Although in many regions of the U.S. the least expensive electricity is generated from light-water reactor (LWR) plants, the fixed (capital plus operation and maintenance) cost has increased to the level where the cost plus the associated uncertainties exceed the limits deemed acceptable by most utilities. The operation and maintenance cost has increased about 25% annually during the early 1970s. The main causes are increased requirements due to safety, environmental, and security considerations. The largest improvement is co-location of units, which gives up to 37% savings in O&M cost. The rising trend of LWR capital cost is investigated. Increased plant requirements of equipment, labor, material, and time due to safety, environmental, availability, and financial considerations and due to lower productivity and public intervention are the major causes of this rising cost trend. An attempt is made to explore the elements of a comprehensive strategy for capital cost improvement. The scope of the strategy is divided into three areas. The first includes improving the current design, project management, and licensing practices. The second area, standardization, is found to reduce cost by 6 to 22% through Duplication and Reference System options. Due to lack of commercial experience, the status of Flotation is not clear. Replication presents no significant improvement. The third area is improved utility structure and finance. Electric utilities with improved organizational structure can save up to 30% of their regional average capital cost. A proposed option of Ultra-accelerated Depreciation (UAD) financing is investigated. In addition to increasing the availability of capital, this UAD financing, unlike other financial schemes, is expected to decelerate future rise of electricity prices. A computer code, ULTRA, is developed to assess this option.
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