ECONOMICS OF THE COLUMBIA GENERATING STATION (CGS)
(WPPSS NUCLEAR PLANT 2)

High-priced and dangerous: nuclear power is not an option for the climate-friendly energy mix Between 1951 and 2017, none of the 674 nuclear reactors built was done so with private capital under competitive conditions. Large state subsidies were used in the cases where private capital flowed into financing the nuclear industry. Investing in a new nuclear plant leads to average losses of around five billion euros. German Institute for Economic Research (DIW Berlin), July 24, 2019

Should we subsidize nuclear power to fight climate change? That's what some are advocating, but the arguments in favor of doing so, including a recent report by the Union of Concerned Scientists, are flawed. By M. V. Ramana, University of British Columbia, in Scientific American, December 3, 2018

Updating Bonneville's Strategic Plan The Bonneville Power Administration recently presented a new strategic plan. This paper offers some advice on how to make it better, including: Submit the Columbia Generating Station (CGS) nuclear power plant to a market test and, if it fails, close the CGS as rapidly as possible thereafter. By Robert McCullough, November 21, 2017

Spent Nuclear Fuel Costs at the Columbia Generating Station Soar after 2019 The public could save up to $1.18 billion in radioactive waste management and disposal expenses if the CGS closes by 2019, according to a new study. Physicians for Social Responsibility, October 25, 2017
Full report: Spent Nuclear Fuel Management and Closure Date Cost Comparison at CGS By Robert Alvarez, Institute for Policy Studies, October 24, 2017

Columbia Generating Station Market Test The plant's electrical production in 2015 cost the region about $234 million more than the equivalent Mid-Columbia hub electricity. Projections of CGS costs compared to the wholesale market indicate that, through 2028, regional ratepayers could pay $1.64 billion more than the going rate for Mid-Columbia power. Bonneville Power Administration, which buys the output of CGS, should conduct its own market test to assess the economic competitiveness of CGS. By Phil Lusk, September 2017

NW Ratepayers Will Save Over $250 Million if Nuclear Power Plant Replaced with Renewables A new study by utility economist Robert McCullough indicates that Northwest ratepayers would save an estimated $261.2 million to $530.7 million over the next ten years if the Bonneville Power Administration and public power consortium Energy Northwest agree to close the Columbia Generating Station (CGS) nuclear power plant – the Northwest’s only commercial nuclear power facility – and replace it with renewable energy electricity sources. February 15, 2017

Economic Analysis of the Columbia Generating Station (Full text) By McCullough Research, December 2013 (PDF) Also available in book form: Amazon.com Video presentation by author Robert McCullough, May 15, 2014 More economic analyses from McCullough Research: CGS operating costs remain well above the value of its production November 16, 2015 During the FY 2013/2014 and FY 2014/2015 refueling cycle, the Columbia Generating Station cost Pacific Northwest customers $206 million over alternative supplies from natural gas, wind, and hydro. Overall, the cost of purchasing power from CGS raises rates by over 4%, although much of the cost impact is financed by BPA into future years. Columbia Generating Station electricity: Cost vs. Value May 14, 2015 Operating costs of the nuclear power station exceed the price of other electricity produced in the mid-Columbia region, over the past three years (including 2015 budgetary projections), by a more than 50%, according to Energy Northwest's public financial reports. Updated review of the Paducah fuels transaction, April 7, 2015 In the updated review, analysis shows even greater costs than previously understood. Revised Analysis of the Paducah fuels transaction, February 11, 2014 The primary source of value in their new valuation methodology is an assumed present value of the TVA payment stream at a rate lower than 3%. We have reverse engineered the discount rate at 2.76% from their materials and have heard 2.85% from the press. This is an exceedingly low discount rate and not one currently in use at Energy Northwest, BPA or TVA. In fact, this rate is lower than the inflation rate assumption in use at Energy Northwest – resulting in a negative real discount rate. This would normally be viewed as an error in calculation rather than a serious estimate. Energy Northwest Losses in the 2013 Forward Purchase of Nuclear Fuel, January 25, 2014  McCullough Research examines the 2012 transaction where Energy Northwest purchased a long term supply of nuclear fuel from the USEC's antiquated facilities at Paducah, Kentucky. The environmental consequences of the transaction were severe, but our review indicates that the economic consequences were also very negative. Review of the November 2013 Energy Northwest Study, January 2, 2014 McCullough Research has prepared a critique claiming serious errors in Energy Northwest's most recent economic study on the cost-effectiveness of the Columbia Generating Station nuclear power plant.

Subsidizing Nuclear Power: From Cradle to Grave Total subsidies paid and offered to nuclear plants between 1960 and 2024 generally exceed the value of the power they produce. By Peter Bradford, September 6, 2016

Our future is in green energy, not aging, costly nuclear plants By Robert McCullough, Seattle Times, June 30, 2016

CGS Market Update Bonneville Power Administration can shut down the nuclear plant if it does not meet an annual four-year "rate test," which is an examination to see if the plant's output is worth more than its operating cost over the next four years.
In December 2013, McCullough Research predicted that the plant would not be able to meet the rate test. This has turned out to be the case. Over the past four years, the CGS cost over $541 million more than its output could be sold for.
McCullough projects that, over the coming four years, CGS will cost the region even more in excess pricing - over $703 million. Additional savings from shutting the plant right now would raise that number to over $833 million. With that money, each CGS employee could be paid a severance of $500,000, with money (lots of it) still left over for investment in wind and solar energy. By Robert McCullough, June 21, 2016

Seven Surprising Realities Behind the Great Transition to Renewable Energy The global transition to clean, renewable energy and away from nuclear and fossils is well under way, with remarkable developments happening every day. The Great Transition by Lester Brown, Janet Larsen, Matt Roney, and Emily Adams lays out a tremendous range of these developments. May 13, 2015

Kentucky-Fried Politics Compounding the nuclear plant's already questionable economic viability, Energy Northwest’s inexplicable decision to borrow $711 million to purchase the entire output of the Paducah uranium enrichment plant for one year was known by staff to cost $150 million beyond current uranium costs when the deal was signed – but this fact was concealed from the board.  Since then the uranium market has gone 30-40% lower, making the deal an even greater money loser. By David Cay Johnston, Newsweek, January 23, 2014

Ratepayers Could Save $1.7 Billion if Aging Nuclear Plant at Hanford is Closed Physicians for Social Responsibility, December 11, 2013

Costly to the Core: How the nuclear power plant no one knows about is wasting your money. By Nigel Jacquiss, Willamette Week, December 11, 2013

Columbia Station's operating and maintenance costs exceed the costs for 31 dams combined Spokane Spokesman-Review, May 4, 2011

Why Nuclear Power Fails Jeremy Rifkin, President of the Foundation on Economic Trends, speaks at the Wermuth Asset Management 5th Annual Investors Event regarding nuclear power and its fate in the future of renewable energy, offering several reasons to avoid nuclear investments, including:
* Nuclear power can't be scaled up enough to have an impact on climate change.
* No solution has been found for the disposal of nuclear waste.
* Even with existing plants, there will be a uranium deficit in the not-distant future.
* Water to cool the power plants is in short supply - over 40% of all fresh water used in France is used to cool nuclear plants.
* The centralized power-plant paradigm is outdated. The future is bringing distributed generation.
Video (4 minutes), published October 8, 2013

Nuclear Economics Articles from the Nuclear Information and Resource Center