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
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
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
"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
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.
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
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
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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