The forgotten refugee crisis.
The outgoing U.N. High Commissioner for Human Rights isn’t leaving quietly.
Time and Tide
Things are looking up for labor.
Lula’s Last Chance
Will compromise pay off for the Brazilian left?
Bush puts his contempt for consumers on glowing display.
Selling the War.
Fascists for Che
White supremacists infiltrate the anti-globalization movement.
Bell Helicopters skirted U.N. embargo to sell to Serbia.
Anti-abortionists take aim at public schools.
Liddy's no lover of labor.
Banking on Poverty
Predatory lenders take advantage of the poor.
In Person: Scott Ritter
BOOKS: The history of capital punishment in America.
A House in Disorder
BOOKS: Domestic labor in the shadows.
FILM: Elections of the absurd.
FILM: Beware, for I am the Master of the Flying Guillotine.
September 17, 2002
he 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 to demonstrate.”
he 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 last 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 elephant.
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.
ill 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.
ut 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 compete economically.
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.
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