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[NOTE: This is an adaptation of an op-ed that ran in
the News & Observer and other papers in summer 2007]
Point of View
Will we pay, again, for nuclear folly?
Jim Warren
“The failure of the U.S. nuclear power program
ranks as the largest managerial disaster in business history, a disaster on
a monumental scale. The utility industry has already invested $125 billion
in nuclear power … only the blind, or the biased, can now think that most
of the money has been well spent.”
Forbes: Nuclear Follies, February 11, 1985
Despite a withering propaganda offensive depicting
nuclear power as carbon free and safer than ever, resuscitating the failed
technology would be a huge, unnecessary gamble for our climate, economy and
safety.
Fortunately, the odds are stacked against completion
of new U.S. plants. The question is, how much time and public money will
be wasted fighting them while we should be aggressively cutting greenhouse
gases?
The mismanagement reported by Forbes got worse after
1985. Overall, 60 plants were cancelled during construction; cost overruns
plagued the rest. Those most responsible were “the contractors and
subcontractors, the designers, engineers and construction managers who
[were] insulated by their own cost-plus contracts.”
Also culpable were “the utility executives, who
believed that no matter what happened to cost and construction schedules,
the rate commissions would somehow provide the revenues to bail them
out.”
In the Carolinas, Duke Power and CP&L (now Progress
Energy) cancelled nine nuclear plants underway, then billed customers over
$1 billion. In 1982 the legislature banned that scheme for “early
recovery” of Construction Work in Progress (CWIP).
Amazingly, state lawmakers just reversed that ban by
passing energy bill S-3, transferring the financial risk for new
multi-billion dollar nuclear and coal-fired plants back onto the
ratepayers. Legislators acquiesced to power company demands that a bill
promoting renewable energy must be saddled by measures allowing Duke and
Progress to charge customers in advance for costs – plus profit – of new
plants, even if they’re never completed.
**
Prudently, Progress recently backed away from last
year’s plan – and a billion-dollar subsidy – to lead a much-hyped US
nuclear revival. There is persistent doubt about whether anyone could
complete new reactors due to multiple failure scenarios, including
design-construction challenges; cash flow shortfalls; economic downturn
(e.g. weather disasters); accident or terrorist attack at any plant
worldwide.
If ever completed, costs would be staggering.
Progress’ Shearon Harris plant ran 12 times over budget: $4.3 billion in
1987 dollars. Of course, the industry shifts many costs of the
extraordinarily complex plants onto tax- and rate-payers, including design,
construction, fuel and waste subsidies – and risk insurance.
Duke CEO Jim Rogers told the NC Utilities Commission
in January that new nuclear plants are highly uncertain, and would cost at
least 40% more than current estimates. That excludes design changes needed
to protect control rooms, water intakes and waste pools from attacks.
The industry claims new designs would be cheaper, but
insists on billions in subsidies. Even so, Wall Street remains dubious
about cancellations, so the industry is persuading legislatures to allow
rate increases years before new plants even open. This paves the way for
more “cost plus” gravy trains with few constraints on expenditures.
Adding to the gamble is nuclear’s unreliability. Over
two-dozen US plants were shuttered early due to safety problems. Fifty-one
more have suffered year-long outages needed to restore minimum safety
levels. Federal regulators presently allow many including Harris to
operate for years in violation of safety regulations. The absence of
another severe accident since the 1980s is not an adequate basis by which
to judge the industry’s safety record – and potential for economic
disaster.
Nuclear plants are increasingly unreliable in our
warming climate, as experienced widely during Europe’s recent heat waves.
Progress’ Brunswick plant suffered extended outages during peak demand the
past two summers. Increasing droughts further enhance the gamble because
typical US reactors compete with municipal demands for surface waters, each
withdrawing more than cities the size of Greensboro.
The biggest failure scenario stems from the urgent
nature of global warming, and the growing public demand for genuine climate
solutions such as energy efficiency. Gradually, it’s becoming clear that
building coal and nuclear plants is a ruinous approach to global warming.
Even to the extent that nuclear energy produces less emissions than coal,
we don’t have the decades nor trillions of dollars to build the 3,000
plants required, according to the Council on Foreign Relations, just to
hold atmospheric carbon at year 2000 levels.
**
Even if new nuclear weren’t such a multi-faceted
gamble, why should the public assume the industry’s risk? The power
companies are ensured a 12% rate of return by the People of North Carolina,
largely intended to cover business risk. Because utilities can now make
customers pay for plants not yet operational, the guaranteed return should
be slashed.
Duke and Progress have again used their big campaign
money and backroom deals – this time to buy state leaders’ blessing for
this gigantic and ill-timed giveaway (see www.ncwarn.org). North
Carolinians must demand that our legislature represent the public. |
