Analysis of Estimated Cost for Three Pacific Northwest Nuclear Power Plants

Three net-billed nuclear powerplants are now under construction in the State of Washington by the Washington Public Power Supply System (WPPSS). A comparison was made of the estimated annual power generation costs for the WPPSS plants to the estimated costs of a typical nuclear powerplant as defined in an Ebasco corporation study. Particular attention was given to assessing the assumptions used by WPPSS in calculating these power costs.

The WPPSS estimated annual power generation cost is about 29 mills per kilowatt hour at its three net-billed projects. This is a reasonable reflection of annual power costs based on current WPPSS estimates of total project capital costs including financial costs, anticipated fuel cost, and expected operating and maintenance costs. WPPSS low annual power generation cost estimate is primarily influenced by WPPSS status as an agent for publicly owned utilities and Bonneville Power Administration's (BPA) agreement to purchase almost the entire capability of the three projects. The large disparity between WPPSS power generation cost estimate and the estimate Ebasco developed for typical nuclear projects occurs primarily because the Ebasco study does not use publicly owned utility assumption in calculating power cost. Another factor contributing to the WPPSS and Ebasco power cost disparity is the dissimilarity in project construction periods used to calculate fixed charges. WPPSS fuel contracts will also provide much of the initial core and early reload fuel at prices substantially below market prices that Ebasco assumed. The large disparity in capital construction cost estimates appears to be borne out in actual experience. While a comparison of project construction costs obviously reflects unfavorably on WPPSS, the comparison of WPPSS and Ebasco annual power generation costs is not as clear.