The second 1974 Power Engineering article that Nick Touran has uncovered is Senior Editor Olds’ discussion of the massive jumps in power plant capital costs between 1965 and 1974 Power Plant Capital Costs Going Out of Sight.

The AEC required plant owners to report their estimate of the capital cost of any nuclear plants under construction, and update those estimates annually. Olds’ article is largely based on that data. All his dollar figures are in nominal dollars, the dollar of that year.

Figure 2. USA fossil plant costs bottomed out in 1966.

The paper is graced by a number of hand drawn, beautifully lettered graphics. Figure 2 shows that prior to 1967 fossil plant capital costs were falling reaching a low of $100/kW in nominal dollars in 1966. But in 1967, the cost jumped nearly 20% to $118. Unfortunately, Old does not take the fossil figures any further forward. But if he did he would see that 20% per year escalation continue unabated through 1974, Figure 3. //

Thanks to nuclear’s factor of 100,000 advantage in energy density over fossil, a technology that did not exist 15 years earlier, was working its way down a steep learning curve, and in 1967 was fully competitive with coal, when coal was as cheap as it ever was. Nuclear was insulated from both oil price and fossil pollution regulation.

But in 1967, a new omnipotent player emerged. In 1954, Congress had given the AEC complete and unfettered control over nuclear, both nuclear weapons and nuclear power. As Truman put it, atom power was “too important to be made the subject of profiteering”. The AEC had to both implement Mutually Assured Destruction, and promote and regulate nuclear power. The first responsibility included making sure everybody was petrified of the bomb.