Vogtle should worry about cost, not water

Some fear that the addition of two new nuclear reactors to the Alvin W. Vogtle Electric Generating Plant might be derailed because of environmental concerns that the facility’s draw from the Savannah River would increase from 1 percent of the river’s annual flow to 2 percent.

Supporters of what would be the region’s biggest construction project since Vogtle Version 1.0, however, should be more worried about this: Can the power plant’s owners afford the expansion?

Utility giant Southern Co., whose Georgia Power subsidiary owns the majority of Vogtle, moved forward with confidence on its plans to double Vogtle’s size until last month, when it recoiled from sticker shock. The $4 billion price tag it was forecasting a couple of years ago was apparently nowhere near the price being asked by Westinghouse Electric Co., whose AP1000 was selected as the reactor of choice at the Vogtle project.

Negotiations have been continuing , but they become more urgent as weeks go by. That’s because on May 1, the utility is due to give its integrated resource plan, called an IRP, to the Georgia Public Service Commission, the state’s utility regulator. The plan, among other things, will spell out how the company plans to provide power to the state during the next 20 years.

If Southern Co. and Westinghouse (which is part of Japan’s Toshiba Corp.) can’t agree on a price by then, the utility’s Plan B will have to include non nuclear facilities, such as gas- and coal-fired power plants. Regulators simply won’t sign off on a nuclear power plant expansion if they don’t know how much it will eventually cost ratepayers.

Consider the lessons learned from the original construction of Vogtle, which went from an estimate of $975 million for four reactors to a final cost of $9 billion for two. Back then, the inflation was driven largely by delays caused by regulatory red tape that occurred after the Three Mile Island incident in 1979.

What’s driving the cost increase now? Supply and demand.

The supply is limited: The AP1000 and General Electric’s ABWR are the only Nuclear Regulatory Commission “pre-approved” ( i.e., no red tape) reactor designs, which make them highly attractive technologies. Also, the ultra-large steel forgings used in the reactors are produced by only one company, in Japan.

The demand side is huge: There are plans for more than 30 nuclear power plants in the U.S., mostly in the Southeast. While we’ve been talking about a “nuclear renaissance,” other countries have been doing it: T here are more than 30 nuclear plants under construction around the world, and many more are being proposed in developing nations such as China and India.

Manufacturers such as Westinghouse clearly have the upper hand, but if they’re not careful, they’ll price themselves out of the power market and cause the utility providers to burn more fossil fuel to power our air conditioners and widescreen TVs.

Hand-wringing over the impact of Plant Vogtle’s siphoning an extra 1 percent of water out of the Savannah River will be fashionable so long as we’re in a drought.

Hand-wringing over whether the project is economically feasible – well, that will never go out of style.

VENTURE CAPITAL: I had a chance to catch up with former Mercedes-Benz of Augusta owner David Karangu the other day. It turns out he has started a private equity group called Ivory Venture Capital to help fund start up companies in the metro area.

He said he has “probably looked at 10 businesses” since hanging his shingle outside his office at 211D in the Hudson Trace office complex off Stevens Creek R oad last month.

“It would be great if I could get two leads a week,” said Mr. Karangu, who also used to own Fairway Ford in Evans. He said he would like to specialize in medical start ups but is willing to consider funding any company with potential. If the investment exceeds his capital, his relationship with investment banker Goldman Sachs, the Wall Street firm that handles his personal portfolio, he said .

EVEN MORE VENTURE CAPITAL: Mr. Karangu’s firm might someday be big enough to finance a deal like the one that Washington, D.C.-based Allied Capital Corp. did last month when it ponied up $68 million to support the buyout of Augusta Sportswear by private equity firm Quad-C Management and members of Augusta Sportswear’s management team.

The athletic apparel and uniform company’s previous owner , Linsalata Capital Partners, of Mayfield Heights, Ohio, had doubled the size of the company since it acquired a majority stake from the Marks family of Augusta on Dec. 31, 2004.

“Augusta Sportswear has been an excellent platform yielding our firm its largest single gain on investment (read: cha-ching!),” Linsalata Managing Director Rob Weber said in a statement.

Augusta Sportswear, with about $200 million in revenues, operates facilities in Augusta; Sidney, Ohio; Olathe, Kan.; Seattle; and Tenabo and Becal, Mexico.

AUTHORITY UNITY?: I know I’ve been talking a lot about unity lately, but it just keeps coming up in public discourse. The latest: Should Richmond County have a one-stop shop for all things economic development?

