Nuclear Power Primed for Comeback

The loan guarantees have become a major battlefront. As the industry points out that current limits on the program make the guarantees meaningless, and higher amounts alarm budget officials, the Office of Management and Budget needs to calculate the risk of default to account for the cost of the guarantees. Based on past performance of nuclear plants, that cost might be awfully steep.

"From a myopic American point of view, it is not a good record," said Crane, NRG Energy's chief executive. "But the record is 20 or 30 years old. I don't know a business today that wants to be judged on what it was doing in the '70s." Even if every plant could get loan guarantees for 80 percent of its cost, Crane said, projects would each require more than $1 billion in equity. "That's a lot of money at risk," he said.

Industry executives say new technology makes better performance more likely. For example, to reduce the chance of an uncontrolled accident, Westinghouse's new nuclear plants use a passive design, rather than electronic or manual devices, for pumps that release cooling water in an emergency.

Nuclear reactor builders also say that they could cut costs and reduce licensing delays by using standard designs rather than tailoring plants to each customer. Four Westinghouse reactors are being built in China, which U.S. firms hope will resolve design difficulties. Plants built recently in Japan have been cheaper than those built in the United States 20 or 30 years ago.

Finland's experience, however, suggests that it remains difficult to build a nuclear plant on budget. The plant, the first of a kind designed by the French company Areva, is running two years behind schedule and $2.1 billion over budget. One problem is that concrete provided by an Indian firm included too much water, raising safety concerns among Finnish regulators. Constellation Energy is considering using this design.

"While it is a disappointment because it is over the original schedule, by the standards of U.S. plant construction in the 1980s, it is a world record," said Thomas A. Christopher, chief executive of Areva's U.S. subsidiary.

Another issue is bottlenecks. At least nine nuclear power plant components such as giant pressure vessels and steam generators can be made in only one place, a Japan Steel Works facility, according to nuclear consultants. Some parts have a six-year lead time, the Keystone Center report said.

Uncertainties about energy demand are another factor. The drop in U.S. license applications began before the Three Mile Island accident, to 1973, when energy demand fell. If new building codes, new light bulbs and more efficient appliances offset increasing population, economic output and bigger homes, power companies could be in the same position Duke Energy was when it wrote off more than $600 million that it spent on structures in Cherokee County.

The site here is a monument to that miscalculation. Near the containment building, a rusty old reactor head -- as big as the head of the Statue of Liberty -- lay in the dirt. Wrecking crews had started cutting it into 2-by-3-foot blocks, each weighing more than 1,500 pounds.

Rogers, the Duke Energy chief executive, said that when he toured the abandoned site, he got an "eerie feeling" that reminded him of the end of the film "Planet of the Apes." The lesson, he said, is: "If I build a nuclear plant, I want to walk hand in hand with regulators and consumers. I don't make big enough returns to take this risk on my own."

Polling director Jon Cohen contributed to this report.