Opinion ID: 2125013
Heading Depth: 1
Heading Rank: 2

Heading: The Midland Plant Construction

Text: The plans for the Midland plant were announced in 1967 by Consumers Power Company. As of today, it has been almost 14 years since the site outside the city limits of Midland was chosen. Since its inception, it has been plagued by much controversy at the state and federal levels. Originally the plant was to be completed by 1974-1975 at a cost of $370 million. It is not near completion, however, but Consumers Power anticipates completion by 1984-1985. The current construction costs, which have been subject to tremendous inflationary pressures, and additional safety engineering costs are now set at $3.1 billion by Consumers Power and $3.5 billion or more by the staff of the MPSC. See MPSC security case no U-6360, dissent, p 2 (August 4, 1981) (Anderson, dissenting). The cost-plus construction of Midland plant is an excellent example of the phenomenon that if anything can go wrong, it will. It has set records in long construction time and high expense. In addition, it is located in an urban center which has forced the Nuclear Regulatory Commission to closely scrutinize and expand safety requirements amidst frequent public outcry. Moreover, the design of the nuclear units is substantially similar to the notorious Three-Mile Island units. MPSC case no U-6360, supra, dissent, p 4 (Consumers Power's Appendix, p 329b). There have also been specific problems with soil erosion, underground caverns, and the ventilation systems. In addition, Consumers Power has been forced to conduct stress analyses on the reactor pipes which has impeded completion of the plant and increased its actual and projected costs. In short, the projected costs of the Midland plant have increased 737% from $370 million to $3.1 billion. There have been approximately 11 years of construction which could easily escalate to 15 years before completion of the plant. Moreover, energy needs were either not originally considered by MPSC or substantially overestimated, according to Commissioner Anderson. When the Midland units become operational in 1984, they will generate approximately 1,350 megawatts (mw) of electricity. In 1984 alone, Consumers expects an excess summer generating capacity of 35.4% (1,842 mw) and an excess winter capacity of 56.6% (2,323 mw). Moreover, in 1985, the excess capacity is estimated to be 38.3% (2,113 mw) for the summer and 50.1% (2,609 mw) for the winter season. MPSC case no U-6360, supra, dissent, p 5. Nevertheless, Consumers still maintains that this plant is needed because their energy forecasts indicate strong future energy demand. However, there is no record of commission consideration of this point in a securities case, although the staff of the MPSC generally considers a 20% reserve capacity as being desirable. MPSC case no U-6360, supra, dissent, p 5. Moreover, justification for increased energy capacity is based on an assumption of increased energy usage and demand which is not taking place. This problem is further exacerbated by the fact that these excess reserves are resulting in a period of energy conservation. In her dissent in case no U-6360, Commissioner Anderson stated after reviewing the procedural and construction history of the plant that: The point is the Michigan Public Service Commission majority does not examine these relevant issues before or during construction. Instead, it allows a utility company's investors to put millions or, as in this case, billions of dollars into facilities that it claims will be evaluated for viability at the time a company requests inclusion of such facilities in its rate base. II. FACTS (DETROIT EDISON)