Utility to Take Writeoff Tied to N-Plant Built by La Jolla Firm
Public Service Co. of Colorado said it will write off up to $100 million during the third quarter to cover costs linked to a problem-plagued nuclear power plant designed by La Jolla-based GA Technologies.
GA Technologies has previously described the PSC plant--the only commercial nuclear power plant that the La Jolla company has built--as proof that its gas-cooled nuclear reactor technology works.
The Denver utility also initiated an “extensive study” to determine if the plant--called Fort St. Vrain and located in Platteville, outside Denver--should continue operations or be shut down.
It is uncertain what impact a plant shutdown would have on GA Technologies, although company officials on Wednesday acknowledged that it could dampen utilities’ support for future gas-cooled reactor research.
Because of malfunctions and regulatory concerns about safety, the plant has been sitting idle 75% of the time since being commissioned in 1979, according to PSC spokesman Mark Severt.
Additional write-downs would be likely if the utility decides to decommission the plant, according to Severt.
Various Options
PSC’s options include closing down the gas-cooled reactor, revamping it to burn natural gas, operating it on an experimental basis or operating it as a wholly owned subsidiary that would provide power to the utility, Severt said.
Until the study is completed, the plant will be operated as an independent power producer that will sell power to PSC at a pre-set rate.
According to terms of an agreement with state regulators that was signed on Wednesday, the plant will no longer be supported by utility customers and future costs would be borne by shareholders, Severt said. He added that customers will receive $73 million in refunds.
PSC, which provides natural gas and electricity to a million customers in Colorado and Wyoming, reported net income of $110 million and revenue of $1.7 billion during 1985. The utility reported $898 million in shareholder equity last year.
GA Technologies, which provides nuclear fuel and support services to the Fort St. Vrain plant, “remains a very interested observer, and we want to see the plant succeed,” said company spokeswoman Nikki Hobson.
GA Technologies, a leader in gas-cooled reactor research, has been using U.S. Department of Energy funding to conduct engineering work that it believes will lead to the development of a safe, cost-effective gas-cooled nuclear plant.
“Anything negative that happens to Fort St. Vrain could have a negative impact on (research) nationally, Hobson acknowledged. “But it won’t have any serious practical impact because (research) will still be funded at the same levels as if Fort St. Vrain hadn’t been written down.”
GA Technologies is in the process of being sold by Chevron Corp. to Denver residents Linden and Neal Blue for a reported $50 million. The Blues cited GA Technologies’ nuclear expertise as a major reason for their interest in GA. That deal is expected to close soon, according to Hobson.
On Wednesday, PSC also announced that it had entered into a settlement agreement that resolved several long-running legal battles that have dogged the Fort St. Vrain plant. The suits settled on Wednesday were initiated by the Colorado Public Utilities Commission, the Colorado Office of Consumer Counsel and the Concerned Citizens Congress of Northeast Denver.
