Tag Archives: loan guarantees

Nuclear “Renaissance” Meets Economic Reality, But Who Gets the Bill?

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Crystal River Nuclear Generating Plant, Unit 3, 80 miles north of Tampa, FL. (photo: U.S. NRC)

Crystal River is back in the news. Regular readers will recall when last we visited Progress Energy Florida’s (PEF) troubled nuclear reactor it was, shall we say, hooked on crack:

The Crystal River story is long and sordid. The containment building cracked first during its construction in 1976. That crack was in the dome, and was linked to a lack of steel reinforcement. Most nuclear plants use four layers of steel reinforcement; Crystal River used only one. The walls were built as shoddily as the dome.

The latest problems started when Crystal River needed to replace the steam generator inside the containment building. Rather than use an engineering firm like Bechtel or SGT–the companies that had done the previous 34 such replacements in the US–Progress decided it would save a few bucks and do the job itself.

Over the objections of on-site workers, Progress used a different method than the industry standard to cut into the containment building. . . and that’s when this new cracking began. It appears that every attempt since to repair the cracks has only led to new “delamination” (as the industry calls it).

Sara Barczak of CleanEnergy Footprints provides more detail on the last couple of years:

The Crystal River reactor has been plagued with problems ever since PEF self-managed a steam generation replacement project in September 2009. The replacement project was intended to last 3 months, until PEF informed the Commission that it had cracked the containment structure during the detensioning phase of the project. PEF subsequently announced that the CR3 reactor would be repaired and back in service by the 3rd quarter of 2010…then by the 4th quarter of 2010…and then by the first quarter of 2011. On March 15, 2011 PEF informed the Commission that it had cracked the reactor again during the retensioning process and subsequently told the Commission that it estimated repair costs of $1.3 billion and a return to service in 2014. Shortly thereafter, the Humpty Dumpty Crystal River reactor suffered yet another crack on July 26, 2011.

That July crack was later revealed to be 12-feet long and 4-feet wide–and here, at least when it came to notifying the Nuclear Regulatory Commission, “later” means much later. . . like four months later.

The issue, of course–as anyone with a lifetime crack habit will tell you–is that this all gets very expensive. Not only is there the cost of the repairs. . . and the repairs to the repairs. . . and the repairs to the repairs to the repairs. . . there is the cost of replacing the energy that was supposed to be supplied to PEF customers by the crippled reactor.

And then there is the cost of the new reactors. . . .

Wait, what?

Yes, based on the amazing success they have had managing Crystal River–and something called a “determination of need,” which was granted in 2008–Progress Energy holds out hope of someday building two of those trendy new AP1000 nuclear reactors at another Florida site, this one in Levy County.

And who is expected to pick up the tab? Who is on the hook, not just for repairs and replacement energy at Crystal River, but for PEF keeping its options open at Levy? Well, not surprisingly in “privatize profits, socialize risk” America, the plan was to stick Florida ratepayers with the bill (again Footprints provides the numbers):

Customer bills for instance, were expected to increase by $16/mo. in 2016; $26/mo. in 2017 and a whopping $49/mo. in 2020. Initially, Progress expected the proposed reactors to cost $4-6 billion each, coming online beginning in 2016. Just a few years later, the estimated costs have skyrocketed to over $22 billion and the online date, if the reactors ever even come online, has bumped back to 2021 and 2022. And the Office of Public Counsel believes that PEF may not intend to complete the reactors until 2027, if at all. The company has spent over $1 billion dollars on the Levy nuclear reactors and has yet to commit to build them. And the company is entitled to recover all its preconstruction and carrying costs from its customers before even a kilowatt of electricity is produced. In fact, even if the project is never completed PEF can recover all its construction costs from customers courtesy of the 2006 anti-consumer “early cost recovery” state law…essentially a nuclear tax scheme.

But now, as of this week, there is a new plan. . . stick Florida ratepayers with the bill:

The state Public Service Commission on Wednesday unanimously approved an agreement that will increase the power bills of Progress Energy Florida customers — who already pay among the highest rates in the state.

