OAK HARBOR, Ohio — Davis-Besse is identified in a new economic report as one of a dozen U.S. nuclear reactors most likely to be closed by their utilities before their licenses expire because of changing energy markets, including falling natural gas prices, rising costs of nuclear operations, repairs, and post-Fukushima retrofits.
The report, issued Wednesday by a Vermont Law School economic analyst, came in response to decisions in recent months by utilities which own the twin-reactor San Onofre nuclear complex in southern California, Crystal River nuclear plant in Florida, and Kewaunee nuclear plant in Wisconsin. They chose to close those plants early because they had become too expensive to operate or repair.
Akron-based FirstEnergy Corp., which owns and operates Davis-Besse, had little comment on the report, other than to affirm it has no early closure plans for the plant along Lake Erie, about 30 miles east of Toledo.
It is Ottawa County’s largest employer.
Jennifer Young, FirstEnergy Nuclear Operation Co. spokesman, said in a statement that Davis-Besse and its sister facility, the Perry nuclear plant east of Cleveland, “play an important role in the company’s diverse generation portfolio.”
“Our focus is on safe, reliable operation, and as a result, FENOC's nuclear plants remain cost-effective and economically viable,” she wrote. “FENOC operates a strong nuclear fleet and has made significant capital investments to support long-term plant operation. We continue to pursue license extension for Davis-Besse and expect to remain a reliable source of clean power for many years to come.”
Davis-Besse’s 40-year license expires in April, 2017. FirstEnergy is seeking a 20-year extension to keep the license active through April, 2037.
The report was by Mark Cooper, senior fellow for economic analysis at Vermont Law School’s Institute for Energy and the Environment.
Joining Mr. Cooper on a national conference call was Peter Bradford, a U.S. Nuclear Regulatory Commission board member during the 1979 half-core meltdown of the Three Mile Island Unit 2 reactor. Mr. Bradford, a former utility commission chairman for the states of New York and Maine, also has taught nuclear power law at Vermont and Yale University. He has delivered testimony to Congress about nuclear power economics, and is a Union of Concerned Scientists board member.
The Cooper paper used Wall Street analyses by Moody’s, Credit Suisse, and UBS, and an analysis of past early retirements to identify risk factors. It identified 39 U.S. reactors with two or more. The report does not rank the 12 with the most risk factors.
“I’m not making predictions here and I really want to stress that. I’m just looking at risk factors. This is how Wall Street analysts look at it,” Mr. Cooper said.
He and Mr. Bradford said an impediment to nuclear power expansion in years’ past — uncertainty over where to bury radioactive spent fuel from reactors — now has taken a back seat to issues such as operating costs and repairs, and enhancements while hydraulic fracturing of shale bedrock, or fracking, has driven down natural-gas prices and is expected to keep them low for years.
“The bottom line is the tough times the nuclear industry faces today are only going to get tougher,” Mr. Cooper said.
He said the recent closings “have sent a shock wave through the industry and Wall Street.”
The U.S. Department of Energy had initially forecast no early closings, then only one by 2030, according to Mr. Bradford, who said that is indicative of “just how much of a jolt to the system” recent changes to the energy market have been.
Contact Tom Henry at: firstname.lastname@example.org or 419-724-6079.