By Jia Lynn Yang and Steven Mufson
Thursday, March 17, 2011; 11:01 AM
The 38-year-old Vermont Yankee plant, which state lawmakers say is well past its prime, has an operating license that is set to expire next year. Last Thursday, the Nuclear Regulatory Commission (NRC) agreed to add 20 more years to the life of the plant.
This is the state of nuclear energy in this country, where the average plant was built in 1980 and the cost of launching new reactors - and, industry executives say, safer ones - remains prohibitively high. The United States, which relies on nuclear power for 20 percent of its electricity, is leaning more heavily than ever on the first generation of plants built decades ago, even as critics worry that aging reactors have some dangerous weaknesses.
Aging plants are not necessarily failing plants. U.S. nuclear facilities have less down time than they did a decade or two ago.
But safety issues have come under scrutiny as workers in Japan try to fend off a nuclear meltdown at the Fukushima Daiichi plant, whose reactors were designed by General Electric in the 1960s. Over the years, some experts have pointed out flaws in two critical components unique to GE's design: the placement of spent fuel rods above the reactor and the strength of the reactor's containment vessel. These issues, some experts worry, could now be creating problems for the Japanese.
GE defends its model, calling the Boiling Water Reactor Mark 1 "the industry's workhorse." Out of 105 reactors in the United States, 23 are BWR Mark 1s. The two oldest - Oyster Creek in New Jersey and Nine Mile Point in New York - began operating in 1969. Utility companies running the reactors with the Mark 1 design insist that they are built to last and that many components have been replaced over the years.
The NRC has renewed licenses for 17 of these reactors and 62 altogether; it has rejected none. All reactors were originally granted 40-year licenses when they began operating, and the renewals are for 20 years.'Arbitrary' time frame
"There was nothing magic about the 40-year span," said Peter Bradford, a former NRC commissioner. "It wasn't as though somebody said, from an engineering standpoint, 'What's the year after which the plants will start to fall apart?' The 40 years was arbitrary to begin with."
Scott Burnell, a spokesman for the NRC, said that when Congress passed the Atomic Energy Act of 1954, which gave the commission authority to hand out licenses, lawmakers were less concerned with engineering than with blocking companies from developing monopolies in their markets.
The NRC said that regulators are constantly monitoring the plants and that a renewal does not give a reactor free rein to operate more loosely.
"If it's capable of running for 40, we can tack on 20 and then consider things from there," Burnell said.
The NRC said renewal hinges on how a plant affects its surrounding environment and on the condition of its aging equipment.
Sometimes it demands costly changes. Exelon has decided to close down the 42-year-old Oyster Creek nuclear plant after regulators requested that it install new cooling towers. The company also cited low electricity demand and the prospect of large capital expenditures. It will close the plant in 2019, 10 years before its license extension runs out.
After the Three Mile Island accident in 1979, regulators examined all reactors for their ability to withstand severe hydrogen gas leaks and required Mark 1 plant operators to add venting stacks to make the reactors safer in case of a severe accident.
Even when Washington gives the green light, state-level support is usually needed.
In Vermont, Entergy, the owner of the Vermont Yankee plant, has faced fierce opposition from state lawmakers and environmental groups as it seeks a license renewal. In February of last year, the Vermont Senate voted to stop the plant from operating past 2012, based on radioactive leaks and the collapse of a cooling tower in 2007.
Vermont Yankee provides one-third of the state's energy, but opponents of the plant argue that other energy sources are available nearby, including a Canadian utility.
The disagreement between the NRC and the state of Vermont over the license renewal could leave the plant in legal limbo. At any rate, the NRC has said that there will be delays in issuing the license for Vermont Yankee because its staff is busy helping Japanese officials.
Entergy, based in New Orleans, announced in November that it was considering putting Vermont Yankee up for sale.
"We continue to believe Vermont Yankee can continue providing the people of Vermont clean, safe, reliable power for another 20 years," said Michael Burns, an Entergy spokesman.Ripples from Japan
Japan's crisis is giving people pause far beyond Vermont, threatening efforts by utilities to build new facilities.
Just a week ago, Duke Energy was optimistic about getting the North Carolina legislature to approve a measure that would have sharply reduced the financial risks of its plan to build a nuclear plant in Lee, S.C. The measure would allow Duke to charge customers for building costs before completing the project.
But Tuesday, Duke chief executive James Rogers got a grilling from the North Carolina Utilities Commission, and the legislation was put on hold.
A similar bill in Indiana also hit a snag this week. A report in a Platts newsletter said that state Senate President David Long (R) urged his colleagues to "take a deep breath" and watch events in Japan before proceeding with the measure.
In Texas, a San Antonio municipal utility on Tuesday suspended talks with NRG Energy over a deal to purchase future electricity supplies from a proposed nuclear power plant in south Texas. NRG, considered a leading candidate for the next chunk of federal loan guarantees for nuclear plants, wants to expand its nuclear capacity at a facility about 90 miles southwest of Houston.
Last year, NRG signed a deal that made Tokyo Electric Power Co., owner of the stricken Japanese plants, a minority partner in the project. Tepco, burdened with costs at Fukushima Daiichi, could face difficulty following through on its pledge to invest as much as $280 million.
Just a month ago, President Obama proposed expanding the government's loan guarantee program from the $18.5 billion allocated in 2005 to $54.5 billion. Earlier he announced conditional approval for a loan to a Southern Co. plant in Georgia.
Even before the Japanese crisis, the much ballyhooed "nuclear renaissance" ran the danger of being stillborn. The discovery of economic ways to tap into vast reserves of natural gas locked in shale rock has lowered the price of natural gas.
Exelon, the nation's biggest nuclear utility, with 17 plants, estimates that new nuclear plants are more expensive than any other energy source except photovoltaic cells.
"Neither new nuclear, coal with carbon capture and sequestration, wind nor solar are economic," John Rowe, chief executive of Exelon, said in a speech last week. "They are not economic because of energy prices, an excess of generating capacity and very low load growth."
Aneesh Prabhu, an analyst at Standard & Poor's, estimates that natural gas would have to be more than 50 percent more expensive than it is today before building a new nuclear power plant would make clear economic sense.
The Japanese crisis just adds another degree of difficulty. A lot of utility executives are asking: If the United States isn't building new nuclear plants and is nervous about extending the life span old ones, how will the country generate enough electricity?
"Clearly costs are going to rise, and what we're focusing on is the licensing renewals for existing plants and costs for existing plants," said Steven J. Dreyer, managing director of U.S. utilities, power and project finance at Standard & Poor's. "This may be the final nail in the coffin for new nuclear development at least in the near term."