Copyright 1999 Federal News Service, Inc.
Federal News Service
FEBRUARY 10, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
2374 words
HEADLINE: PREPARED STATEMENT OF
RICHARD
A. ABDOO
CHAIRMAN AND CEO
WISCONSIN ELECTRIC POWER COMPANY
BEFORE
THE HOUSE COMMERCE COMMITTEE
SUBCOMMITTEE ON ENERGY AND
POWER
BODY:
Mr. Chairman and Members of the
Subcommittee:
Thank you for the opportunity to appear before you today to
present Wisconsin Electric Power Company's views on H.R 45, amendments to the
Nuclear Waste Policy Act of 1982. My essential message to you today is to
encourage you to speed passage of this legislation but also to draw your
attention to the need for short-term action on the nuclear waste issue.
Addressing this problem is key to keeping the Nation's, including my company's,
nuclear plants operating, which in turn is key to the continued reliability of
our electric supply, and our ability to achieve air quality standards, including
meaningful greenhouse gas reductions. The challenge is that there may be a gap
in time between the point when existing on-site storage of spent nuclear fuel is
filled to capacity, and the time spelled out in H.R. 45 when interim storage or
a permanent repository would be ready to accept shipment of fuel. I ask that you
consider options that could be added to H.R. 45 that could fill this gap. H.R.
45 Should Be Enacted As Soon As Possible
If there is any major problem with
this legislation it is that it should have been enacted years ago. H.R. 45 is a
good bill. H.R. 1270 from 1997 was a better bill. H.R. 1020 from 1995 was the
best bill -- because it would have addressed this problem four years ago.
Unfortunately, due to the Nation's delay in addressing this issue I have a
growing concern that even the streamlined approach articulated in H.R. 45 may
not provide relief in time to avoid shutdown of certain nuclear power plants.
And while I'm speaking today from my own company's perspective, you should be
aware that given the acceptance date, the acceptance rate, and the likely
acceptance schedule based on DOE's "Acceptance Priority Ranking" report, there
are a growing number of nuclear power plants that may be forced into premature
shutdown if we do not find a solution to the nuclear waste issue soon.
My
company operates 1000MWe of generation in two units at its Point Beach Power
Plant. This plant has had one of the industry's best performance records for
over 25 years. In the last three years we have undergone intense scrutiny by the
Nuclear Regulatory Commission, invested hundreds of millions of dollars to bring
our facility up to new standards, and emerged with renewed confidence in our
ability to operate this facility safely and economically. Our licenses run to
2010 and 2013 respectively. Yet, we are threatened with premature shutdown.
If legislation would have been enacted four years ago Wisconsin Electric
would not be confronted with this critical situation. As I mentioned earlier,
according to the "Acceptance Priority Ranking" report and the timetable in
section 508 of H.R. 45, Point Beach is scheduled to begin shipment of fuel to an
interim facility in the first year of acceptance, 2003, as well as in the nine
subsequent years of acceptance. But even this date, 2003, is not guaranteed by
this proposal. Section 508 of H.R. 45 would allow the Department of Energy to
stretch acceptance of spent fuel over a five year period starting in 2003 which
means that all waste could be refused from 2003 to 2007 as long as the full five
year amount were accepted in 2008. In contrast, Point Beach will exhaust
approved on-site storage of spent fuel at the Point Beach Power Plant by the
year 2004, four years before there is an absolute date for acceptance of fuel
under H.R. 45.
The Department is over a year late in initiating its
responsibility for removing spent nuclear fuel from commercial nuclear utilities
as required by the Nuclear Waste Policy Act (NWPA) of 1982 and by its contract
with each nuclear utility. Under that contract, my customers have paid and
continue to pay the federal government to take title, remove and permanently
manage spent nuclear fuel generated from my plants. Utility consumers nationally
have paid $15 billion to DOE; Wisconsin Electric consumers alone have paid more
than $208 million. And after 17 years, DOE is arguably no closer to accepting
fuel than it was in 1982.
