by Hugh Jackson
In These Times magazine,
The only way new nuclear power plants
can make a profit, according to the Bush administration's blueprint
for nuclear power policy, is if corporations are allowed to capture
and then gouge consumers. Naturally, that's exactly what the White
House proposes to do.
The administration's "Nuclear 2010"
program, an effort to subsidize the development of new nuclear
power plants by the end of the decade, is the atomic component
of the Bush-Cheney energy agenda unveiled last year. The administration
requested $38.5 million for the 2010 program in its fiscal 2003
Energy Department budget. Bush's funding request has cleared House
and Senate committees with relative ease, and the full chambers
will vote on appropriations bills this fall.
The Department of Energy announced in
June that as part of the 2010 initiative, it will subsidize Dominion
Energy, Entergy and Exelon as they evaluate and get approval for
sites where new nuclear plants could be built. The Senate, meanwhile,
adopted an amendment in the massive energy bill it passed last
spring to create an office to oversee the 2010 program and effectively
enshrine the proposal in law. House and Senate versions of energy
legislation are in conference.
Like other Bush administration energy
proposals, their nuclear energy program is public policy by and
, for corporations. The program is based ~ - on a report prepared
for the DOE by the Near Term Deployment Group (NTDG), a panel
co-chaired by executives from nuclear powerhouses Duke Energy
and Southern Nuclear Operating Co. Of the panel's 13 members,
at least 10 are either directly employed by the nuclear industry
or have consulted for it.
Though prepared by corporate executives
and sycophants, the NTDG's report-titled "A Roadmap To Deploy
New Nuclear Power Plants in the United States by 2010"-is
remarkably candid about the numerous economic reasons why new
nuclear power plants should not be built. Summing up the folly
of new plant construction, the Bush administration's blueprint
states that "economic viability for a nuclear plant is difficult
The panel estimates that new plants could
cost as much as a staggering $2,128 per kilowatt of electricity
generated. Natural gas fired plants, by comparison, are likely
to top out under the most expensive scenarios at $682 per kilowatt.
Even the NTDG's lowest estimate comes in at $1,000 per kilowatt
of generating capacity- 46 percent higher than the highest estimate
to build a gas-fired plant. Using a more realistic cost of gas-fired
plant construction of about $500 per kilowatt-a cost for which,
unlike nuclear power, there is a track record in the real world-a
nuclear plant project built under optimum circumstances would
still cost twice as much as building a gas-fired plant. (Not surprisingly,
the NTDG does not give serious consideration to renewable energy
supplies or conservation, the single most effective contributor
to meeting energy needs over the Iast three decades.)
Massive up-front capital requirements
scare investors away, the blueprint explains, and investor enthusiasm
for new nuclear power plants is virtually non-existent. Investors
are right to be wary, the NTDG adds, because nuclear power plants
take a long time to build; and by the time they actually start
generating electricity, more power may be available on the market,
rendering >. the new plants even more of an economic white
So rather than giant nuclear plants, the
NTDG suggests, perhaps the industry's future lies with little
nuclear plants, specifically so-called pebble bed modular reactors.
The reactor fuel in these plants is inside graphite-coated, billiard-ball-size
pebbles instead of rods; and instead of heating water to turn
a steam-generated turbine, the reactor would use pressurized helium
to drive compressors attached to a generator. Touted as both safer
and less expensive to build than traditional, massive, water-cooled
reactors, these comparatively smaller gas-cooled reactors get
star billing in the administration's Nuclear 2010 plan. Of eight
designs for new nuclear reactors identified as "near term
candidates" in the 2010 report, the pebble bed modular reactor
"is the only one for which there is currently a potential
customer actively involved and investing in the plant's development."
But Exelon, the mother of all nuclear
power corporations and the "potential customer" referred
to in the NTDG report, recently walked away from a pebble-bed
demonstration project in South Africa. Prior to September 11,
boosters contended that a pebble bed was so safe it could be built
without a containment dome, effectively and dramatically slashing
plant construction costs. Now the notion of building a nuclear
reactor without a containment dome is more ludicrous; and there
are several other lingering uncertainties associated with the
pebble-bed design, not the least being the threat of all that
combustible graphite catching fire. The Nuclear Regulatory Commission
(NRC), which had begun analyzing the technology in anticipation
of a design application, has put that work in mothballs.
