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 continues."

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 task.

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 warned.

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.