agency said in a call on Sunday.

The targets, with new benchmarks to be issued on Monday, are required under the EPA's landmark Clean Power Plan.

Under last year's draft of the rules, the yet-to-be completed reactors were counted as already operating units that would not be fully credited for carbon reductions in the future when they were actually running. The nuclear power industry complained that amounted to a penalty on the plants and made state targets harder to achieve.

"We had indicated that any nuclear facility that was under construction would be considered as part of the standard-setting process," U.S. EPA Administrator Gina McCarthy said in a call with reporters Sunday.

"We received comment on that and we felt that the comment raised significant issues so that the new nuclear that's under construction is going to not be included in the standard setting, but will be included as a compliance strategy."

Projects to Gain Beneficiaries of the rule changes would include Southern Co. and Scana Corp., which are building new reactors in Georgia and South Carolina, respectively.

The projects, the first in decades, have been plagued by delays and cost overruns. The Tennessee Valley Authority, which is building a reactor at its Watts Bar facility near Spring City, Tennessee, would also get a boost.

Mr Tim Leljedal, a spokesman for Southern, declined to comment pending the release of the final rules, he said in an e-mail Monday.

"If nuclear plants already under construction can be counted toward a state's carbon reduction goals, then those states may not have to do something else to reduce carbon," said Mr Paul Patterson, a New York-based utility analyst for Glenrock Associates LLC.

The rule changes address one of TVA's "major concerns", Mr Scott Brooks, a spokesman for Tennessee Valley Authority, said in a statement on Monday.

''That means we can count Watts Bar Unit 2, scheduled to be online within the next year, as part of our compliance plan.'' Southern said in January that delays may add more than $700 million in costs to the twin reactors it is building at Plant Vogtle near Augusta, Georgia. The company has said customers will not have to pay for those setbacks.

''Nuclear facilities will be credited because it's new, zero-carbon generation that will be credited as part of a compliance strategy," Mr McCarthy said. "We think that's entirely consistent and appropriate."