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

As reported by Bloomberg, Toshiba-Westinghouse has been plunged into a financial "nuclear nightmare" -- with losses amounting to $4 to 5 billion (yes, with a B!) -- around one-thrid of its stock value -- 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 skyrocketing costs at the Vogtle 3 & 4 reactors construction site in Georgia, and 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, that 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; 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 nuclear utility skin in the game whatsoever!

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

Update on December 29, 2016 by Registered Commenter admin

Reuters has also reported on this story: "Battered Toshiba out of easy options to plug nuclear hole."

So too has the Wall Street Journal: "Toshiba Shares Plunge Further Over Problems at Nuclear-Power Subsidiary."

BBC reported last night that Toshiba stock has tanked more than 40% in just two days.
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