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the cancellation costs added to current rates, Vepco rates will rise by 3.8 percent and remain far below the increase in inflation during the 1980s.
And Vepco rates, including cancellation costs and the cost of generating capacity to replace what North Anna 3 would have provided, will still be less than if North Anna 3 had been built.
There is general agreement that Vepco’s decision to cancel North Anna 3 was correct and prudent. However, the recent column by George Bowles states that “critics say the company erred by continuing work on the reactor long after it became clear that its construction was not economically feasible.” So they do. But the column fails to report that the State Corporation Commission hired a consultant — the respected management firm of Cresap, McCormick and Paget — to study the timing of Vepco’s decision to cancel and that Cresap, after a thorough study of Vepco’s decisionmaking process, reached the following conclusions:
*“ Vepco’s November 1980 decision to cautiously continue Unit 3 appears reasonable.”
*“Vepco implemented the approaches it selected to monitor and reevaluate project feasibility between 1980 and 1982 in a generally sound manner. Major errors or flaws were not evident in the completion of the tasks Vepco undertook.”
*“Had Vepco aggressively pursued alternative actions consistent with assigning the highest priority to confirming the feasibility of North Anna Unit 3, the cancellation decision might have reasonably been reached at most two to five months earlier than it was.”
Cresap did not suggest that any saving would have resulted if the decision had been made two to five months earlier and Vepco believes there would have been no savings. At least the same amount of work would have been necessary to complete the new cost estimate. So the same or greater costs would have been incurred, but on an accelerated schedule.
In short, the findings of the independent consultant for the SCC show that the timing of Vepco’s decision was as close to perfect as is reasonably possible in such a complex matter.
These facts regrettably missing from Bowles’ opinion column need to be considered in evaluating Vepco’s record. We believe it is a record that demonstrates Vepco’s commitment, in a difficult and changing energy situation, to providing reliable electric service at the lowest possible cost.
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