Wisconsin Electric Background
The Wisconsin
Electric Power Company is an electric and gas investor- owned utility
headquartered in Milwaukee, Wisconsin serving 1.4 million customers with annual
revenues of $1.8 billion. Wisconsin Electric produces, delivers and sells
electric energy in an area of about 12,000 square miles in the southeastern,
east central and northern portions of Wisconsin, and the Upper Peninsula of
Michigan. The total area's population is about 2.3 million, which includes
metropolitan Milwaukee. Peak electric demand is about 5,500 megawatts. In
addition to Point Beach Power Plant which supplies about 25 percent of electric
demand, we have six coal.plants which supply two thirds of our demand and the
rest is supplied by hydroelectric, natural gas, oil, and purchased power.Point
Beach is a Westinghouse plant with two units of 500 megawatts each. Unit 1 began
operation in 1970, unit 2 in 1972. Unit 1 's license will expire in 2010 and
unit 2's in 2013. About a quarter of the 121 fuel assemblies are replaced
annually. Each fuel assembly contains 179 rods. In 1995, Point Beach began
loading spent fuel into dry casks on the plant property. The Public Service
Commission of Wisconsin authorized us to load up to 12 which, combined with our
spent fuel pool, provides enough storage for operation of the plant through
2004.
The legal history of spent fuel at Point Beach has put us in a unique
position within the industry. Wisconsin Electric was not part of an original
lawsuit against the Department of Energy seeking to enforce the federal
government's obligation (under the Nuclear Waste Policy Act of 1982) to begin
removing spent nuclear fuel from investor owned utilities by January 31, 1998.
But, we became a joint petitioner when DOE failed to meet the January 31, 1998
acceptance date and did not provide an adequate remedy. Subsequently, the
District of Columbia Circuit Court of Appeals declined to directly order DOE to
take spent fuel, suggesting that utilities pursue remedies under the contract.
At that point,Wisconsin Electric did not join with other investor-owned
utilities in continued litigation and instead is trying to pursue a path of
negotiation with DOE in the hopes of crafting an administrative solution under
terms of the contract with the Department. So far, our efforts have not been
successful.The Threat to Reliability and the Environment
Point Beach is a
vital part of the electricity supply in the upper Midwest, and the key to
keeping Point Beach on line is storage of spent fuel. If we cannot expand
on-site storage and are unable to ship waste to an appropriate site then we must
shut down our plant by 2004. Shutting down 1000 MWe of generating capacity will
strain the reliability of our system since Point Beach supplies approximately 25
percent of the power used by our customers. And beyond the Wisconsin Electric
system, any significant reduction in electric generation capacity will
exacerbate an already tight supply situation in our region of the country. As
you know, the Midwest has experienced two consecutive summers of reliability
concerns.
Because Point Beach does not emit any greenhouse gases or other
atmospheric emissions, its premature shutdown would also be a significant blow
to efforts to improve air quality. If we were forced to shut down Point Beach we
would likely replace the capacity with a clean power source, such as combined
cycle natural gas. The increased greenhouse gas emissions alone would be very
significant.
Substituting this natural gas capacity for Point Beach
would increase carbon dioxide emissions by 3.5 million tons per year in addition
to increased nitrogen oxide and other atmospheric emissions!
My company's
ability to commit to meaningful greenhouse gas reductions hinges upon continued
operation of these emission free facilities in Wisconsin. While I recognize the.
controversy surrounding policy proposals to address potential global climate
change, Wisconsin Electric is committed to addressing the global warming issue.
Wisconsin Electric was one of the first investor owned utilities to establish in
a developing nation a tree planting program for carbon sequestration, and one of
the first to retrofit an aging coal plant with new natural gas technology as a
means of reducing carbon emissions. These two international programs comprised
two of the seven original projects of the United States Initiative on Joint
Implementation Program. Wisconsin Electric has the largest green pricing program
of its kind in the country which offers customers a choice in choosing green
energy alternatives. I have participated in the Vice President's climate change
consultation meetings although I hasten to point out that Wisconsin Electric
does not believe that the Kyoto Protocol is the best approach to a global
climate change policy. But, as I noted earlier, the ability of Wisconsin
Electric to commit to any meaningful greenhouse gas reductions is fatally
undercut if we are forced to shut down Point Beach prematurely.
