Nuclear rebirth hinges on Congress' actions
4/24/2009MONROE - The nuclear industry's hope for a renaissance depends on whether Congress passes more of the financial risk of scheduled plants along to taxpayers or utility customers, according to a national expert on nuclear policy who served on the Nuclear Regulatory Commission's governing board during the Three Mile Island crisis of 1979.
Peter Bradford, now a Vermont Law School adjunct professor and Yale University visiting lecturer who serves as vice chairman of the Cambridge, Mass.-based Union of Concerned Scientists, said financing for nuclear projects was a tough sell even during the industry's best days.
With the collapse of global financial markets and the country mired in a recession, utilities have a harder time courting investors, he said.
The industry is urging Congress to approve greater loan guarantees and other taxpayer-protected incentives, said Mr. Bradford, who has provided expert testimony to Congress and been employed as a nuclear consultant. He testified before the Michigan Senate's energy committee yesterday before delivering a speech to 50 people at Sisters, Servants of the Immaculate Heart of Mary in Monroe.
"What's going on out there doesn't legitimately resemble what can be called a renaissance," Mr. Bradford, also a former utility regulator, said. "Because the costs of nuclear plants are so high, they're not cost-competitive."
DTE Energy is the parent company of Detroit Edison, which operates the Fermi 2 nuclear plant. It is the only utility in the Great Lakes region that has filed an application for a new nuclear plant, though it has said it is likely years from deciding whether to follow through on its proposed Fermi 3.
A four-year NRC review is under way. A May 5 intervention hearing, at 10 a.m. in the Monroe City Council chambers, has been scheduled by the agency's Atomic Safety and Licensing Board at the request of activists who oppose the project.
After a lull of almost 30 years, the NRC began receiving more than two dozen applications for new reactors in September, 2007.
Mr. Bradford said that figure, though, is a bit of a mirage. Utilities that had any inkling of building a new plant were motivated to submit applications before Dec. 31 to take advantage of more than $6 billion in incentives offered by the Bush administration under the Energy Policy Act of 2005.
That could translate into
$300 million to $400 million in tax credits per reactor, according to DTE officials, who have acknowledged those incentives factored into their decision to file a 17,000-page application for Fermi 3 at a cost of about $30 million.
Mr. Bradford said he doubts if many new plants will be built in the near term because of their sheer costs. He claims costs have doubled in the last five years.
DTE's original estimate for Fermi 3 was $3 billion when the project was announced in 2007. The utility's latest estimate for it is $10 billion.
Steve Kerekes, spokesman for the industry's chief lobbying group on Capitol Hill, the Washington-based Nuclear Energy Institute, told The Blade yesterday the construction of new plants "will proceed at a deliberate, measured pace."
He said the industry expects four to eight new plants in operation by about 2017.
Contact Tom Henry at:
thenry@theblade.com
or 419-724-6079.