It is supposed to be a win for consumers.

The deal includes a $288 million “refund” of money customers were to pay to replace power from the crippled Crystal River nuclear plant, which has been offline since fall 2009 and might never return to service.

PSC staff concluded that customer rates still would increase. The average Progress customer’s bill on Jan. 1 is expected to increase $4.93 a month per 1,000 kilowatt hours of usage, from $123.19 to $128.12, subject to adjustments for fuel costs.

That’s a “win” for Floridians, it seems, because they are paying out something less for Progress Energy’s mistakes–at least in the near term. But even that caveat is subject to scrutiny:

While the agreement provides a replacement power cost refund over 3 years of $288 million to PEF customers (due to the CR3 outage) – it comes packaged with a base rate increase of $150 million and it precludes the parties from challenging up to $1.9 billion (yes, billion) fuel and replacement power costs from 2009 to 2016.

And that’s not all. Also in the agreement is a requirement that PEF start (yes, that is start) the latest repairs on Crystal River by the end of 2012; if they do not, Progress has to “refund” an additional $100 million to consumers. Missing, however, from the agreement is any new estimate (given the latest revelations, not to mention any post-Fukushima upgrades required) of the cost should PEF actually try to remedy all of Crystal River’s problems–and perhaps even more glaring, questions remain as to who will pay (and how much it will cost) should PEF decide to stop throwing good money after bad and decommission Crystal River reactor 3.

Also missing from the calculation is any determination of what PEF’s insurance will cover–Crystal River’s insurer stopped paying out in early 2011, and they have yet to decide if they will pay anything more. . . at all.

The agreement also fails to put an end to what is now becoming a regular part of the nuclear power finance scam–collecting public money for plants that will never be built. As the Southern Alliance for Clean Energy (SACE, which is affiliated with CleanEnergy Footprints) observed when it opted not to sign on to the Florida rate agreement:

PEF hasn’t committed to actually building the Levy Co. reactors. Having customers pay for the company just to maintain the “option” at a later date to build reactors is unfair to today’s customers – and runs counter to the Commission’s “intent to build” standard. The agreement allows the company to collect another $350 million from customers, presumably for pursuing their Nuclear Regulatory Commission license (without any prudency review) for reactors it hasn’t committed to build? In fact, the agreement contemplates that the company will cancel its engineering and procurement contracts as well, further demonstrating the unlikelihood of project completion.

If something sounds familiar here, it should. Southern Company has been using heaping helpings of Georgia ratepayer money to do all kinds of preliminary work on their Vogtle site, purportedly the future home of two new AP1000 reactors, just granted a combined construction and operating license by the NRC in January.

The big difference so far between Levy and Vogtle has been Southern’s ability to line up some financing for its Georgia construction–thanks to $8.33 billion in federal loan guarantees granted the project by the Obama administration almost two years in advance of the NRC approval.

PEF does not have this kind of guarantee, but that did not stop them from trading on the possibility:

Progress Energy Florida officials said Thursday that President Obama’s plan to offer federal loan guarantees to encourage investment in nuclear power plant construction will be a strong incentive to move forward with the company’s proposed Levy County plant.

The project, however, is facing delays of between 20 to 36 months due to economic and regulatory problems, making the plant’s future uncertain despite the company’s insistence the project isn’t cancelled.

“It (the loan guarantee program) will definitely play a role in that decision (whether to continue with the project). It is one of many, but a very important one,” said Progress Energy spokesman Mike Hughes.

That was in 2010, right after President Obama announced the new Department of Energy loan program–but two years later, PEF has not secured a federal guarantee, and so has not secured any financing. . . and thus has also not committed to ever building the Levy plant. But none of that has stopped Progress from collecting money from Florida consumers just to keep hope alive, as it were. And none of that has apparently stopped any of Florida’s public service commissioners from telling PEF that this practice is just jake with them.

