CounterVortex

Here’s a rather perverse irony. Amid all the war hysteria over Iran‘s nuclear ambitions, a US utility has ordered a new nuclear plant for the first time since the 1979 Three Mile Island accident. Of course this time they are promising that “innovations” will avoid the cost overruns that plagued the industry in its last big thrust of development in the ’70s. (They are not even particularly talking about the health and safety concerns, alarmingly.) But note that this time it is a utility in New Jersey which wants to build the reactors in Texas—a fruit of the deregulation regime imposed in the last 20 years, which effectively bars utilities from generating electricity for local consumption. As we argued after the 2006 Queens blackout, this new regime exaggerates the dangers of the system by eroding public accountability. And with all the horrors in the headlines these days, this summer’s radiation leak at a commercial reactor in Niigata, Japan, barely registered a blip—although reporter Matthew Wald does, to his credit, at least work in a parenthetical reference to the Niigata accident in this New York Times account, Sept. 25:

Approval Is Sought for Reactors
WASHINGTON — In a bid to take the lead in the race to revive the nuclear power industry, an energy company will ask the federal Nuclear Regulatory Commission on Tuesday for permission to build two reactors in Texas.

It is the first time since the 1970s and the accident at Three Mile Island that an American power company has sought permission to start work on a new reactor to add to the existing array of operable reactors, which now number 104.

The company, NRG Energy, based in Princeton, N.J., wants to be the first to pour concrete in the main section of the plant, allowing it to qualify for the maximum federal benefits, David Crane, its chief executive, said in a telephone interview.

NRG is applying under a new process intended to avoid the extensive delays and cost overruns in the last round of nuclear construction. In the 1970s and ’80s, more than 100 of the reactor projects were canceled, some abandoned in late stages of construction, mostly because they no longer made financial sense.

Revived interest in nuclear power, experts say, is being driven by a combination of strong growth in electric demand, high prices for natural gas and the potential for imposing higher costs on climate-changing carbon dioxide emissions, which would make coal use more expensive.

Some people anticipate that reactors will be made profitable by a tax on carbon dioxide emissions, but Mr. Crane said that was not needed. More important, he said, were “robust prices” for natural gas, the fuel for most of the plants built in the last few years.

Three other companies are likely to apply for licenses by the end of the year, according to industry experts. One of those, Constellation Energy, like NRG, has also ordered parts for its plant, planned for Calvert County, Md., and says it believes it has an advantage because its reactor will be precisely modeled on one now under construction in France.

But Mr. Crane of NRG hopes to beat Constellation to the punch.

“By filing first, we’ll be able to maintain or increase or lead in the N.R.C. process,” he said. “It’s akin to being in a one-mile race and we’re ahead after the first lap.”

In August, NRG announced that it had selected Toshiba to lead construction of the two-unit reactor designed by General Electric, to be built at a site 90 miles southwest of Houston. (It is still negotiating to use the G.E. design.) The project has an estimated cost of $6 billion to $7 billion.

Under the Energy Policy Act of 2005, the first two reactors qualify for $500 million in “standby support,” or insurance against regulatory delay; the next four units are eligible for $250 million each.

Mr. Crane said the federal help would be important to persuading investors to lend money. NRG is an independent power producer which builds plants and earns back their cost by selling power on the grid, not by charging regulated customers for investment in a rate base.

The last time the commission gave permission for work to begin on a nuclear reactor was shortly before the Three Mile Island accident in March 1979. In January that year, the Long Island Lighting Company won approval for two reactors it wanted to build at Jamesport. The plants were not built and the company itself no longer exists, having been mortally wounded by its effort to build another reactor, Shoreham.

NRG is planning to build the Advanced Boiling Water Reactor, which represents a relatively low-risk choice in an industry where few American companies have current experience with building a plant. American utilities have expressed strong interest in new designs by G.E. and two other companies — Westinghouse, now a subsidiary of Toshiba, and Areva, a French-German consortium. Of those, the boiling water reactor is the only design that is actually operating.

Four are operational in Japan (although two are at a complex struck by an earthquake last month and are shut for the time being) and two are in advanced construction in Taiwan. The N.R.C. approved a version of the plant in 1997, though that design differs somewhat from the plants now operating in Asia, according to experts.

The new design has several innovations that are aimed at sharply reducing the risk of meltdown, a risk that is described by the industry and by regulators as very low in any case. Other innovations are supposed to reduce the time and cost of construction.

Nuclear power enjoys strong support in the spot where NRG would like to build, a sparsely populated zone near Bay City, Texas. But Texas activists are already promising to oppose the plant as uneconomic.

The plant is being built as a merchant generator and, in theory, the risk of cost overrun in construction, or poor operation or any other problem, is at the risk of the builder. But Tom Smith, an energy expert with Public Citizen, said that the four reactors already running in Texas had costs six to 12 times the original estimate, and that expensive plants on the system were sure to push up the price of electricity.

Texas is mostly isolated from the rest of North America, in electricity terms. In that market, an independent system operator conducts a daily auction for power, and all producers are paid at the price of the highest bid accepted. Mr. Smith said that producers would figure out how to make that last bid one from an overpriced nuclear plant.

If NRG can finance the plant, it may find the approvals substantially easier than they were for regulated utilities in the last round of nuclear construction, when companies generally had to show their projects were in the public interest.

“We’re highly confident we get a much more robust commercial commitment out of Toshiba, to build the thing on time and on budget,” Mr. Crane said. The reactors are supposed to come on line in 2014 and 2015.

The next hurdle for NRG, in about 60 days, is for the regulatory commission to determine that the application is substantially complete, and accept it for processing.

By filing early, companies are likely to get first consideration from the agency. Not having seen an application in a generation, the commission has been staffing up for the task but has warned that its capacity to deal with the work involved is not unlimited.

Establishing just how long the nuclear dry spell has persisted is a matter of definition. The last plant ordered was in 1978, but all of those ordered after the fall of 1973 were canceled. The last plant to begin operation was in 1996, but that one, Watts Bar, had been mothballed for more than a decade by the Tennessee Valley Authority before it began operations.

The application Tuesday is for a new kind of license, a “combined operating license.”

Under its streamlined procedures, the commission has already approved several sites and designs, but this is the first time a power company has sought permission to build.

See our last posts on the US nuclear industry and global nuclear fear.