Appalachian Power's 540,000 customers could end up paying to prepare a site for a nuclear reactor that never gets built.
Regulatory permission would allow Appalachian Power to pass development costs for a possible small modular reactor site in Virginia's Campbell County on to customers.
Here's what to know
A household consuming 1,000 kilowatt-hours each month would pay an additional $1.98 monthly from October 2027 through September 2028 if regulators approve the request, according to Cardinal News.
That amounts to an increase of about 2%.
The company estimates that preparing the site will cost about $100 million, while a 2024 Virginia law caps customer-funded recovery at $125 million.
The proposed charges would recover $20.6 million in the first year of Appalachian Power's anticipated six-year financing period.
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In a separate but related proceeding, State Corporation Commission staff raised concerns about customers covering development expenses without a reactor ever being built.
The application involves evaluating and preparing Joshua Falls, a property near Lynchburg, as a possible reactor site.
More background
Continuous electricity generation is a design goal for small modular reactors.
A modular reactor might generate 300 megawatts, compared with approximately 1,000 megawatts for a conventional reactor like the ones at Dominion Energy's North Anna plant. These reactors are smaller than conventional nuclear facilities.
Even with all necessary permits and approvals, the company has said the facility would likely begin operating in the middle or latter part of the 2030s.
Appalachian Power announced its interest in exploring a reactor in November 2024, identifying Joshua Falls as a potential location.
Another developer, Charlotte, North Carolina-based Geenex Power, is proposing a small modular reactor on cattle farm property across the James River in Amherst County.
Geenex said the location appealed in part because of its proximity to Appalachian Power's Joshua Falls substation and associated grid infrastructure, which it said could accommodate the reactor's output, Cardinal News noted.
What's being done?
Appalachian Power's bid for Department of Energy funding aims to reduce customers' share of the cost.
The State Corporation Commission, where the utility's rate request is pending, oversees the proposed cost recovery.
Seeking permits and licenses from the federal Nuclear Regulatory Commission is part of the development work, alongside studies to determine whether Joshua Falls is a suitable site.
An informational open house in Lynchburg was part of the public outreach effort, which also includes meetings with municipal governments, elected representatives, and property owners.
The future of the property's popular James River boat ramp has also drawn local attention.
A company official's written testimony identified the ramp's future as among the "earliest and most prominent local concerns," Cardinal News reported. Appalachian Power created JFBoatRamp.com to provide updates about the ramp.
The company emphasized the preliminary nature of its work in a statement to Cardinal News.
"These activities, including site studies and permitting efforts, are designed to reduce risk and inform future decisions while remaining subject to SCC oversight and consistent with state law."
Where can I learn more?
Appalachian Power's proposal raises questions about both customers' bills and the cost of developing small reactors. These stories cover other rate hike requests and prospects for smaller nuclear plants.
• Small reactors in the United States may be more competitive at factories than on the grid.
• U.S. utilities sought $31 billion in hikes while eyeing a $1.4 trillion infrastructure buildout.
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