Re: NY Times article, "Nuclear Power's Second Act"

[Jim Muckerheide <jmuckerheide@delphi.com>]

> I missed this article, and appear to be unable to connect to the location.
> Does anyone have a copy ?
> 
> Thanks
> 
> Ron LaVera
> rlavera.@entergy.com


> Nuclear Power's Second Act
> 
> December 20, 2000
> 
> By MATTHEW L. WALD
> 
> VERNON, Vt.   Nobody has ordered a new nuclear plant in this country
> in more than 20 years, but rising demand for electricity and prices
> for natural gas are forestalling extinction and giving aging
> reactors a new lease on life. Consider Vermont Yankee, on the banks
> of the Connecticut River here.
> 
> For years many people thought that the plant was at death's door.
> It is one of the oldest nuclear reactors that is still operating in
> the United States. The core shroud, a crucial internal part that
> holds the fuel in place and channels cooling water, is showing
> damage from age. The owners are short of money.
> 
> But now a bidding war is brewing among three eager buyers, and
> financial analysts say the winner is likely to invest even more to
> seek to extend its operating license for decades and possibly to
> raise its power output.
> 
> Similar decisions have quietly transformed dozens of plants around
> the country. While no one expects any American utility to order a
> new nuclear plant in the foreseeable future, the overall effect is
> a much-improved prospect for the long-battered industry.
> 
> Several factors are helping to turn nuclear white elephants into
> valuable heirlooms. The price of natural gas, the main source for
> new generation, has quadrupled in the last year. The market price
> of electricity has soared under deregulation, and the growing
> economy has led to shortages of generating capacity.
> 
> "Suddenly people realize that you can actually make money with
> these plants," said Ted Marston, the chief nuclear officer at the
> Electric Power Research Institute, a nonprofit research consortium
> in Palo Alto, Calif., that has helped utilities obtain license
> renewals beyond the initial 40 years for which they were approved.
> 
> In March, the Nuclear Regulatory Commission approved a 20-year
> extension on a twin-reactor plant in Maryland, Calvert Cliffs,
> which is now owned by the Constellation Nuclear. Two months later,
> it did the same for the three-reactor Oconee plant, owned by Duke
> Energy, in South Carolina.
> 
> Since then, Mr. Marston said, the market value of nuclear reactors
> has increased tenfold.
> 
> The effect is visible here. In October 1999, the AmerGen Energy
> Company, a partnership between the PECO Energy Company, the parent
> of Philadelphia Electric and itself a unit of the Exelon
> Corporation, and British Energy, made a $23.5 million bid in a
> battle for Vermont Yankee.
> 
> But the state Department of Public Service, which represents the
> interests of energy consumers, said the price was too low, helping
> kill the deal. AmerGen is now offering more than $93 million, but a
> second company, the Entergy Corporation, based in New Orleans, has
> indicated it will offer more. Entergy recently announced a merger
> with the FPL Group, parent company of Florida Power and Light,
> which would create the nation's largest electric utility.
> 
> The Vermont Public Service board has told Entergy to file a bid by
> Jan. 12, and told the plant to cooperate with the company in due
> diligence. The board also told two other companies, Dominion, based
> in Virginia, which has expressed interest, and Constellation
> Nuclear, that it would offer them similar accommodations.
> 
> The companies say they want to buy up reactors around the country,
> and through economies of scale and their extensive nuclear
> experience, run them better and make more money from their
> operations. AmerGen has already bought Three Mile Island 1, the
> undamaged twin of the reactor near Harrisburg, Pa., that
> experienced the nation's worst nuclear accident. It has also
> acquired Clinton, in southern Illinois, and Oyster Creek, in Toms
> River, N.J. Entergy has a deal to buy Nine Mile Point 2 and James
> A. FitzPatrick, near Scriba, N.Y., and Indian Point 3, in Buchanan,
> N.Y. 
> 
> While Vermont Yankee has not yet applied for a license extension
> its license is good until 2012, and the sellers are leaving that to
> a new owner   applications have been approved or submitted for
> about a third of the nation's 103 surviving reactors. In addition,
> in the last decade, 57 reactors have quietly received the
> commission's permission to increase heat output and thus electric
> production, according to the Nuclear Energy Institute, a trade
> association in Washington. Some did it more than once. The capacity
> increase totals 2,200 megawatts, which is the equivalent of adding
> two huge reactors.
> 
> The independent company that owns Vermont Yankee says output could
> probably be raised by 15 percent at a cost of about $200 for every
> kilowatt of additional capacity, which is far cheaper than a
> kilowatt of capacity at a new natural gas plant. Making the
> investment only makes sense, though, if the owner believes that the
> plant will run for more than a few years.
> 
> The higher prices for reactors have pushed them roughly into the
> range of prices for fossil fuel plants, and do not approach a level
> that would lead to new nuclear construction. Still, it is a sharp
> turnaround from the idea that nuclear power would be phased out
