Deregulation and Nuclear Power


Deregulation of the U.S. electricity
industry is moving forward quickly, quietly, and with little
public debate about its potential dangers—including the
increased risk of a nuclear power plant accident.

California regulators voted May 6 to
speed up the pace of deregulation in that state by allowing
some customers to pick their electricity providers beginning
in January 1998. New Hampshire has experimented with customer
choice, and several other states, including Illinois,
Massachusetts, and New York are poised to begin deregulation
of their electricity markets in the next few years. Congress
is considering a bill that would mandate electricity
competition nationwide by the end of 2000.

In the rush to position themselves
for competition, utilities are squeezing the most power
possible from their aging nuclear plants—running them
for broke, with minimal investment of capital. The Nuclear
Regulatory Commission, long criticized for its cozy
relationship with the industry, is growing jittery about the
safety ramifications of deregulation, but seems unwilling, or
unable, to force utilities to permanently shut down severely
deteriorated plants.

NRC Executive Director for
Operations Joseph Callan said his chief public safety concern
is that utilities struggling to survive in the competitive
marketplace may no longer have "the commitment" to
voluntarily disclose safety problems at their nuclear plants.
"The financial risk is substantial, because they may
identify issues that are costly to remedy," he said in
an interview April 16. "I worry about our inspection
approaches being robust enough to identify declining
regulatory safety performance…We can’t do it all. We
don’t have the resources, and we have to rely on the
industry to continue to do that—I hope it

Callan has good reason to worry: 45
of the nation’s 109 nuclear plants were licensed between
1962 and 1974, and have been running for more than 23 years.
Many of these relics of the Atomic Age are literally cracking
apart—long before their 40-year licenses are set to
expire. Unexpected cracking has been found in vital internal
components of 17 boiling water reactors (BWRs) around the
country. Cracks are also widespread in the steam generator
tubes of dozens of pressurized water reactors (PWRs). The
NRC’s schizophrenic response has been to issue stern
warnings about the significant safety threat these cracking
problems pose, while at the same time continuing to support
industry data that invariably "demonstrate"
it’s safe to keep the plants running.

In a recent test of NRC’s
resolve to protect the public at the expense of nuclear
utility profits, the agency on May 8 approved a request by
Niagara Mohawk Corp. to bring the Nine Mile Point plant in
Scriba, NY back on line, despite two large cracks in the
reactor "core shroud." The shroud is a massive,
stainless steel cylinder which surrounds the reactor core and
directs the flow of cooling water. It plays a crucial role in
keeping core components aligned, which in turn ensures that
in the event of an emergency "control rods" would
insert into the core and stop the chain reaction.

Niagara Mohawk discovered long, deep
cracks in two 90-inch vertical welds in the shroud during
inspections in March when Nine Mile Point was being refueled.
Responding to the worries of residents near the plant, Rep.
John McHugh (D-NY) wrote to NRC Chair Shirley Jackson on
April 10, seeking her assurance that government would not
allow the 28-year-old plant to restart "until there is
absolutely no question" it is safe to operate. McHugh
also asked her to explain why the NRC had not brought in an
independent group to evaluate pertinent safety data, rather
than allowing the company which owns the plant to perform the

To allay public fears, the NRC held
a meeting on April 14 in Fulton, NY, at which Niagara Mohawk
officials argued that it’s perfectly safe to run the
plant for another 10,600 hours, or about 14 and one-half
months, without fixing the cracks. General Electric provided
this time estimate, based on the presumed growth rate of the
cracks. GE built all of the nation’s BWRs and has
contracts with nuclear utilities to service them.

"You can be sure that the plant
will not restart until the NRC is satisfied that there will
be no undue risk to the health and safety of the public in
the Oswego area,’’ Jackson replied to McHugh in a
May 1 letter. To his question about the troubling lack of an
independent technical review of the cracks in the reactor,
she responded that Niagara Mohawk had "engaged several
consultants and vendors"—namely, GE and other
companies with a vested interest in the plant’s
continued operation.

William Davis, Niagara Mohawk’s
chief executive officer, acknowledged that financial
considerations played a role in the utility’s decision
to seek permission to run the plant for an additional 14
months without repairing the cracks. Davis told reporters at
a news conference before a shareholders meeting on May 6 that
if the NRC were to reject its proposal, the company would be
forced to "take another look at" the economics of
restarting Nine Mile Point, according to an article in the
Syracuse Newspapers Online.