Even with NRC approval and some federally guaranteed money, it is still not a sure bet that the Vogtle AP1000 reactors will ever come on line. PEF’s Levy project has no license and no loan guarantee.

The folks at Progress Energy are not stupid–at least not when it comes to short-term financial gain–they know how very slim their chances are of ever pushing even a single kilowatt out of Levy County, but they also know where the profit is in the nuclear power game. It is not, quite obviously, in the construction of nuclear power plants–rife as that process is with lengthy delays and massive cost overruns–and it is not, some might be surprised to learn, so much in electric generation, given that plants in the US are now suffering “unusual events” that force one or more of them offline pretty much every week. Unusual events cost money–in parts and labor, and in time lost to repairs and inspections–and, as has been demonstrated at Crystal River, there is the cost of replacement energy.

No, the real profits in the nuclear racket come from the ability to collect on services not rendered and a product not delivered, or at least not delivered regularly. Because the system backstops the financing of nuclear facilities while also allowing plant operators to pass both real and anticipated costs onto ratepayers, many American taxpayers are poised to pay twice for nuclear power plants that don’t produce power.

And it would be remiss to close without adding a few more points.

Much has been made of the failure of solar panel manufacturer Solyndra, which also received aid from the federal government in the form of loan guarantees. Solyndra ultimately got $527 million from the government; contrast that with what has been granted to Southern for Vogtle. Or, starker still, look at the entire alternative energy loan program, now projected to cost out at under $3 billion, and then look back to 2010, when Barack Obama pledged $54.5 billion to the DOE loan guarantee program designed to foster investment in nuclear power.

In addition, while the government will actually recoup most of the money lost on Solyndra when the factory and inventory are auctioned off, the “leftovers” from a failed nuclear plant–even the parts that are not contaminated with radioactivity–are much harder (if not impossible) to move.

The focus of this story has been on the costs–because the case of Progress Energy Florida is such a glaring example of how nuclear operators fleece America–but the fact that a company so focused on the bottom line, regardless of its effect on public safety, is still allowed to play with something as dangerous as a damaged nuclear power plant should not be overlooked. Alas, as was exposed last year, nuclear regulators and the nuclear industry seem to agree that safety should be addressed with an eye toward cost. So, while Crystal River is a scary mess, the reactor in question is actually offline right now. The same cannot be said, for example, about Ohio’s Davis-Besse plant, which has cracking problems of its own, but was allowed by the NRC to restart in January–over the vociferous objections of industry watchdogs, engineers, and Rep. Dennis Kucinich (D-OH).

And then there is Palisades, on the shores of Lake Michigan, where numerous events and releases of radioactivity in the last year caused the Nuclear Regulatory Commission to issue a downgrade of the plant’s safety rating–but the NRC did not order the plant to shut down. Palisades is owned by Entergy Nuclear, who was recently cited for “buying reactors cheap, then running them into the ground.” In addition to Palisades, Entergy owns nine other plants–Arkansas Nuclear One, Nebraska’s Cooper Nuclear Station, Fitzpatrick in upstate New York, Grand Gulf in Mississippi, Indian Point, just north of New York City, Pilgrim, outside of Boston, River Bend and Waterford, both in Louisiana, and Vermont Yankee.

The case of Vermont Yankee is especially upsetting. Yankee is a GE boiling water reactor, similar to the model that failed so catastrophically at Fukushima–but the NRC voted to extend its operating license just days after the Tohoku quake. The state of Vermont had a better idea, declaring that the nuclear plant should shut down by March 21, 2012. However, in January, federal district court judge J. Garvan Murtha ruled Entergy could ignore Vermont’s order and continue operating. The state is appealing the ruling, but in the meantime, Yankee continues to operate. . . and continues to leak tritium into the groundwater, and into the Connecticut River.

It is not clear who will be paying for any attempt to clean up the Vermont Yankee leak–though one can guess–nor is it clear what will happen to new nuclear waste produced after March 21, since the Vermont statehouse has forbidden any new waste storage on the site. Indeed, storing used nuclear fuel is a nationwide problem that poses real dangers in the near term, and will likely cost billions of public dollars in the long term.

