10-07-2000

LOBBYING: A Bush Bounce for Nuclear Power

In late September, George W. Bush had some good news and some bad news for
the nuclear power industry. In his high-profile national energy blueprint,
Republican presidential candidate Bush gave nuclear power a much needed
vote of confidence. Bush stated that nuclear power will play an essential
role in the nation's energy future. He also promised $1 billion over 10
years to streamline government regulations that impede the use of nuclear
power. Democrat Al Gore, meanwhile, never mentioned nuclear in his energy
plan.


On the downside, however, Bush joined Gore in opposing construction of a
temporary nuclear-waste storage site at Nevada's Yucca Mountain. Utility
industry officials have urged the Energy Department to build a temporary
site to store the 40,000 metric tons of radioactive waste that has
accumulated at 70 commercial nuclear power plant sites across the nation.
The federal government is building a permanent underground repository
inside the mountain, but it won't be ready until at least 2010. Bush came
out against the temporary waste facility after election polls showed him
trailing Gore among Nevada voters, who widely oppose playing host to any
nuclear dump.


But Bush's mixed messages don't bother Joe Colvin, the president of the
Nuclear Energy Institute, an industry trade association. Election-year
rhetoric aside, he contends, the next President will have to embrace
nuclear power. "The Energy Department says we're going to need 200 to
300 gigawatts of new electric generation in the next 15 or so years,"
Colvin said. "The next President is going to have to look at what's
best for the U.S., and nonpolluting nuclear is going to have to be
part" of the energy mix.


Colvin and other nuclear industry executives argue that nuclear power is
entering a new era. The industry's 103 nuclear power plants, which now
produce 20 percent of the nation's electricity, are operating at higher
rates of efficiency than ever before, they emphasize. Also, the Nuclear
Regulatory Commission is likely to extend the operating licenses for many
of those plants, which are scheduled to close during the next two decades.
The commission so far has renewed the licenses for five plants and is
reviewing the applications of more than 20 others.


At the same time, the deregulation of electricity markets and the rising
price of natural gas has boosted the market value of nuclear power plants,
according to a report last month by Cambridge Energy Research Associates
and Arthur Andersen. Nuclear power will also get a boost, Colvin
contended, as utilities struggle to find easy ways to comply with the
strict air pollution reduction targets that the Clinton Administration has
imposed and as the federal government seeks to curb U.S. emissions of the
gases that cause global warming. "The new Administration is going to
have to come to grips with some of these bigger-picture issues," he
said.


The economic vitality of the nuclear industry has improved so dramatically
that for the first time since the Three Mile Island nuclear accident took
place near Harrisburg, Pa., in 1979, some executives are talking about
constructing new nuclear power plants in the United States. "I think
a nuclear plant will be built in the U.S.," predicts Jerry Yelverton,
the president and CEO of Entergy Corp.'s nuclear energy divisions. "I
don't know if it'll be in five years or 10 years. But if the U.S. sees a
hot summer next year like the South did, and electric prices go real high,
nuclear could be a much more acceptable option."


The Nuclear Energy Institute has begun a series of informal meetings with
electric company executives, construction companies, and other energy
industry heavyweights to draw up a business plan for new plant
construction. Executives from Commonwealth Edison Co., Duke Energy,
Entergy Corp., Peco Energy Co., and Southern Co., all of which now own and
operate nuclear power plants, have participated in those discussions.
Colvin said the group has not decided where, when, or what kind of plants
should be built. Industry officials note that they're most likely to site
a new plant on the campus of an existing nuclear facility, where local
residents are less likely to oppose construction. These officials also are
discussing the prospects for building 10 or 20 plants, with the hope of
saving millions of dollars by standardizing the plant design
plans.


Before the industry would get the financial backing needed for the new
nuclear power plants, however, the NRC would have to revise its licensing
process to allow early approval of plant site and design, Yelverton said.
The industry's aim is to make the price of a nuclear plant competitive
with the construction costs of a clean-burning coal-fired power plant.
"I don't think it's the technology that's going to keep us from
moving forward," he added. "I think it's going to be the
economics."


Despite the industry's optimism, nuclear power continues to face stiff
opposition from environmental activists, who argue that nuclear power is
dangerous and produces tons of radioactive waste that will continue to be
dangerous for generations. These critics disagree with the industry's
contentions that nuclear power is the solution to the nation's pollution
problems. "Switching from coal to nuclear power to solve our
global-warming problem would be like giving up smoking and taking up
crack," said Daniel F. Becker, the director of global-warming and
energy programs at the Sierra Club.


In late September, international environmental activists demonstrated
their hostility toward the nuclear industry during a negotiation session
on the United Nations' 1987 global-warming treaty. The activists, together
with officials from several European countries, argued that nuclear power
plants should not be included in a new program that would give U.S.
companies pollution-reduction credits for their investments in clean air
technologies in developing countries. The State Department, however,
blocked that anti-nuclear move.


Although Gore apparently has turned up his nose at nuclear power, the
Clinton Administration has quietly backed the industry. The NRC, dominated
by Clinton Democrats, has paved the way for nuclear power plants to renew
their operating licenses. In its fiscal 2001 budget request, the
Administration asked for $306 million for nuclear power research. In the
Administration's fiscal 1997 budget, funding for nuclear power was zeroed
out.


Nuclear industry officials concede that a major hurdle to gaining public
support and Wall Street financing continues to be nuclear-waste disposal.
That barrier could fall within the next year. The Energy Department has
until the end of the year to decide whether the Yucca Mountain underground
facility can safely hold the nation's commercial nuclear waste. If the
department gives the site a green light, the project will go to the next
President, who will have until July 2001 to make a final decision.
Environmentalists and Nevada state officials, however, argue that the
department's safety review of the Yucca Mountain facility has been
seriously flawed, and they vow to fight any decision to allow waste into
the repository.


Meanwhile, several utilities are pursuing lawsuits against the Energy
Department for its failure to remove nuclear waste from the power plant
sites by the Jan. 31, 1998, congressional deadline. So far, the courts
have ruled in the utilities' favor. In December 1998, the Supreme Court
let stand a lower-court ruling that the government had an
"unconditional obligation" to accept spent nuclear fuel by the
1998 deadline. In August, the U.S. Court of Appeals for the Federal
Circuit ruled that owners of four nuclear power plants have the right to
sue the Energy Department to recover damages.


The companies are seeking a total of $1.3 billion in damages for building
and running extra nuclear-waste storage facilities and for other expenses.
They argue that the federal government's total liability could wind up
being several times higher if recent court rulings are applied to other
nuclear power plants. Energy Department officials contend, however, that
the utilities' damage estimates are inflated.


Still, nuclear industry officials admit that nuclear power must also
overcome the most dangerous threat-the perception gap. Most members of
Congress support nuclear power, Colvin said, but lawmakers fear that their
constituents are less enthusiastic. In a recent campaign swing in
Cleveland, Bush echoed that concern, according to The New York Times.
Asked by an employee at a local technology company if he supported nuclear
power, Bush answered that he did not think Americans were "ready for
a nuclear initiative."


Margaret Kriz

National Journal