[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?
“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.