Patching Nuclear Power
 J.A. Savage, Albion Monitor
 September 25, 2000

 In a hushed quest to allow an expected 85 percent of the nation's nuclear
 reactors to live beyond mandatory retirement, the nuclear industry talked
 the federal government into allowing a generic 20-year extension on the
 life of reactors. The public only has until October 16 to let the Nuclear
 Regulatory Commission (NRC) know what it thinks of the government's plan
 to allow license renewal instead of decommissioning.


 According to the NRC, the only public meeting on the re-licensing plan has
 been held at its Maryland headquarters. The government's process
 effectively shuts out any public input on extending plant licenses, said
 Public Citizen senior policy analyst Jim Riccio. "Most of the public is
 not aware of the issues until they land in their laps, by way of their
 local nuclear plant."


 Here's where the "generic" part of re-licensing comes in. Instead of
 having an "in my backyard" approach for concerned citizens, the generic
 license extension puts the onus in a generic somewhere-else land. "By
 making something generic, they don't have to deal with the public," Riccio
 added.


 What few nuclear critics are hip to the industry/government move, are
 focusing on safety issues. "During the early stage of life and the late
 stage, the failure rate for both man and machines is generally higher than
 during middle age; the reliability of both man and machines is generally> lower during the early and late stages. The prudent and proper course of
 action is to retire aging nuclear plants before they reach the point where
 reliability drops off markedly," notes Dave Lochbaum, Union of Concerned
 Scientists' nuclear safety engineer. The nuclear industry claims it
 deserves generic safety rules for re-licensing because its safety track
 record has only gotten better over the years, now that its reactors are in
 middle age.


 In a fortunate acronym for nuclear critics, the generic re-licensing
 program is called "GALL"- -for Nuclear Power Plant Generic Aging Lessons
 Learned. The "generic" part appears most important to both industry and
 government.


 "Aging is the same no matter if the [reactor] maker is GE, Westinghouse or
 Combustion Engineering," said Electric Power Research Institute manager of
 life-cycle management, John Carey, who added that the weather surrounding
 a particular reactor is the only difference.


 Long known as an aging problem is the brittleness of the metal enclosing
 the reactor core. The reactor gets bombarded with electrons for years and
 the metal becomes brittle. EPRI, for one, believes that brittleness is not
 a problem. "Many plants even at 60 years won't reach that [threshold]
 level of embrittlement. There's probably none that will at 40," said
 Carey.


 While most of the government's and critics' attention is focused on
 reactor safety during aging, the industry's impetus admittedly has to do
 with short-term financial gains that come with a second license and the
 value added to a plant for resale.


 "In a deregulated, competitive business, a fully depreciated nuclear plant
 (beyond its original 40-year license) is a tremendous asset. It can sell
 its power at marginal cost, which is very competitive. Such a plant would
 have significant profit potential," notes the industry group Nuclear
 Energy Institute. In other words, once ratepayers have paid off the
 construction investment, the primary expense of nuclear plants disappears
 and the only ongoing costs to owners are fuel, safety expenditures and
 staffing. Less tangible opportunity costs like guaranteed ecological
 preservation are not a part of the calculations.



 The NRC's attempt at generic guidelines for license renewal had been
 sitting around in various stages since the early 1990s. It was goosed into
 action, though, when Baltimore Gas & Electric's (Constellation) Calvert
 Cliffs became the first facility to ask for a 20-year extension. Calvert
 Cliffs (in the NRC's back yard) was approved this March. Duke's Oconee
 plant in North Carolina followed suit in May.


 License renewal does not come without a price, however, as keeping that
 license means an owner has to invest in anti-aging technology - a.k.a.
 capital investments.


 Like plastic surgery fixes the fissures and sags in an aging body, keeping
 a past-prime nuke in shape "depends on how much money you have," Carey.

 For instance, replacing a steam generator, a typical aging problem, costs
 about $150 million. Shareholders might be loath to invest that kind of
 capital in an old plant. But, the beauty of re-licensing is that any such
 investment can be amortized over an extra 20 years, even if the plant
 owners do not plan to run the plant that long. Thus, license renewal tucks
 in the short-term operating costs of nuclear plants.


 Public Citizen's Riccio, says that the 20 year extension "shifts the risk
 of future operation from the stockholder to the ratepayer." Riccio
 believes that the specter of early shutdowns with their attendant stranded
 asset risk is driving re-licensing. Fitch ICBA analyst Ellen Lapson
 explained the early shutdown scenario, "Towards the end of the life of a
 plant, if there's no re-licensing then there's less reason to invest
 capital."


 Using the medical metaphor again, that means there's a choice between
 euthanasia (decommissioning) because the patient is too expensive to keep
 up and take the risk of having to pay all those exorbitant hospital bills,
 or pump more money into the patient--say an aging pop singer, a la Diana
 Ross--in the expectation the survival will allow payback when the star
 makes a comeback tour.


 A 20-year extension also "enhances the value of the plant if [owners]
 decide to get out of the business," said Bob Wood, NRC senior licensing
 financial policy advisor. He added that no owner had confessed that intent
 directly.


 But the industry's unstated intent appears known to the NRC. "GenCos are
 snatching up economically uncompetitive facilities," noted Christopher
 Grimes, NRC chief of license renewal and standardization.


 But economics can also kill a re-license. Yankee Rowe, a poster-child
 nuclear facility, scrapped its plans to live beyond middle age because it
 would have cost too much money just to prove to the NRC that it could do
 the repairs needed for re-licensing. EPRI's Carey blamed it on the small
 size of the plant and the economics of energy in New England.



 The other economic benefit to plant owners is that when a plant gets a
 20-year life extension, payments into its decommissioning fund also gets
 drawn out another 20 years, allowing another decrease in short-term
 operating expenses, noted Fitch's Lapson.


 Like a boomer turning 40, the limit for what constitutes old-age in a nuke
 was "arbitrary," said the NRC's Grimes.


 "In the Atomic Energy Act of 1956, everybody said 40 years ought to be
 enough," said Grimes, adding that the arbitrary number was based on
 financing available to owners. "We looked into what might be life-limiting
 aging effects. In 1991 the first rule was issued on aging effects. It
 concluded Mother Nature doesn't care how long the NRC's license term is."

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 162 Cambridge St., Syracuse, NY 13210
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