Boston Edison scraps plans to build nuclear plant


BOSTON -- Boston Edison Co. became Thursday the second utility this year to cancel a proposed nuclear power plant because of regulatory delays and skyrocketing construction costs.

Edison officials estimated the utility, which owns 59 percent of the yet-to-be-built Pilgrim II plant 40 miles south of Boston in Plymouth, Mass., would lose at least $291 million by making the decision.


'Increased costs resulting from delays, additional regulatory requirements and the continuing uncertainty surrounding still other possible requirements forces this decision,' said Thomas Galligan Jr., chairman and chief executive of Massachusetts' largest utility.

A final decision to abandon the plant, now estimated to cost $4 billion, will not be made until the plant's 13 other owners have an opportunity to comment, Galligan said. They were expected to back Boston Edison's decision.

The company said it would seek to recover its investment over a period of years by passing along costs to its customers. Utilities in New England said the decision would lead to higher prices throughout the region and a renewed search for alternative sources of energy.

The Northern Indiana Public Service Co. in August scrapped 14-year-old plans to build a nuclear plant along Lake Michigan's shore. The plant, projected to cost $187 million in 1967, was last estimated to cost $1.8 billion.


There are currently 80 nuclear plants under construction and 12 more with construction permits pending nationwide, said Henry Lee, director of Harvard University's Energy Policy Institute.

No utility has sought to build a nuclear plant since the Three Mile Island accident in Pennsylvania 2 years ago, and plans for 16 nuclear facilities were scrapped in 1980.

Experts say utility officials nationwide are concerned by the factors which led to Edison's decision -- high interest rates, inflation and regulatory delays that can cost up to $1 million a day.

'The problems Boston Edison faced are national factors,' said Don Winston, a spokesman for the Washington-based Atomic Industrial Forum, an industry co-ordinating group.

'With the cost of money and an inflation rate of 8 or 9 percent, each day's delay costs a utility a million dollars in interest,' Winston said.

'Boston Edison just couldn't afford to build the plant,' said Lee. 'If you are a company like Edison looking at the investment market the way it is, it's almost an impossible situation.'

Galligan said the federal government's regulatory procedures were partly responsible for the decision.

The original $402 million Boston Edison proposal called for the 1,150 megawatt plant, authorized in January 1971, to be working in 1978. The second unit was supposed to be adjacent to the Pilgrim I plant.


'The most recent cost estimate which reflects the high inflation rate and interest costs -- based upon a construction permit in the spring of 1982 and an in-service date of March 1990 -- is for a total project cost of almost $4 billion,' Galligan said.

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