Nuclear Industry Argues New Reactors Will Be Safer, but Will Public Buy That?

Rebecca Smith / Wall Street Journal 2may01

After years in the wilderness, the nuclear-power industry is back on the march.

Emboldened by Bush administration statements that nuclear power is an essential part of the national energy mix, proponents of the technology are examining new designs they believe could form the basis of a full-fledged revival. They are also pushing the Nuclear Regulatory Commission to staff up a licensing division that received its last new plant application in 1973.

If a younger generation of nuclear plants does make an appearance, it will probably be as additions to existing nuclear sites. That's because the sites have already weathered the NRC's rigorous site review, and the hardware -- substations and high-voltage transmission lines -- needed to get the power away from the plant and to users is already in place.

Three new nuclear designs that represent evolutionary improvements over existing reactors have been approved by the commission in recent years. But a completely different design is attracting the most attention is the pebble-bed modular reactor -- PBMR -- whose chief proponent in this country is Exelon Corp., formed through the merger of PECO Energy and Unicom, the old Chicago-based utility Commonwealth Edison.

As recently as Monday, staffers from the NRC met with Exelon engineers to discuss how they might handle a site application from the energy company, which already controls nine nuclear power plants. The company has invested $7.5 million in a pebble-bed test project in South Africa in partnership with Eskom Enterprises, the unregulated affiliate of South Africa's state-owned utility. If it decides to help fund a working model in South Africa, it will probably propose construction of one in this country as well.

But while Exelon executives and other nuclear-energy backers maintain that they can build reactors that cost less and are far safer than the 1960s and 1970s era plants still peppering the country, it isn't clear that the public is ready to embrace their argument. "We're not looking at this as a nuclear revival but as a relapse," says Paul Gunter, head of the nonprofit Nuclear Information and Resource Service in Washington, D.C. He believes the nuclear industry, which suffered from gargantuan cost overruns as well as a handful of highly publicized safety problems like the 1979 Three Mile Island near-meltdown, represents the "biggest managerial disaster" in U.S. history.

Largest Nuclear Generating Plants in US
Dots are nuclear reactors operating in the US, 2000
source: DOE Energy Information Administration

data source: Energy Insight

"I don't think the U.S. public will be fooled again," he says. "No matter what you say, it's dangerous technology."

Reactor safety isn't the only issue standing in the way of a nuclear comeback. Despite 40 years of commercial nuclear operations in the U.S., there's still no approved plan governing the disposal of radioactive waste. Currently, waste is stored at each nuclear plant site -- to the chagrin of nearby communities. Efforts to come up with a safe, large-scale disposal depot in the arid deserts of the West have met with stiff resistance from environmental groups and some politicians.

Other regulatory issues remain unresolved as well. The Price Anderson Act, which protects the nuclear industry against unlimited liability in the event of a nuclear accident, expires in August 2002. Unless it is renewed, say industry executives, it is unlikely any company would build a new plant. Even the small print of other regulations would require revision if the pebble-bed-reactor technology took off. For instance, the way the rules are currently written, a site that contained five small pebble-bed plants with a total output of 550 megawatts would pay five times the fees to the NRC of a single 550-megawatt plant.

Exelon's chairman, Corbin McNeill Jr., believes all of these obstacles are minor compared with the benefits of widespread deployment of new-technology nukes that would make the nation more energy self-sufficient and reduce air-pollution emissions. He also argues that the pebble-bed design will win public acceptance because it operates at lower temperatures and thus is less susceptible to catastrophic failure if its cooling system is crippled.

The pebble-bed reactors would be built in 110-megawatt units, only one-tenth the size of the most recently constructed conventional nuclear plants in other countries. At $150 million apiece, investment costs for PBMR units are relatively modest, construction times could be much faster and plants could begin selling power much more quickly. That would reduce carrying costs that crippled utility balance sheets a generation ago.

Top Operators
Five companies control nearly half the nuclear generating capacity in the US

Exelon (includes AmerGen)	Operator Share of Total 17.0%
Entergy	8.7%
Duke Energy	7.3%
Tennessee Valley Authority	5.8%
Southern Company	5.7%

source: RDI, Boulder, CO

Another plus, for proponents, is the fact that the NRC has been "streamlining" its approval processes since the mid 1980s. In addition to precertifying reactor designs, the NRC has limited the amount of public intervention that's possible. "It's maybe 1% to 10% what it used to be," says Mr. McNeill. "Interminable delays are a thing of the past."

If Exelon goes forward with its South African venture this fall, it would be in a position to submit an application to add a plant at one of its U.S. sites in the second half of 2002 and would hope to have an operating unit by 2006.

Jerry Wilson, senior policy analyst at the NRC's Office of Nuclear Reactor Regulation, says the agency has been in discussion with four companies -- Exelon, Entergy Corp., Dominion Resources Inc. and Southern Co. -- about possible submission of site permits. Since the process has never been used before, both sides are trying to figure out exactly how it will work and how long it will take.

"This is the first serious discussion we've had about new plants in decades," says Mr. Wilson, who joined the commission in 1975. "We are actively preparing ourselves" for a wave of applications.

Entergy plans to seek permission to site "a plant or two," alongside existing nuclear plants, says Entergy President Donald Hintz. But it's leaning toward General Electric and Westinghouse advance designs -- not the pebble-bed reactor, which isn't yet in commercial use.

All of this is taking place against the backdrop of electric-industry deregulation, which has encouraged a handful of companies like Exelon and Entergy to buy nuclear plants from old-line utilities and to operate them at much higher efficiency levels. Instead of plants being mothballed at the end of what was once thought to be their useful life -- around 30 years -- five reactors have been licensed by the NRC for another 20 years of operation. Within the next 15 years, 40% of the 103 licensed U.S. reactors are likely to request similar life extensions.

The push by the nuclear-power industry has also been aided by falling nuclear-fuel costs as the costs of oil, coal and natural gas have soared. Add to that the growth of deregulated wholesale electricity markets in which all producers are paid the cost demanded by the highest-cost generator and the nuclear industry sees an opportunity for bigger profits than ever before.

The activist community, which mobilized to turn the public against nuclear power in the post-Three Mile Island era even as their primary targets -- like the Diablo Canyon plant in California and the Seabrook plant in New Hampshire -- got built, is also hoping for a revival. Mr. Gunter says his group is organizing an "action camp" near Exelon's Dresden reactor in Illinois to "revitalize and refocus opposition."