N.H. utility agrees to scale down plans for its nuclear plant
The plug is being pulled on another nuclear power plant. The principal partner in the Seabrook, N. H., facility has conditionally agreed to cancel one of two reactors under construction. An estimated $1 billion has been spent on Unit II, now 23 percent complete.
The move is not a surprise.
For more than a year, the Public Service Company of New Hamphire (PSNH) has been under pressure from its utility partners in Massachusetts, Vermont, Maine, and Connecticut to cancel the second unit.
Earlier this month, support further eroded when PSNH jacked its cost estimate from $5.2 billion to $9 billion for both 1,150-megawatt reactors.
Once completed, Unit I alone will hike New Hampshire electric rates at least 65 percent, the utility estimates. It is too soon to tell how a cancellation of Unit II would effect rates.
On Tuesday, PSNH agreed to cancel Unit II - but only if certain, unannounced conditions were met. The joint owners will meet tomorrow to discuss and perhaps vote on cancellation plans.
One of the impediments to scrapping Unit II has been a New Hampshire law that forbids billing consumers for uncompleted utility plants. The state Supreme Court is now considering a PSNH request to recover costs from consumers for $16. 5 million in a canceled Massachusetts plant. The decision, expected to set a precedent for recovering Unit II costs, may not be reached for six months. If PSNH were unable to recover the costs for Unit II from ratepayers, it could not continue to finance the project, say Wall Street analysts.
But PSNH isn't waiting for the court's decision. The cancellation move may have been prompted by a cash-flow problem. There is speculation that financial backers wanted Unit II's fate resolved before extending more credit.
Furthermore, there is utility support now, says a company spokeswoman, for a proposal whereby the 15 other utility partners would help finance PSNH's losses by giving the company their savings from cheaper Canadian hydro-electric power due by 1986.
''It's a bailout of PSNH,'' says Douglas Foy, executive director of the Conservation Law Foundation. ''They're spreading the loss that would otherwise may be picked up by PSNH bondholders and shareholders.
''It will be difficult to persuade the state utility commission to go along (with this plan),'' Mr. Foy says. ''In Connecticut, for example, the hydropower savings may have improved consumers' electric bills,'' says the utility critic.
On the other hand, he says, ''It is in the consumers' interest all over New England to do what is necessary to cancel Unit II.''
Meanwhile, utility support remains strong for the 73-percent complete Unit I. ''We are very definitely behind it,'' says Mike Sette, a spokesman for United Illuminating Company, the second largest Seabrook partner. Less than a week ago, UI estimated that the first unit would cost $5.5 billion.
PSNH estimates Unit I would cost a total of $4.4 billion, but with the cancellation of Unit II that figure will rise, says a company spokeswoman.
Those prices, says Foy, place the economic viability of Unit I in doubt. ''Using the $5.5 billion figure, UI has estimated rates could rise from 11 cents per kilowatt hour to 31 cents,'' he says.
''At hearings, we are seeing the beginning of people questioning Unit I,'' confirms King Quillen, spokeswoman for the Connecticut Department of Public Utility Control.
Since last summer, soaring costs of nuclear power-plant construction have resulted in canceling reactors in Washington, Indiana, and Ohio.