And that’s the bottom line–the real bottom line–for the industry’s oft-ballyhooed “nuclear renaissance.” Plant operators and captured regulators can try to obscure the safety concerns with diversionary dustups and magical thinking, but economic realities, like facts, are stubborn. Without huge injections of public money, nuclear power simply cannot continue to function–and the public is in no mood for another multi-billion dollar government bailout.

Subsidize This: US Eyes Tariffs on Chinese Solar Panels, But What Gets Protected?

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Inside SolarWorld's Oregon manufacturing plant. (photo: OregonDOT)

While trade is often a bone of contention between the United States and China, this week’s visit by Chinese Vice President Xi Jinping threw the spotlight on one subset of that battle that could have far-reaching effects well in excess of the raw dollar amounts at stake.

At issue is a complaint filed by a solar industry trade group, the Coalition for American Solar Manufacturing, or CASM, asking that the US government impose tariffs on Chinese solar panels. CASM wants the duties for what it claims are unfair subsidies by China that make Chinese solar products substantially cheaper than those offered by many US competitors.

Language in President Obama’s State of the Union, along with comments made during Xi’s visit, would seem to indicate that the federal government is set to weigh in on the side of US solar energy companies in this brewing trade war, and so make a stand for domestic green energy manufacturing and good-paying American jobs.

It seems like a political slam-dunk. The president, after all, campaigned in 2008 on the promise of a growing alternative energy sector, and protecting jobs from being off-shored appears to be the perfect play at a time when unemployment is still unacceptably high. But the reality is, to put it in diplomatic speak, more nuanced.

First, that solar trade group, the Coalition for American Solar Manufacturing, claims to represent seven solar manufacturers, but the only company publicly identified as a CASM member is SolarWorld. SolarWorld is actually not a US company, but a German one, though it does employ about 1,000 at its Hillsboro, Oregon factory.

And even that number is nuanced. SolarWorld is considered the largest producer of solar panels in the US, and so it is used as a sort of case study in this trade dispute. Several stories on the topic note that SolarWorld shuttered its Camarillo, California plant, and with it went 100 jobs. The implication is that Chinese pricing caused the California closure, but a quick step through the Google looking glass will reveal that SolarWorld moved all its manufacturing to Oregon after that state offered it millions of dollars in tax breaks.

There is nothing inherently wrong with what Oregon did (unless you are one of the newly unemployed in California), but it should be part of the discussion. Not all jobs lost are part of the international trade war; in a low-growth economy, state governments are increasingly generous with the private sector as they try to secure precious jobs.

And not all “American” solar manufacturers actually do their manufacturing in America. SunPower, a San Jose-based solar company that has said it is “neutral” in this trade row, manufactures most of its solar panels in the Philippines.

Measuring the US solar sector by manufacturing alone is also a faulty yardstick. A majority of domestic solar-sector jobs–52%–are actually in installation. . . and there’s the rub. . . well, a rub. . . potentially, a really big rub.

Oregon’s two Democratic Senators, Ron Wyden and Jeff Merkley, are obviously quick to jump in on the side of a company that provides their state with 1,000 jobs (and solar manufacturing across all companies might provide Oregonians with something like twice that number). US Representatives, like Democrats Jackie Speier, Barbara Lee and Pete Stark, who have solar startups in their California districts, have also called for the federal government to investigate Chinese trade practices.

The Department of Commerce is scheduled to rule on CASM’s complaint by March 5, but if it takes what looks like the politically smoother path and sides with SolarWorld and their invisible friends, the next step would be for the US to impose tariffs on Chinese-made solar components, thus halting the rapid downward trend in prices for solar panels, and quite possibly driving prices up again here in the United States.

