PicoZ

More billion-dollar blunders

Only three months ago, the immense construction site at Indiana’s Marble Hill nuclear power station alongside the Ohio River bustled with 8,000 workers. Now the cranes and earth movers at the plant stand idle, and a shroud of snow covers the project’s jagged skeleton. Last week Public Service Co. of Indiana, Marble Hill’s principal builder, announced that it would abandon the half-finished plant altogether. Marble Hill has already eaten up some $2.5 billion, making it the most expensive nuclear power project ever to be dropped. The decision brings the total number of cancellations of U.S. nuclear plants since 1974 to 100.

Public Service began constructing Marble Hill in 1978. The original cost estimate for the plant, situated near the small town of Madison, was about $1.4 billion. But Marble Hill ran into the same sort of quality-control problems that have bedeviled the rest of the nuclear power industry, and costs shot upward. Construction crews, for instance, routinely failed to repair properly the air pockets that formed in the concrete as it was being poured. Last month a task force estimated the total price of completing the project would be $7.7 billion or more.

Marble Hill’s voracious appetite for cash has left the utility strapped. Just to continue generating power to its 540,000 customers, Public Service said it will immediately need to boost rates 14%. Later the utility plans to apply for additional rate increases to begin paying off its $2.2 billion share of the construction bill. Stockholders in the company are already sharing the financial burden. The utility has cut dividends by 65%, and the price of its stock has fallen from 27 a year ago to 91/4 last week.

The scuttling of Marble Hill was the latest in a long series of setbacks facing the nuclear power industry. Just three days earlier, the Nuclear Regulatory Commission refused to grant an operating license to the nearly completed $3.4 billion Byron nuclear power station near Rockford, Ill. Regulators said they had “no confidence” in the quality-control procedures for some of the plant’s construction. The NRC’s move was unprecedented in the commission’s history and was more surprising because Byron’s operator, Chicago’s Commonwealth Edison, is regarded as the most experienced atomic power generator in the U.S. Though Commonwealth is appealing the decision, the NRC’S denial undoubtedly helped accelerate the loss of faith in nuclear power among investors and consumers.

The Byron and Marble Hill decisions seemed to spark a chain reaction of anxiety about the costs of nuclear power. Cincinnati’s city council called on Cincinnati Gas & Electric to abandon plans to complete the Zimmer nuclear plant, which has been plagued by mismanagement and safety lapses. Zimmer, budgeted at $240 million when it was proposed in 1969, has already cost some $1.4 billion and is not expected to be completed until 1986, eleven years behind schedule. Taking this into account, CG&E and the other two power companies building Zimmer announced at week’s end that they will convert the plant to a coal-burning facility.

In Michigan, Attorney General Frank Kelley publicly urged the state’s largest utility, Consumers Power, to follow Indiana’s example and abandon construction of the Midland atomic power plant. Proposed in 1967 at an expected cost of $260 million, Midland will probably reach $6 billion, says Kelley. Midland came under additional criticism last week from federal inspectors, who announced that the floors in one of Midland’s buildings were filled with cracks. Those fissures seemed symbolic of the whole nuclear power industry.

ncG1vNJzZmismaKyb6%2FOpmaaqpOdtrexjm9tcnFnbn1wutSco56ZomKzqr%2FSrqmeq18%3D