That leaves giant reactors. The NTDG analyzed
economic competitiveness of several large-scale reactor designs,
including the Westinghouse AP-600 and AP-1000. Those reactors
now appear to be the most likely candidates in the Nuclear 2010
initiative. But Westinghouse estimates that an AP-1000, the cheaper
of the two thanks to economy of scale, would cost $1,657 per kilowatt
of electricity generating capacity-more than three times the going
rate for gas-fired plants.
Will the market price of electricity cover
the costs of such an expensive project? The NTDG doesn't think
so, at least not in the short term. "A problem still exists
regarding high generation cost requirements early in life that
might exceed likely market prices," says the panel's report.
"One potential solution to this problem may include obtaining
power purchase agreements above market prices during the early
years of operation, this price subsidy to be returned later in
life when adequate price-cost margins have accumulated."
In other words, consumers would be forced
to buy power from the new nuclear plant, even if other, lower-cost
options are available. Such purchase power agreements could be
foisted on hapless consumers by state or regional regulators.
But even then the new plants would need millions in taxpayer subsidies.
And the public absolutely, positively must be locked out of the
permitting and approval process, lest pesky questions about safety,
security or other issues get raised that could delay construction
and produce that historical staple of nuclear power plant development-the
giant cost overrun.
Now is a particularly outrageous time
for government regulators to muzzle the public on an industry's
behalf-or even to ask the public to trust the NRC. The NRC is
facing several investigations for letting Entergy's Davis Besse
reactor in Ohio operate for years while aware of signs that acid
deposits might be eating away at the reactor vessel head. By the
time a softball-sized cavity in the head was finally discovered
earlier this year, the only thing preventing a high pressure coolant
release-and a potentially Toledo-free Ohio-was 3/8 of an inch
of stainless steel. An unscheduled shutdown of a nuclear power
plant costs the company money, and the NRC was putting profit
ahead of public safety. "Closest brush with disaster since
the 1979 Three Mile Island accident," observed one former
member of the NRC.
But Bush is embracing new nuclear power
plants anyway. By doing so, he is proposing heavy-handed government
command and control of electricity markets to enrich nuclear power
corporations, with consumers footing the bill. In the process,
the administration would give an unfair advantage to nuclear corporations
and stack the deck against competing energy sources, including
alternative and renewable sources.
The Nuclear 2010 blueprint prepared by
the NTDG attempts to rationalize the economics of nuclear power
plants by asserting repeatedly that, despite the frightening economics
of nuclear plant construction, the projects will be competitive
over the long term. There is nothing in the history of the commercial
nuclear power industry to buttress that claim. On the contrary,
the economic track record of nuclear power plants is characterized
chiefly by cost overruns, unexpectedly high operation and maintenance
costs, expensive unscheduled shutdowns, and an overall failure
to perform competitively. As recently as 1999, the NRC was predicting
early retirement for nuclear plants because the plants couldn't
In fact, nuclear utilities themselves
spent the last several years going to great lengths to convince
regulators in state after state that nuclear power plants could
not compete with other energy sources in a deregulated electricity
environment. The corporations were fighting to ensure that as
states deregulated their markets, electricity consumers-not nuclear
power corporations-would get stuck with the lingering debt on
nuclear plants. Such "stranded costs" are estimated
to have cost consumers tens of billions of dollars nationwide,
including $28 billion in California alone.
That explains why the industry and its
political apologists would consider building new nuclear power
plants even though they don't make economic sense. Taxpayers and
consumers can always be relied on to bail out the industry. The
industry was created by government, and government has propped
up nuclear power ever since through subsidies, tax breaks and
other supports. Washington has always guaranteed nuclear corporations
a return on their investment, no matter how misguided. There is
no reason to believe that government coddling is going to end
anytime soon, particularly not under this administration or, sadly,
today's unabashedly pro-nuclear Congress.
There is another path. Congress could
protect consumers from getting saddled with the costs of hulking,
inefficient and dangerous nuclear power boondoggles by simply
cutting off the spigot of public money and government handouts
to the nuclear industry. The DOE's industry-written map will only
lead consumers down a road to rip-off.
Hugh Jackson works for Public Citizen's
Critical Mass Energy and Environment Program.