[ RadSafe ] Slow Start for Revival of Nuclear Reactors in the US

[John Jacobus]

>From the NY Times
http://www.nytimes.com/2006/08/22/business/22nukes.html?pagewanted=2&_r=1&th&emc=th
--------------------------------------------------------------------------------
August 22, 2006
Slow Start for Revival of Nuclear Reactors 

By MATTHEW L. WALD
BALTIMORE — Nobody in the United States has started
building a nuclear power plant in more than three
decades. Mayo A. Shattuck III could be the first. 

As the chief executive of Constellation Energy, a
utility holding company in Baltimore that already
operates five nuclear reactors, Mr. Shattuck is
convinced that nuclear power is on the verge of a
renaissance, ready to provide reliable electricity at
a competitive price. He has already taken the first
steps toward achieving that, moving recently to order
critical parts for a new reactor.

But Constellation’s neighboring utility, the PPL
Corporation, takes a different view. Even though PPL
has successfully operated two reactors since 1983, its
chairman, William F. Hecht, said that he had no plans
for new nuclear plants.

When nuclear reactors were first commercialized almost
half a century ago, every self-respecting electric
utility wanted one. They were encouraged by a
government that saw nuclear energy as a peaceful,
redemptive byproduct of the deadly power unleashed at
Hiroshima. The federal official for promoting nuclear
energy, Lewis L. Strauss, said it would produce
electricity “too cheap to meter.” 

It has never given consumers anything like that. But
with the industry now consolidated so that most
reactors are in the hands of a comparatively few
operators, utility executives are sharply divided over
whether nuclear power offers an attractive choice as
they seek to satisfy a growing demand for electricity.

For them, the question comes down not so much to
safety and environmental impact but to whether the
potential reward is worth the financial risk. And
those who already operate several reactors are prone
to want more.

The debate within the utility industry over reviving
nuclear power has taken on added importance, though,
because unlike plants that burn coal and other fossil
fuels, reactors do not produce gases that contribute
to global warming.

And once again, Washington is encouraging utilities to
push ahead. The summer of 2005’s energy bill offered a
generous production tax credit, insurance against
regulatory delays and loan guarantees. Earlier
legislation gave the industry money to help plan new
plants. And they continue to benefit from a ceiling on
liability damages in case of an accident.

Despite nuclear power’s promise as a clean energy
source that could hold down emissions of global
warming gases, most environmentalists are skeptical of
the latest claims by its advocates. They say that
utilities, at best, will move ahead with a handful of
plants that will receive lavish incentives from the
government. But the risks of nuclear power are still
so high, they argue, that no utility will be willing
to put its own money into building a plant unless the
federal government heavily subsidizes it.

“What dismays me about the present situation is the
extent to which the Congress and the administration,
and now an occasional state legislature, have rushed
to anoint it as the solution to climate change,” said
Peter A. Bradford, a former member of the Nuclear
Regulatory Commission and former chairman of the
public service commissions of both Maine and New York.
If nuclear plants cannot compete without subsidies, he
said, they should not be built.

Today, nuclear power supplies just under 20 percent of
the electricity used in the United States. Its share
has been slipping lately as new plants running on
other fuels have come online.

With the price of natural gas increasing, coal has
emerged once again as the most popular way to generate
electricity, a trend that — if it continues — is
expected to lead to a significant rise in emissions of
carbon dioxide. The utility sector emits about a third
of the carbon dioxide produced in this country, nearly
all of that from coal.

Adding dozens more nuclear reactors to that mix could
reverse the rise in carbon dioxide from the
electricity-generating system, but its advance would
also run up against certain limits.

Nuclear plants cannot replace all of the fossil fuel
used in power generation because current nuclear
designs do not easily alter the power output. Plants
running on natural gas and coal, by contrast, can
adjust their output over the course of a day to match
demand. 

For a long time, the underlying confidence of
utilities in nuclear technology was moot because the
economics would not support a new reactor; all those
ordered after 1973 were canceled. 

But now, because of high prices for natural gas and
uncertainty about how emissions from coal plants will
be regulated in the future, the nuclear industry is
moving from near death to the prospect that perhaps a
handful of plants will be ordered in the next few
years. The Nuclear Regulatory Commission counts 27
potential reactors under consideration; 103 are now
operable. 

For all the momentum behind the push, however, there
is still a high degree of skepticism within the
utility industry. 

PPL, for example, has successfully operated two
reactors in Berwick, Pa., for 23 years. But with some
utilities around the country making preliminary moves
or joining consortiums to explore new designs, PPL is
absent.

There are better places to put the money of
shareholders, Mr. Hecht of PPL said. At the moment he
sees a much greater advantage in cleaning up his
coal-fired plants, investing $1.5 billion to scrub out
most of the sulfur dioxide. That would not only
benefit the environment but also generate pollution
credits PPL can profitably sell. 

That decision was “dull and basic,” Mr. Hecht said,
but adheres to a paramount goal: maximizing
shareholder returns. He won’t rule out nuclear plants
forever, Mr. Hecht said in an interview, but the
business case would have to be a lot clearer than it
is now. 

“Technology often has zealots, it seems, behind it,”
he said of companies moving forward on nuclear power. 

By contrast, Constellation Energy not only wants to
build reactors for itself, it also has formed a
partnership with a reactor manufacturer to build and
operate them for other utilities. 

