Despite project setbacks, utilities may start up 14 nuclear power plants this year
Despite its highly publicized problems, commercial nuclear power remains the fastest-growing source of electricity in the United States. Since the first of the year, the financial struggles of several utilities with reactors under construction have repeatedly made the headlines. The multibillion-dollar cost of these projects has forced the cancellation of two plants - Marble Hill in Indiana and Seabrook 2 in New Hampshire - on which millions of dollars have been lavished. And several utilities have been forced to the edge of bankruptcy.
At the same time, however, a number of the 50 plants currently under construction are moving steadily toward completion with relatively little fanfare.
According to the Atomic Industrial Forum (AIF), an industry trade association , 28 of these reactors are now more than three-quarters complete. As many as 14 could begin operating this year, a level last achieved in 1974.
Already eight new reactors are in operation this year, and their various circumstances shed considerable light on current conditions of the entire industry.
When a commercial reactor is completed, its owner applies to the federal Nuclear Regulatory Commission for a license to begin operating at low power levels. After working the bugs out of the new machine, the utility returns to the NRC for authorization to run at full power. After obtaining this approval, the plant is tested for a brief period at full steam. Finally, the utility sets the date when the plant will begin commercial operation.
Currently, three reactors are either operating or are about to begin operating at the initial, low power level.
Best known is Unit 1 at Pacific Gas & Electric Company's Diablo Canyon power plant in California. The crowd of antinuclear anti-nuclear activists stood silent outside the plant's gate last week when the reactor started a nuclear chain reaction for the first time, symbolizing the near-end of a pitched, 15 -year political conflict over the plant.
Much less notorious is Susquehanna 2, operated by Pennsylvania Power & Light Company. This reactor, which began construction four years after Diablo Canyon, is scheduled to fire up its first nuclear chain reaction within days. Once in operation, however, it is likely to be the source of considerable local controversy. PP&L will be asking for a 20 percent rate hike to cover its $2 billion-plus price tag. This follows on the heels of a similarly hefty rate increase last summer when Unit 1 went on line.
Susquehanna 1 and 2 are a prime example of the rate shock that will accompany the completion of a number of these facilities. This occurs because the lion's share of a nuclear power plant's cost is in initial construction. In the long run, the fact that nuclear fuel is much cheaper than coal or oil balances out early expenses. But it means that the cost of nuclear electricity begins high and gradually declines, just the opposite of fossil-fuel plants.
Still, such steep jumps in electric bills represent a serious problem for consumers. Efforts are being made to work out ways to soften the blow by spreading increases out over several years.
Meanwhile, Grand Gulf 1, run by Mississippi Power & Light Company, continues to operate under a low-power license obtained last year. The utility has applied for a full-power license, but the NRC has yet to approve it. The reactor is the first of a new design, and federal regulators are concerned about the adequacy of its technical specifications. Also, the performance of the diesel generator used for backup power in the plant is being questioned.
So far this year, two other plants have moved from low- to full-power operation: LaSalle 2 in Illinois and WPPSS 2 in Washington State.
The LaSalle plant is owned by Commonwealth Edison Company, one of the most pro-nuclear of the nation's utilities. Despite the fact that the new plant will spell a 10.6 percent rate increase for its average customer, Commonwealth Edison calculates that nuclear-generated electricity is half the cost of coal. By depending on the atom for more than 50 percent of its power supply, the Chicago utility claims it saved its customers $703 million in fuel costs last year.
At $3.2 billion, Unit 2 of the financially troubled Washington Public Power Supply System (WPPSS) is the most expensive of the new reactors. Oddly, it will have the least effect on local electric bills because its power will feed into the massive Bonneville Power Authority system. Thus, the impact of its premium-priced kilowatts will be diluted with large quantities of inexpensive hydroelectric power.
Unit 2 is the only one of five reactors that WPPSS originally started which is being completed. Two units were abandoned, resulting in the largest default in the history of the municipal bond market. The other two have been mothballed.
Finally, three plants have moved into commercial operation this year as well. They are: San Onofre 3, owned by Southern California Edison Company; Summer 1 of South Carolina Electric & Gas Company; and McGuire 2, built by Duke Power Company in North Carolina.
The most notable of these is the McGuire plant. Finishing up for less than $1 billion, it is the most economical nuclear power plant completed in years. Even this, however, will drive up local rates by 6.2 percent.
Last year, nuclear power contributed 13 percent of the nation's electricity. Taken altogether, these eight new reactors represent enough additional capacity to power a city of nearly 4.5 million. From this perspective, the cost to construct them averages out to $3,800 per capita. But among the eight there is a variation in cost of 230 percent (in dollars per installed kilowatt). Similarly, utilities on average will be asking for rate increases of 9 percent, but individual rate hikes will vary from 0.10 percent to 20 percent.
There is general agreement that this wide range in costs is due to the difficulty of managing nuclear technology, including the complex federal regulations to which it is subject. In the hands of those who can master it, nuclear power can be a reliable and economic source of electricity, delesay many observers say. In the hands of those who can't, however, it can be costly and potentially dangerous.
Unit Capacity Construction Cost per unit of in megawatts time (years) installed capacity (electric) (dollars/kilowatt) McGuire 2 1,100 13 881 LaSalle 2 1,078 11 1,125 Summer 1 900 12 1,444 Susquehanna 2 1,050 11 1,952 San Onofre 3 1,100 14 2,045 Diablo Canyon 1 1,100 15 2,227 Grand Gulf 1 1,250 10 2,560 WPPSS 2 1,100 12 2,909
Total plant cost Estimated rate (billions of dollars) hike (percent) McGuire 2 .97 6.2 LaSalle 2 1.21 10.6 Summer 1 1.30 14.8 Susquehanna 2 2.05 20.0 San Onofre 3 2.25 5.8 Diablo Canyon 1 2.45 7.0 Grand Gulf 1 3.20 N.A. WPPSS 2 3.20 0.1