The NRC authorized Nine Mile Point
to run for 14 months as long as the utility changes its
license to meet industry-endorsed water purity standards.
That minor condition was apparently meant to satisfy an
objection raised by David Lochbaum, a nuclear safety engineer
with the Union of Concerned Scientists. After studying the
portion of GE’s report available to the public, Lochbaum
found that GE’s conclusion about how long the plant
could safely run assumed more stringent water purity limits
than Niagara Mohawk’s operating license permits.
Impurities in the water are thought to speed the growth rate
of cracks in nuclear reactors.

Paul Gunter, head of the Washington,
DC-based Nuclear Information & Resource Service reactor
watchdog program, believes the shroud cracks represent an
unacceptable safety risk to Oswego County residents, but he
was not surprised by NRC’s decision. "Historically,
the NRC has always put industry economics ahead of public
safety," he said.

"The era of deregulation is the
most dangerous time we’ve seen, in terms of the
possibility for a nuclear accident, because utilities are
going to be cutting back on the amount of maintenance
they’re putting into the plants to stretch out their
last dollar, and that erodes the safety margins," Gunter

Under the system of regulated
monopolies, utilities could spend as much as they wanted to
beef up staffing, install safety systems, and repair
equipment at generating stations. As long as the state public
utilities commission judged a proposed investment prudent,
the cost would be passed along to customers in their electric
bills. Now, as nuclear utilities scramble to position
themselves for deregulation, they are simultaneously
downsizing and setting stiff production goals. Because their
large nuclear plants are valuable when they’re cranking
out power, utilities are developing sophisticated practices
to extend run times and shorten maintenance outages.

Nuclear plants currently provide
more than 20 percent of the nation’s electricity, but in
many regions—particularly the Northeast and
Midwest—it costs more per kilowatt-hour to produce than
power from competing forms of generation, such as natural
gas. The need for an expensive repair job can tip a
company’s balance sheets in favor of a decision to
mothball a nuclear plant, as recently happened at
Chicago-based Commonwealth Edison.

On April 17, ComEd, the largest
electric utility in Illinois, said it will not spend $400
million to replace the steam generators at the Zion nuclear
plant. Without that investment, ComEd Chair James
O’Connor conceded the company will have to shut Zion by
2005—eight years before its license expires. "In
today’s increasingly competitive marketplace, it is not
prudent to proceed with this costly replacement which may not
be in the best interests of our customers and our
shareholders," O’Connor said in a news release.

Zion, a Westinghouse plant located
40 miles north of Chicago, has been running for 24 years.
ComEd Vice President Mike Wallace said that about 9 percent
of the plant’s steam generator tubes are cracked and
have been "plugged," or taken out of service.
Unless the NRC allows the utility to run it with up to 24
percent of the tubes plugged—the current regulatory
limit is set at 15 percent—Wallace admitted the plant
will have to close permanently well before 2005.

On April 10, GPU Nuclear Corp.,
owner of the Three Mile Island station, said it will ask the
New Jersey Board of Public Utilities for permission to sell
or shut down the Oyster Creek plant by 2000. Utility
officials said the cost of electricity generated at the plant
in Toms River, NJ, is about 1.5 cents per kilowatt-hour more
than the going market price. Oyster Creek began operating in
1969 and is licensed by the NRC to run until 2009.

A study by the Washington
International Energy Group released in February predicts that
37 plants, representing 40 percent of the nation’s
nuclear capacity, will likely shut down within the next seven
years because their production costs are higher than
projected electricity prices in their markets. Nine Mile
Point, Zion and Oyster Creek were among the plants named.
Other economists have predicted that anywhere from 10 to 40
plants will close in the near future.

Critics have charged for years that
nuclear power plants are uneconomic to run, as well as
dangerous and environmentally unsound, because they generate
so much long-lived, high-level radioactive waste. With a
sizable portion of nuclear plants facing premature closure in
the near future, one would expect to hear loud cheers from
antinuclear activists. Instead, many are expressing grave
concerns that the industry’s twilight years pose the
greatest threat of a catastrophic accident since the
pre-Three Mile Island era.

James Riccio, an attorney with Ralph
Nader’s Public Citizen in Atlanta, says the NRC must
move quickly to develop criteria for permanently shutting
down uneconomic nuclear plants. "They keep allowing
these decrepit plants to go one more cycle, one more
cycle…If they’re not going to go in and repair these
plants, the NRC should force them to shut down
immediately," he insists. Some countries re-license
their nuclear power plants periodically, but the U.S.
government—perhaps optimistically—issued 40-year
licenses to all commerical nuclear plants.

Riccio contends the
NRC’s "evaluation" that Nine Mile Point is
safe to run is "nothing more than a gamble the core
shroud will hold" for another 14 months. It’s only
a matter of time before the agency gambles wrong.