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Massive cost overruns and long construction delays plunge Toshiba-Westinghouse into "nuclear nightmare"

"Burning money" graphic designed by Gene Case of Avening Angels was featured on The Nation Magazine's cover in 2003, accompanying Christian Parenti's feature article on the nuclear power relapse in the U.S.As reported by Bloomberg, Toshiba-Westinghouse has been plunged into a financial "nuclear nightmare" -- with losses, over just the past few trading days, amounting to $4 to 5 billion (yes, with a B!) -- losses amounting to more than 40% of its stock value. This is due to cost overruns, mounting into the billions of dollars, and years-long schedule delays, at four new reactor construction sites in the U.S.

The debacle stems from Toshiba-Westinghouse's acquisition of the Chicago Bride & Iron (CBI) new reactor construction firm, in a vain attempt to get control of already astronomical, but still skyrocketing costs, at the Vogtle 3 & 4 reactors construction site in Georgia, as well as the Summer 2 & 3 reactors construction site in South Carolina.

Toshiba-Westinghouse's AP-1000 (so-called Advanced Passive, 1,100 Megawatt-electric) reactor design was touted as the flagship of the so-called "Nuclear Renaissance," not only in the U.S., but internationally.

However, Arnie Gundersen of Fairewinds Associates, Inc., working for a coalition of environmental groups, many years ago identified a potentially fatal flaw in the design's containment. This could result in catastrophic amounts of hazardous radioactivity being pumped into the environment, in the event of an AP-1000 reactor core meltdown.

Besides Toshiba-Westinghouse's financial free fall, the public also faces mounting monetary risks.

In Georgia, the nuclear utilities have got state residents -- and the American public -- coming and going: Southern Nuclear, Georgia Power, et al. are charging ratepayers Construction Work in Progress (CWIP), or advance cost recovery, "nuclear tax" surcharges on their electricity bills, to fund construction of Vogtle 3 & 4.

But in addition to that, the Obama administration awarded Vogtle 3 & 4 an $8.3 billion (yes, with a B!) federal nuclear loan guarantee. And even the loan itself came from the taxpayer-funded U.S. Finance Bank.

If the Vogtle 3 & 4 project goes belly up, Georgia ratepayers could have invtested billions of dollars, without ever seeing a single kilowatt-hour of electricity generated at Vogtle 3 & 4; U.S. taxpayers could be left holding the bag for the entire nuclear loan guarantee, as the Obama administration did not see fit to require any (a 0% credit subsidy fee) nuclear utility skin in the game whatsoever!

Vogtle 3 & 4's $8.3 billion nuclear loan guarantee puts at risk more than 15 times the amount of taxpayer money lost at the Solyndra solar loan guarantee default. And Vogtle 3 & 4's risk of default was judged to be higher than was Solyndra's, when both projects were just getting going.

Although Summer 2 & 3 did not seek federal nuclear loan guarantees to finance construction, CWIP charges alone in South Carolina have been severely onerous. Around 20% of ratepayers' electric bills are going towards construction of the two AP-1000s, with no end in sight for the out of control increases in the two reactors' price tags.