1. 1  Power plant costs are key factors in energy market policy decisions Key assumptions in the EIA NEMS model Input factors to all energy economic models used by government, industry, & NGOs Important considerations for energy market financial analysts, consultants, and academics  EIA already collects some power plant related costs Fuel Certain environmental control equipment  EIA does not collect power plant cost data for Construction Operations & maintenance Major refurbishments, modifications, or upgrades expenditures

2. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 2  Consider collecting plant costs at all 3 levels of a plant’s life cycle Plant Construction Plant Operation (non-fuel) Plant Decommissionin g

3. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 3  EIA Costs are a key driver for new capacity additions in the NEMS model projections. The NEMS model uses “overnight” capital costs as an input. This represents the cost of building a power plant independent of time and financing. The inflated expenditures and financing costs are calculated endogenously in NEMS.  Public Input for other energy models Of interest to other government entities (e.g., the DOE Office of Nuclear Energy) Universities

4. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 4  EIA uses construction costs derived from a 2010 study completed by the engineering consulting firm, RW Beck The RW Beck study allows EIA to compare construction cost estimates for new technologies across a consistent basis Construction cost data from actual projects would be very valuable as a means to update and validate the RW Beck estimates  Public utility commission filings  Other government organizations  Industry associations  Company reports  Press

5. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 5  For the large planned power plant projects, EIA wants the costs data broken down in the same manner as is shown in Table 1 in the next slide. This detail is needed to determine the reasons for the differences between extended and realized costs Direct Indirect Owners Contingency (for estimates only) Total overnight costs (for estimates only) Total project cost without financial charges Total project cost with financing charges  Note that for units early in the planning process, in all probability the estimates will be in a form similar to the one shown in the first column in Table 1. However, once construction of the unit is completed, the data will be in the form shown in the second column in Table 1 Broken down for large projects only

6. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 6  All units that entered commercial operation as of 2014  All coal and nuclear units under construction as of December 31, 2014 This will capture the ongoing Vogtle and Summer projects, plus any coal units currently under construction Short lead time renewable and natural gas plants will be surveyed when they enter commercial operation  Estimates for planned nuclear power plants With the exception of Vogtle and Summer, all of the other recently announced nuclear projects are on hold and are not expected to start construction until the later part of this decade For the later group, EIA will track estimates for these units as their planning strategies evolve over time. That will aid in projections of unit operational dates. To keep this process simple, respondents need not report estimates if they have not changed by some reasonable threshold (e.g., 20 percent)

7. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 7 Plant Operation (non-fuel)

8. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 8  Operations & Maintenance.  Capital  Specific large capital expenditures for individual technologies  Why are these so important? Significant costs, in some cases, can exceed a billion dollars Aging nuclear fleet and life extensions Environmental requirements for coal and nuclear

9. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 9  The operations and maintenance costs for power plants currently operating  Capital expenditures for power plants currently operating  Specific large capital expenditures for individual technologies Nuclear  Power uprates  Life extension programs  Steam generator replacement  Cooling towers Coal  Pollution control equipment  Cooling towers Renewables  Technology specific, for example blade/gear box replacement (wind), drilling costs (geothermal), inverter replacement (solar), turbine replacement (hydro)

10. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 10  Pollution control capital costs (Form 860 Schedule 6, Part G & H) Requires the installed cost of existing and anticipated FGD and FGP unit costs be reported These fields would be moved to a new cost schedule on the Form 923 as a major plant capital expense Definitions revised to fit EIA’s definitions of major capital expenditures for coal units  Pollution control equipment O&M Costs (Form 923 Schedule 8, Part B) Requires O&M and capital expenditures for combustion byproducts from coal plants EIA proposes replacing these O&M costs with general costs from each technology. For coal plants, EIA would collected both fixed and variable O&M costs  These costs would be collected on the new cost schedule of the Form 923  For most coal plants, variable costs are associated with environmental control equipment & waste production. This would capture a summary of what is being lost by aggregating the information already collected

11. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 11 Plant Decommissioning

12. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 12  Costs associated with taking a unit out of service  Potentially most significant for nuclear plants  Information already collected at the PUC level and by the NRC  NEMS model is relatively insensitive to changes in nuclear decommissioning costs  EIA recommends not collecting these costs for this survey cycle. If need be, these costs can be collected directly from the PUCs

13. Michael Leff and Jim Hewlett, Washington, DC, May 10, 2012 13 Plant Construction Plant Operation (non-fuel) Plant Decommissionin g