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Mark Schimmel, Monticello site vice president for Xcel, said it was the most people he’s seen on a nuclear work site since the era of reactor construction in the 1970s.
The workers replaced large pumps and motors, a large unit that dries steam within the reactor core and other major equipment. The work took place during a refueling shutdown, as did earlier phases of the upgrade in 2009 and 2011.
“There have been areas where they cut out pieces of wall because they have to move pump motors,” said Patricia Voss, an NRC inspector based at the plant who monitored the work to assure it met federal safety standards. She said in an interview that she wasn’t aware of the cost overruns, but that her job is monitoring for safety, not cost.
The project has been troubled for years by delays and regulatory concerns, including some that grew out of the 2011 Fukushima Daiichi nuclear plant disaster in Japan. Some engineering problems surfaced only after the work began, and had to be addressed on the fly.
O’Connor, the chief nuclear officer, testified that other reactor projects — Grand Gulf in Mississippi, Turkey Point and St. Lucie in Florida and Watts Barr in Tennessee — also experienced cost overruns, in one case double the original estimate.
“It seems like their excuse is, ‘We’re only 80 percent over, some people go twice as much as originally budgeted, so don’t worry,’ ” said Jordan Weaver, project scientist for the Natural Resources Defense Council’s nuclear program. “Generally, what that means is that those types of costs are passed on to consumers.”
Bills left for ratepayers
The state Commerce Department, which analyzes utility rate hike requests on behalf of consumers, contends that Xcel hasn’t offered enough justification for the cost overruns. Commerce officials declined to comment, citing the ongoing rate case.
Just how much customers will have to bear remains unclear.
That’s partly because not all of the cost overruns have been disclosed. Under a state law, Xcel has classified its latest cost-overrun estimate as a “trade secret.” The estimate has been disclosed to regulators, however, and the Star Tribune last week petitioned to have it made public, but the PUC has not yet acted.
Xcel spokeswoman Mary Sandok said in an e-mail that the utility needed to keep the amount confidential because it didn’t want project vendors to “know how much contingency was built into the budget,” thus giving them an edge in negotiations over final bills. The total cost will be disclosed later, she said.
Xcel customers already are paying higher interim electric rates this year, the fifth increase since 2005. Even if the cost overruns aren’t added to rates this year, they could come back in 2014. Xcel plans another rate hike request for next year to recover its continued investments in the electrical system.
Kleit, the Penn State economist, said ratepayers often take the hit for cost overruns in states such as Minnesota where utilities are subject to traditional rate regulation. He said investors would suffer the loss in states with deregulated power markets, a road Minnesota hasn’t taken.
“The ratepayers bear the risk despite the best efforts of the commission,” Kleit said. “The utility always has more resources, more money, more lawyers and more accountants. It is very hard for dedicated regulators to fight all of that.”
David Shaffer • 612-673-7090