Can the U.S. Nuclear Power Industry Survive?

The recent announcement by Westinghouse Electric Co. that it had filed for bankruptcy sent a shockwave through the nuclear power industry. It wasn’t a secret that the company was struggling financially as a result of cost overruns and schedule delays at the two nuclear construction projects that are underway in Georgia and South Carolina, but when rumors become facts, the stakes are substantially elevated.

The news raised questions about whether or not the four AP1000 reactor projects—Plant Vogtle Units 3 and 4 and V.C. Summer Units 2 and 3—would be completed. Anti-nuclear groups quickly lobbied for the units to be abandoned. The Southern Alliance for Clean Energy held a telephone press conference the following day with four panelists who presented cases against project continuation.

Predictable?

One of the speakers was Peter Bradford—an adjunct law professor, former commissioner with the U.S. Nuclear Regulatory Commission, and former chair of the Maine and New York Public Utility Commissions. Bradford posed questions about whether or not nuclear cost overruns, construction delays, and bankruptcy should have been foreseeable. He then gave evidence suggesting the answer was yes.

He noted that Vogtle Units 1 and 2 overran original cost estimates by billions of dollars three decades ago. Furthermore, he said many northeastern states and every state in a crescent from the Carolinas to Washington state had at least one, nine-figure nuclear cost overrun in the 1970s or 1980s. Likewise, all of those plants were delayed by at least a year, and some by more than a decade.

By the mid-1980s, Bradford said nuclear power was already considered by many people to be the greatest disaster in business history. More than half of all units ever planned in the U.S. were canceled outright. In fact, Vogtle became the U.S.’s reference AP1000 plant by default after Bellefonte Units 3 and 4 were delayed to the point of cancelation. (It should be noted that Bellefonte Units 1 and 2 were never completed either.) Bradford suggested that the AP1000 projects should only be allowed to continue if costs to complete the units are determined to be less than obtaining the same energy in alternative ways.

“Incredibly enough, it’s at least possible that those alternatives may still be cheaper than these plants despite the amount of money already spent on them,” he said. “Customers have lost billions of dollars on these plants, but they shouldn’t be tossing good money after bad.”

Some Optimism Exists

But not everyone is as cynical about the future of nuclear power. Bryan Hanson, president and chief nuclear officer for Exelon Nuclear, gave the keynote address—focused on the future of nuclear energy—during the 2017 ELECTRIC POWER Conference & Exhibition on April 11 in Chicago. Exelon, of course, operates the largest nuclear fleet in the country. The company has 23 reactors spread across 14 locations in Illinois, Pennsylvania, New Jersey, New York, and Maryland.

Hanson acknowledged that the industry has seen its share of challenges in recent years including rising costs, falling energy prices, increased regulation, market inequities, and a lack of federal and state energy policies that value the critical infrastructure that nuclear power plants provide. Nonetheless, he is still “passionate” about the future of nuclear energy.

Although Hanson suggested that Exelon isn’t really considering any new units at this time, the company is participating in working groups to help develop next-generation nuclear designs in an effort to keep the U.S. nuclear industry relevant. He also believes finishing the AP1000 projects is important.

“I think it’s vital to show the American public… that we know how to construct nuclear power plants,” Hanson told POWER during an exclusive interview. “I think it’s important that we as an industry rally around Westinghouse and those two projects that are being constructed to ensure they do go forward.”

Yet, saving current facilities is clearly Exelon’s priority. “We need to make sure we preserve our existing U.S. nuclear plants. They’re so important to the critical infrastructure of this nation that we must do everything that we can to protect those,” Hanson said.

One thing that has provided a lifeline is subsidies. Both New York and Illinois have enacted policies that reward nuclear power plants for their zero-carbon emissions. Other states—such as Ohio, Connecticut, and New Jersey—are considering similar options.

However, calls to “Save the Nukes” are likely to fall on deaf ears in Georgia and South Carolina. Electricity rates have already increased for SCANA Corp. and Southern Co. customers as a result of the nuclear construction projects, and both companies must evaluate their options.

“If continuing the construction is not determined to be the most prudent path forward for either or both of the units, we will look to exercise the abandonment clause under the provisions of the Base Load Review Act,” said Kevin Marsh, CEO of SCANA Corp., during a March 29 conference call.

If both AP1000 projects were to be abandoned, it would take a game-changing development for any U.S. power company to seriously consider a new nuclear construction project ever again. ■

—Aaron Larson is POWER’s executive editor.