> almost entirely over the next 10 or 15 years.
> 
> The recovery is visible not only on the balance sheet but in
> improved operations. Vermont Yankee, for example, now shuts for
> refueling once every 18 months, and finished the job in 1999 in 34
> days. In the 1970's and 1980's, it would shut down every year, for
> 60 or 70 days. 
> 
> "We did it under budget, under dose and under days," said Joseph
> P. Cox, who schedules engineering work at the plant, meaning that
> money, radiation exposure and time are all carefully watched.
> 
> And 28 years into its lifetime, "we're hitting the top of our
> game," said Michael Balduzzi, vice president for operations.
> 
> In the early days, emergency shut- downs came every couple of
> months or so; now they are so infrequent plant managers remember
> each one, and every manual shutdown. The last shutdown was in
> August. Before that, Vermont Yankee ran 285 days uninterrupted. The
> run before that was 372 days, a plant record.
> 
> The result of more powerful plants running more days of the year
> is that a reduced number of reactors is producing more and more
> power; in 1999, the 103 reactors produced more power than the whole
> industry did in the early 1990's, when the number of plants peaked
> at 110.
> 
> The turnaround has stunned opponents, like Debbie Katz, who lives
> in Rowe, Mass., near the now closed Vermont Yankee plant. Vermont
> Yankee was one of the four Yankee reactors built by New England
> utilities, with overlapping ownership and some shared engineering
> services; she expected them all to close. The other three did. And
> she pointed out that in 1992, Shearson Lehman Brothers predicted
> that within 10 years, 25 reactors could face closing because they
> were not economically viable.
> 
> Ms. Katz now tours Vermont with a camper emblazoned with the
> words, "No Nukes," and painted with the propeller-shaped logo that
> is the international symbol of radiation. In a reference to
> AmerGen's British partner, the sign also has a silhouette of Paul
> Revere on his midnight ride of warning.
> 
> Like many nuclear opponents, she was counting on nuclear power to
> fail the economic test. But deregulation, combined with the recent
> electricity shortage, has given the industry new life instead.
> "These reactors they are selling would have closed," she said.
> Speaking of the wild price swings, she said, "This is such a
> destabilized situation, it's like being in the Wild West all over
> again."
> 
> Ms. Katz and others say the sales of old plants are putting the
> job of decommissioning   for which money has already been set aside
> into the hands of companies focused on profit, not safety; she
> likened it to an unscrupulous fortune-hunter marrying a rich widow
> and soon burying her cheaply.
> 
> Critics say the idea of a 60-year-old reactor makes them nervous.
> Vermont Yankee's shroud, a barrel- shaped structure around the fuel
> that directs the flow of water being boiled into steam, shows
> damage in places that were heated during welding. Metallurgists
> have diagnosed something called intergranular stress corrosion
> cracking, a process not understood when the part was made in the
> 1960's. They have added reinforcing rods around it.
> 
> But engineers, managers and operators insist that simple age is no
> barrier to performance.
> 
> "They have B-52's flying around that were flown by the pilots'
> grandfathers," said Michael G. Laporte, a work management
> supervisor here. A 20-year extension might make the same true for
> Vermont Yankee.
> 
> The owners have spent tens of millions of dollars modernizing and
> re-analyzing in order to address safety concerns. The control room
> is now full of digital readouts and a monitoring system that runs
> on Gateway personal computers, undreamed of in 1966, when work here
> began.
> 
> But Vermont Yankee and other plants still face problems, such as
> how to store the spent fuel, which is kept in a pool that will be
> full in 2008.
> 
> Immediate neighbors like the plant. "We've always been careful to
> watch it, but it is very, very well run, and a safe plant," said
> Patricia O'Donnell, who represents Vernon in the state House of
> Representatives and is also one of the five members of the Board of
> Selectmen, the town's executive body. Mrs. O'Donnell expressed her
> confidence from behind the counter at the clerk's office in town
> hall, a solid brick building that also houses a spacious library,
> less than a mile from the reactor that paid for it. The plant is 73
> percent of the local property tax base. It is comforting to many
> here that the goose that lays the golden eggs may not, in fact, be
> getting too old yet.
> 
> In Brattleboro, William L. Morse saw it a little differently. His
> brother- in-law has worked at Vermont Yankee, Mr. Morse said, and
> in general, nuclear power "doesn't bother me any." Mr. Morse is the
> proprietor of Earth's Treasures, which sells Native American arts
> and crafts to tourists, and the shop is adjacent to one gasoline
> station and across the street from another, probably more of a
> hazard than the reactor down the road, he said.
> 
> But pondering the idea of running it for 20 years beyond its
> 40-year license, he said that they "better have a big shutdown and
> go through it really carefully."
> 
> "You hear people say, `They closed those other plants down,' " he
> said. "Why run this one?" 

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