City Administrator Fred Russell thinks it’s at least worth talking about, based on comments he made during a recent Augusta Commission finance committee meeting, which was prompted by recent discussions of creating a governmental authority for south Augusta.

Community leaders there want a group with the same kind of powers as the Downtown Development Authority (which focuses only on the central business district) and the Development Authority of Richmond County (whose industrial mission is not focused on a particular part of the county).

“I would like at some point to have a conversation about an Augusta development authority to cover our community as it is ... instead of giving our dollars to smaller groups with a specific focus … ,” Mr. Russell said. “ Otherwise we’re going to keep developing focus groups with boards of directors, but (who) aren’t looking at the total picture.”

Creating a catchall economic development group could create a more effective and efficient entity, or it could create a bureaucracy whose focus is so broad that it never really gets anything done.

Regardless of the outcome, the process of actually getting it would result in political havoc this area hasn’t seen since the consolidation of the city and county governments more than 10 years ago.

Allow me to digress for a moment to quote from a scene in the movie The Warriors, in which the smooth criminal Cyrus tries to persuade New York City’s gangs to form a singular, street-level syndicate: “We have been unable to see the truth, because we have been fighting for 10 square feet of ground ... our turf, our little piece of turf.”
The monologue could just as easily apply to the county’s existing governmental and quasi-governmental economic development groups – the problem will revolve around who gets to be “in charge.”

Cyrus sought unity, and his thanks was a bullet in the chest from someone who preferred to rule his “little piece of turf” rather than become prince of the kingdom. Nobody is going to get shot over talking about merging the county’s economic development “gangs” to fight for something larger than their “turf,” but if Mr. Russell is truly serious about pursuing a single agency concept, he’ll have a political rumble on his hands.

Dig that.

THIS 'INTERNET’ THING SEEMS TO BE A BIG DEAL: Most people (“most” meaning those with electricity and running water) born after 1988 have never known a world without the Internet.

If this describes you, your early childhood memories might have included playing Frisbee with one of the 257 free America Online trial CDs your parents received in the mail or listening to them yammer about the superiority of Netscape Navigator over Mosaic while trying to watch Full House.

I was not born in 1988, and I have no such memories.

My first introduction to the Internet was pornography.

In 1994, I was a young reporter for a small daily newspaper in southwest Utah. I can recall only two national stories from that year: 1. The O.J. Simpson murder melodrama, a story in which I had little personal interest; and 2. How the “Internet was changing America,” in which I had absolute zero personal interest because I barely knew what the Internet was and had never even been “online” before.

You can imagine how I was taken aback when I was assigned to do a story on the scourge of “Internet pornography.” Asking me to write a news story about the societal impact of online pornography would be akin to asking someone who just witnessed the Wright brothers’ flight at Kitty Hawk about the societal impact of a man walking on the moon.

As I write these words, (Feb. 20, 2008, 7:33 p.m. EST) it seems unfathomable to say the newspaper I worked for just 14 years ago had no more than three computers with Internet access. One of those belonged to the paper’s IT guy, whose office was actually inside the photography department’s darkroom. I asked him to show me some Internet pornography, and he obliged.

He started typing, hit the enter button and – after 30 seconds of watching text boxes appear on the screen – pornographic images began to appear.

I recall asking something like, “So, there’s a lot of stuff like this on the Internet?”
“Oh yeah,” he said. “You can find anything you want online .”*

I wouldn’t find that out for another five years. It wasn’t until 1999 that I worked somewhere (here, actually) where I had the “information superhighway” (a term that, thankfully, nobody uses anymore) on my very own desktop computer. The Internet was still a novel thing back then. If a local business created a Web site, it was considered worthy of a news story. Within a year or two, not having a Web site was like not having a phone.

My generation could very well be the last to remember a time when people were able to get by without e-mail , instant messaging, Yahoo, Google, Wi-Fi , broadband, blogging and, of course, Internet pornography.

At this point, you might be wondering what’s the point here? The short answer: There is none.

I’m taking a trip down memory lane simply because I received this in the mail (e-mail) the other day:

“LOCAL JOHNSTON SC FLORIST OPENS WORLD WIDE WEB LOCATION
Richardson’s Florist in Johnston, SC has just opened a new location; open 24 hours a day, 7 days a week and just in time for Valentine’s Day. Customers worldwide can now visit, as well as purchase flowers from the shop at www.myfsn.com/richardsonsflorist.”

Welcome to the information superhighway, Richardson’s Florist; we’ve been waiting for you.

Watch out for the porn.

* Funny, considering that in 1994, e Bay, You Tube and MySpace did
not exist.