Staff Writer
President Barack Obama discussed the need for renewable energy sources during his primetime address to the nation Tuesday, yet one source he didn’t mention was recently at the forefront of discussion among JEA officials and its board: nuclear energy.
In moves to secure the immediate future, the JEA board approved both the utility’s fiscal 2010-11 budget and a rate increase, but the long-term future of how the utility can meet supply needs led to a discussion of nuclear opportunities.
CEO Jim Dickenson told the board that a signed deal with the Municipal Electric Authority of Georgia “basically gets us” to the 10 percent goal of JEA energy coming from nuclear sources by 2017.
The JEA’s goal is to find sources for more capacity without a reliance on fossil fuels. The utility wants to generate ways to serve more customers and also replace the current electrical generation capacity with regard to continuing emission reduction regulations.
While JEA has historically owned and operated its own generating capacity, other options exist.
They include a transition to a 50-50 mix of owned generation and purchasing energy from an outside source or sunsetting all the generating assets it owns and buy its power elsewhere.
As for nuclear power being part of the solution, JEA would fit into the discussion “very well” according to William Hollaway, a Washington, D.C.-based lawyer and energy consultant.
Capital costs for raw materials to build plants will always be high, said Hollaway, but the costs are comparable to those of renewable sources that would lower the dependence on fossil fuels.
While fossil fuels remain part of the energy supply, he added, the reason the U.S. hasn’t adopted nuclear power is because of the abundance of coal. Now, he said, public perception is more favorable toward nuclear power and the Obama administration has “talked the talk and walked the walk” when it came to making nuclear part of the energy dialogue.
“The future (of nuclear expansion) is in the Southeast,” said Hollaway.
And the opportunity is there, especially for a company like JEA, he said. The utility’s high credit rating is a “big deal” when it comes to potential financing and operating partnerships, as is the utility’s deal with Municipal Electric Authority of Georgia, making the JEA a “known quantity.”
JEA CFO Paul McElroy told the board the utility had the luxury of waiting a few years to see how other such deals across the region progressed, along with keeping an eye on federal mandates on emission restrictions, but the utility was exploring its options.
Utility officials have been in discussion with other investors on potential projects. McElroy said the ideal situation would include up to four owners with JEA owning up to 20 percent of a facility.
Financing opportunities through means such as U.S. Department of Energy loan guaranty programs and Build America Bonds are available, but there are risks, including interest rates and project cancellations after financing.
The application process for such an endeavor costs around $350 million, said McElroy, with around $10 billion for construction.
“That’s big and real money,” he said.
Still, McElroy said, it’s a wait-and-see approach in regard to projects, with the meeting among JEA officials, Hollaway and board members an informational update on such opportunities.
One board member prefaced the meeting with his belief on how such meetings will help meet future energy needs.
“I think this board’s legacy will be the blueprint that it leaves behind for future energy needs,” said Ron Townsend, JEA board chair. “This is a step toward that.”
Nuclear in the Southeast
The current proposed nuclear facilities in and around Florida include:
Florida
• Turkey Point (2022-23) – Florida Power & Light
• Levy County (2021-22) – Progress Energy - FL
Georgia
• Vogtle (2016-17) – GA Power Co., MEAG, Oglethorpe Power Co., City of Dalton
South Carolina
• Virgil C. Summer (2016-19) – SC Electric & Gas Co. and Santee Cooper
• William States Lee III (2021-22) – William States Lee III
Alabama
• Bellefonte (2018-20) – Tennessee Valley Authority
Source: JEA
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