Nuclear Power: Financing Risks
The size and complexity of new nuclear power plant projects, the longterm nature of the construction phase and the uncertainty associated with costs create a high degree of credit stress on utilities. Plant cancellations are not entirely uncommon, and in the US four half completed plants financed by the Washington utility now known as Energy Northwest were forced into closure due to cost overruns caused by construction delays, rising interest rates, inaccurate demand estimates and public opposition.
Litigation on two of the units led to the largest default in the history of the US municipal bond market. During the 1970s and 1980s, 117 plants in total were cancelled in the US.