Contingency
Planning
We are exploring all reasonable options to keep the Point Beach
plant operating by obtaining sufficient storage capacity for the spent nuclear
fuel, and we are in a situation where we must explore all options in the hopes
that one of them will succeed. This legislation is obviously a key part of our
goal to keep the plant operating. Under this bill, the Federal government would
be ready to accept spent fuel in June 30, 2003. On that date, shipments would
begin according to the schedule in section 508 of H.R. 45. But, we can not
absolutely rely on this date. In addition to the five-year stretching concern I
expressed earlier, my confidence in DOE's ability to meet this schedule is not
high. DOE was obligated to begin taking spent fuel in 1998 and had 17 years and
$15 billion to prepare. It is common knowledge that DOE failed to meet this
schedule.
Even with this date and shipment schedule mandated in H.R. 45,
Wisconsin Electric may still have to expand on-site storage in order to have
enough space to keep the plant running, and we are exploring all other potential
options. We plan to initiate a proceeding with the state of Wisconsin to seek
approval for additional dry casks for storage of spent fuel. But, such requests
put tremendous pressure on state and local officials -- the last request led to
more than three years of legal proceedings - and in any case nuclear waste is a
Federal problem. We are negotiating with the Department of Energy to resolve our
contract dispute in a way that will allow us to expand storage or ship spent
fuel. We are monitoring and assessing private storage options. We are putting
every effort into making one of these options work for us. Under any one of
these options everything must occur on time and according to plan in order for
us to be able to operate until the June 30, 2003 acceptance date in the bill.
However, if none of these options succeed, if there is any slippage in the
2003 date, if we do not get a positive response from the state, or if the
Department of Energy exercises its ability under section 508 of this bill to
amend the acceptance schedule, then we may be forced to shut down Point Beach.
And other utilities that are in a similar situation may be forced to take
similar action. This is why I think you should consider measures that could fill
a gap between the time that plants run out of space and when the Federal
Government actually accepts our spent fuel. Given the history of this program I
think it is only prudent to consider measures for dealing with the waste problem
should another Federal mandate to accept nuclear waste not be achieved precisely
on schedule.
I greatly appreciate the prompt attention that the U.S. House
of Representatives has repeatedly given to the nuclear waste issue and that you
are giving today. However, as a utility executive I must constantly prepare
contingency plans in order to keep the lights on and I do not have enough
confidence to tell my customers and state regulators that the Federal government
is definitely going to deal with the nuclear waste problem this year. If it
appears there will be no solution and we will have to shut down Point Beach, I
must begin preparations soon to plan for replacement power.
While I must
make contingency plans, I also urge you to consider adding measures to this bill
that could form a national contingency plan should we need one. These steps
could include clarifying authority for the Department of Energy to provide
additional on-site storage or providing authority to DOE to ship spent fuel to
off-site storage facilities. For those plants facing imminent shutdown, another
step could be to create a system by which nuclear utilities could trade
positions in the shipment queue so that plants that are necessary for
reliability reasons might be able to trade places with plants that higher up in
the queue.
Conclusion
Mr. Chairman, I do not want my remarks here to
detract from the desireability of H.R. 45
- it's a good bill and I support
it. Nor do I want to suggest that a long-term storage solution is not critical -
I believe it is. I am heartened by the progress in the viability assessment of
Yucca Mountain and am pleased that the assessment "reveals no
showstoppers." I am here as a utility executive in the unenviable position of
being perhaps the first in line to have a safe, efficient, and fully operational
nuclear plant shut down for the lack of a storage solution. H.R. 45, as good as
it is, needs something more to provide me the assurance I need that my plant can
continue to operate after 2004. This plant is crucial to my being able to supply
energy reliably to my customers, and do my part for reliability in my region.
This plant is a key element in any commitment I can make to reduce greenhouse
gas emissions in a meaningful way. So, today I ask your consideration for adding
to H.R. 45 measures that can bridge the gap between when the DOE interim storage
facility actually accepts my spent fuel and when my storage options are
exhausted. Thank you.
END
LOAD-DATE: February
11, 1999 