“This organization has a history of feeling that they
have done well in nuclear,” Mr. Shattuck said.
Constellation executives think that they “can continue
to do well in nuclear and shouldn’t shy away from
their responsibility.”

Constellation plans to apply for a reactor-operating
license by the end of 2007, probably at either the
Calvert Cliffs site in Maryland where it runs two
nuclear reactors built in the 1960’s and 1970’s, or at
Nine Mile Point, in Scriba, N.Y., on Lake Ontario,
where it operates two reactors it bought in 2001.

Its decision has implications beyond the corporate
bottom line for the global environment. There are also
arguments over nuclear waste and the risk of
accidents. Around New York City, especially, there is
concern over reactors as terrorist targets.

But the risk that really matters to utility executives
is financial. Among the companies that would actually
build these plants, executives focus more on uncertain
factors like the future price of power, the cost of
producing competing fuels, and the cost of cleaning up
coal plants to meet standards for the pollutants that
Washington does regulate — sulfur dioxide, nitrogen
oxides and soot.

At this point companies do not face any constraints on
carbon emissions. 

Companies that want to build — among them Entergy,
Dominion and Duke Energy — talk about new designs
intended to further reduce the risk of an accident and
their ability to manage nuclear waste until the
government eventually opens a national waste
repository.

Opponents often cite the risk of accidents and the
problem of nuclear waste, but the companies that do
not want to build say that those are not factors in
their decisions. 

When PPL builds a power plant, it usually sells the
power first, and uses the signed contracts to reassure
the investors and the bankers from whom it is seeking
financing. “I’m not going to build any large
generation unhedged,” Mr. Hecht said.

But this is not easy with a nuclear plant. For one
thing, Mr. Hecht said, no one could be sure when it
would be finished. And despite the industry’s efforts
to shorten the time from order to completion, it could
still be 10 years, he said. 

“If you build 1,000 megawatts,’’ he asked, “how are
you going to find someone to buy it 10 years out, for
10 years after it is finished?”

A nuclear plant ordered in 2007 could well turn out to
be a more economical power source in 2020 than a coal
plant ordered at the same time, he said, but the range
of uncertainty is much larger. He is content to let
others take the lead.

Constellation Energy insists it is driving risk out of
the proposition. Constellation, which doubled its
nuclear bet in the 1990’s by buying more reactors as
the utility industry reorganized, contends that it has
demonstrated one marketable skill — running reactors
profitably — and that it could quickly follow a new
plant with a copycat, building both on time and on
budget. 

Constellation has an expertise gained in the early,
difficult years of nuclear power, Mr. Shattuck said,
citing Michael J. Wallace, president of his company’s
generation division.

“Mike is the only executive in the utility sector
today who was an executive responsible for building
new nuclear plants last time around,” he said. Mr.
Wallace oversaw the construction and start-up of two
nuclear plants built in Illinois: Byron, which fully
entered commercial service in 1987, and Braidwood, the
following year.

Constellation proposes a fleet of plants, identical
down to the “carpeting and wallpaper,” Mr. Shattuck
said, reducing the design costs on subsequent reactors
to near zero. Operating processes would be identical,
and operators could be shuffled among the plants,
something that is often impossible today even with
adjacent reactors. The company wants partners that
would offer either equity or operating skills. 

Constellation has a partnership, called UniStar
Nuclear, with Areva, the French-German company, which
is owned by Framatome and Siemens, to build a model.
One model is under construction in Finland. 

“A lot of it is establishing a model that mitigates
risk as you move forward,” Mr. Shattuck said. “A lot
of players out there haven’t quite figured out how
they’re going to go to their boards and ask for $4
billion, for which I’ll get cash flows in 13 years.”

Last December, Constellation and FPL, parent of
Florida Power and Light, announced that they would
merge, creating the country’s largest competitive
marketer of power. That would put the company in an
even better position to build new reactors, Mr.
Shattuck said.

Some experts, however, remain skeptical that new
reactors should be built, although they acknowledge
this is increasingly likely. In the last 20 years or
so, said Mr. Bradford, the former regulator, utility
restructuring has often shifted the risks of new
construction from ratepayers to investors.

“What the Congress has done now, for the first six or
so plants, is to find a third pocket,” he said. “Now
they’ve called upon the taxpayer to pony up.” 

But even if a few plants are built, industry insiders
do not expect nuclear power to assume a significantly
greater role. Roger W. Gale, an electricity expert and
former Energy Department official, asks several
hundred utility executives each year what they foresee
in their industry.

While they are convinced that a new plant will be
ordered soon, the more than 100 senior utility
executives who responded also said they do not expect
“a future where nuclear generation represents a larger
share of generation” than today.

+++++++++++++++++++
>From an article about physicians doing clinical studies: 

"It was just before an early morning meeting, and I was really trying to get to the bagels, but I couldn't help overhearing a conversation between one of my statistical colleagues and a surgeon.

Statistician: "Oh, so you have already calculated the P value?"

Surgeon: "Yes, I used multinomial logistic regression."

Statistician: "Really? How did you come up with that?"

Surgeon: "Well, I tried each analysis on the SPSS drop-down menus, and that was the one that gave the smallest P value"."

-- John
John Jacobus, MS
Certified Health Physicist
e-mail:  crispy_bird at yahoo.com

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