Utility CEOs See Coming Shortages, but Not Willing to Build Nuclear

Can you blame them?

What tech bros don’t get is that the big problem with nuclear has always been the cost. Always.

The Trump administration wants to churn dirt on a bevy of new nuclear power plants.

Electric utilities that power America have different plans.

Despite forecasts for spiking electricity use and pledges from the Department of Energy to bolster nuclear power, utilities aren’t inking contracts to build new plants with the large-scale, light-water reactors that have fueled American homes and businesses for decades.

“I wouldn’t build a nuclear plant,” Calvin Butler, CEO of Exelon, a major U.S. utility that doesn’t produce power but is aiming to do so in the future, told CNBC last week. “What I could do is lean in on combined-cycle gas turbines. What I could do is build community solar. What I could do is own battery storage.”

Duke Energy, a major utility in the Southeast, is now hedging after laying out loose plans in October to produce more than a gigawatt of new nuclear power by 2037.

“We still need to figure out what we’re going to do with cost overrun protection and how we’re going to protect our investors and our customers from overruns,” Duke CEO Harry Sideris said on an earnings call earlier this month. “Nothing going forward until we have those other items resolved.”

That hesitation is throttling Trump administration plans to reassert U.S. nuclear leadership globally — and to ensure there is enough power in the U.S. to win the artificial intelligence race with China. Experts say new builds are important drivers of industry advancement that will cut costs and boost innovation. They’re also needed to keep powering America with nuclear energy, as many of the 94 reactors in the U.S. near retirement.

“There’s not a single company out there talking about a brand new light water reactor, and that’s where the administration gets frustrated,” an energy lobbyist, who has close ties to administration and was granted anonymity to speak freely, told POLITICO’s E&E News. “The administration is a little tone deaf in understanding the trepidations from a Wall Street standpoint.”

The utility sector is grappling with a laundry list of nuclear concerns. It’s worried about high costs, hits to balance sheets and the availability of enriched uranium in the U.S. following a cut-off from Russian imports in 2028. Utility CEOs are also skeptical that the capital-intensive power will be needed if demand forecasts contract.

Nuclear construction is one of many areas of discord between the White House and utility sector.

The sector remains traumatized and skittish after sky-high cost overruns tied to construction of the Vogtle nuclear expansion in Georgia, completed in 2024 at roughly double the anticipated price tag. In 2017, South Carolina’s Santee Cooper and a project partner also abandoned two Westinghouse reactors at VC Summer after sinking $9 billion into the project.

“They don’t want to get caught the way that the Vogtle utilities and developers were,” said Advait Arun, senior associate for capital markets at the Center for Public Enterprise. “They’re weighing the odds.”

The Vogtle cost overruns sent Westinghouse into bankruptcy and created a public relations nightmare for Southern Co., the parent company of Georgia Power, which purchases power from Vogtle.

Dale Klein, a former NRC chair, said that utilities remain cautious.

“Utilities, by nature, are going to be conservative, and they’ll do what’s cheap, reliable, and quick,” Klein said. “There are a lot of memoranda of understanding that are being signed today, and MOUs are only worth the paper they’re written on. It just means they’re going to agree to work and think about things.”

He said the decision to contract a new nuclear plant could deliver a blow to the stock price of the company.

“If a publicly traded utility was to announce that they’re going to build a new large, conventional nuclear reactor, it’s very likely that their stock price would drop because Wall Street would be worried about the risk,” Klein said.

A nuclear fiasco akin to Vogtle could upend the balance sheet for a small or moderate-sized utility, experts said.

Overruns didn’t upend Southern Co.’s balance sheet because the utility was able to pass upfront costs onto ratepayers. Now, other states are aiming to get laws on the books, known as construction work-in-progress rules, that allow their utilities to do the same. A bill in North Carolina attempts to do that. A recently passed bill in Missouri allows utilities to pass on costs, but only for new gas projects.

“[Utilities] have to consider what’s right for the ratepayers, and that’s going to be the first big question,” said Rowen Price, a policy adviser at the center-left think tank Third Way.

But with electricity prices rising nationwide, the public utility commissioners that regulate the utility sector could thwart plans for rate hikes.

“If a utility wants to build nuclear, they have to be very careful in how they approach PUCs,” Arun said. “In light of broader concerns about affordability, we shouldn’t assume approval of rate hikes as granted, at least not to the degree that they could finance nuclear.”