And that could actually spell big problems for America’s solar sector. Though it is hard to find an “expert” without some vested interest in some side of this dispute, there seems to be consensus that the recent substantial drops in the price of solar equipment have spurred a vast expansion in the numbers of homes, schools, businesses and government buildings that have installed solar cells to meet some or all of their electric power needs. Those installations, as noted above, mean jobs, and they also mean energy savings–both immediate and sustainable–for both individuals and municipalities. And while there are tax breaks for retrofitting buildings with solar panels, those breaks are mostly available for private buildings (not public schools and municipal buildings, where alternative energy could make a quick and substantial impact), and the savings do not make up for the price difference between Chinese- and American-manufactured products. The tax breaks are also scheduled to expire in 2016.

And there’s a multiplier effect that makes the basic savings seem small in comparison. Every home, hospital or school using solar power is that much demand that is not being placed on the conventional electrical grid. Depending on the region, that means less demand for coal-, gas, or nuclear-powered generation. And that means less demand for disappearing resources and less need to build costly, new power plants. It could also mean lower costs to society in the form of fewer pollution- and radiation-related health problems.

Then there is the obvious metric: Carbon-based power generation is guaranteed to grow more expensive as time marches on; the same has proven true for nuclear power. Solar prices are on a steady downward path, and solar power, if allowed to grow in market share, will continue to grow cheaper and more competitive.

And competition is what this is all supposed to be about, right? CASM has accused China of unfair trade practices that make it impossible for American manufacturers to compete. Proponents of 19th and 20th Century power-generating technologies love to remind advocates of alternative energy that fossil and fissile fuels are just “more competitive.” All things being equal. . . the market will decide. . . if there is a level playing field. . . or so the argument goes.

Fair enough, let’s look at that playing field.

Right now, without trying to estimate any possible solar tariffs, the alternative energy sector does get some help. According to a study from the Environmental Law Institute, renewables received $29 billion in federal subsidies from 2002 to 2008. Remove ethanol form that number, and you are down to $12.2 billion.

But during that same period, fossil fuel production received $72.5 billion in subsidies. That number excludes general energy sector subsidies–and it also excludes nuclear. The amount that nuclear receives is harder to calculate in the aggregate–loan guarantees are just guarantees until there is a default, and the Price-Anderson indemnity act has a value, but quantifiable payouts only come with disasters–but it is believed that for the second half of the 20th Century, nuclear consumed 10 percent of all US subsidies to the energy sector, something well in excess of $100 billion since the industry’s start.

But the numbers for fossil fuel and nuclear power are ridiculously low-ball. Not included there, what the federal government has to spend to clean up a polluted river or an oil spill in the gulf; nor does it include what the US has and will have to spend on behalf of the nuclear industry to transport and store its dangerous radioactive waste for as far forward as anyone can imagine.

Still, a “level playing field” sounds inherently fair, so why should domestic solar manufacturing have to suffer for the sins of legacy energy production?

Indeed. Wouldn’t it be amazingly convenient for gas producers or nuclear power concerns if the downward move in solar panel prices were arrested by a US tariff?

Instead, what if the federal government leveled that playing field by increasing its subsidies to domestic solar production?

Do more subsidies somehow sound too extravagant in these times of supposedly tight budgets? OK, then maybe the gas industry should be made to pick up the tab for trucking in fresh water to communities that have had their natural water supplies poisoned by hydro-fracking. Maybe the oil industry would like to pay to register its offshore rigs in the United States when they are drilling in US waters. Or maybe the nuclear industry should be required to find their financing without federal loan guarantees.

That last point is of special interest here. Take, for example, the two Chinese companies said to be providing the most competition for US solar manufacturers. According to SolarWorld representatives, “Trina Solar received a $4.4 billion loan from the China Development Bank, and Jinko Solar got a $7.6 billion loan from the Bank of China.” As regular readers of this space probably recognize, both of those figures are eclipsed by the $8.3 billion loan guarantee given by the Obama administration to the Southern Company for two recently approved nuclear reactors in Georgia.

So, fair is fair, level that playing field, but level it all over. If the US wants to move to make its solar companies more competitive with Chinese manufacturers, then make other energy sectors have to compete on similar terms. Rather than protect entrenched, disappearing, dangerous and dirty sources with duties that will render the entire solar sector less competitive, grant solar and other promising renewable alternatives the same level of help the US has habitually handed to fossil and fissile fuels. Rather than constrain domestic job growth by making solar power more expensive, pave the way for more good jobs with greater subsidies for both solar manufacturers and consumers. Rather than blow current and future resources on fuels that will only grow more expensive, spend now to expand the contribution of energy that continues to improve its cost-to-kilowatt ratio. Rather than use taxpayer dollars to pay for more pollution, more global warming, more cleanups and more adverse health outcomes, invest in clean, green technologies that not only pay immediate dividends but also have the potential to place America at the forefront of the next economic revolution.

If the Commerce Department does move toward imposing tariffs on Chinese solar manufacturers, the Obama administration and others in the government–as well as parts of the solar industry here–will now doubt call it a move on behalf of American manufacturing and the American worker. But will it be a move on behalf of America? The government might very well need to get involved to further the growth of this renewable energy sector, but if they do, manufacturers, workers and consumers should all insist that the intervention is done in a way that is truly in the public interest.

NRC Chair Jaczko: Events Like Fukushima Too Rare to Require Immediate Changes

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NRC, nuclear

NRC Chair Gregory Jaczko (photo: Gabrielle Pffaflin/TalkMediaNews)

For those that think nothing has changed in United States regulation since the Japanese earthquake and tsunami started the ongoing crisis at the Fukushima Daiichi nuclear facility, think again. The pre-disaster mentality of “What could possibly go wrong?” has been replaced with reassurances that “Stuff like that hardly ever happens!”

At least that is the impression conveyed by the current chairman of the US Nuclear Regulatory Commission, Gregory Jaczko, in a pair of early October interviews. During two NRC-sponsored events, Jaczko fielded questions first from nuclear industry professionals and those considered friendly to the expansion of nuclear power, and then, in a separate session two days later, responded to representatives from public interest groups and other individuals generally seen as opposed to nuclear energy.

While the tone of the questions differed somewhat predictably in the two sessions, Chairman Jaczko’s attitude did not. Jaczko took several opportunities to praise the NRC staff and the processes and protocols used by the commission, repeating in both panels that the primary duty of his agency is ensuring the safety of nuclear facilities in the United States.

Beyond his broad assurances and patient, capable demeanor, however, many of the chairman’s assertions about both the NRC process and the progress being made toward his stated safety goals highlighted notable contradictions and troubling biases inherent in America’s nuclear regulatory regime.

To be fair, the pre-Fukushima outlook was not exactly “What could possibly go wrong?” In terms of the types of accidents and the repercussions of contamination, containment breaches, radioactive releases, meltdowns, melt-throughs, and a host of other undesirable situations, regulators and industry insiders alike were probably quite aware of what could go wrong. But as US nuclear proponents and profiteers strove to convey the impression of an informed industry, they also moved to downplay the threats to public safety and made sure to stress that, when it came to disaster scenarios, they had it covered.

If the disaster in Japan has proven one thing, though, it is that plant operators and nuclear regulators didn’t have it covered. Events (or combinations of events) that were either not foreseen or not acknowledged leave Japan scrambling to this day to understand and mitigate an ever-evolving catastrophe that has contaminated land and sea, and exposed yet-untallied thousands of Japanese to dangerous levels of radiation. “As we saw in Fukushima,” said Jaczko, “accidents still do happen in this industry. If we are thinking that they can’t, we are in a dangerous place.”

But for US nuclear regulators, there needn’t be any sense of urgency–or so believes the NRC chair. When asked why the agency doesn’t hold up plant relicensing until new standards that include lessons learned from the Japanese disaster are in place, Jaczko expressed confidence in the current system:

Bottom line is that changes get made at a plant. . . some changes will be made quickly, some may take years. It doesn’t matter where a plant is [in the process]–what is the licensing phase–but that changes get made. These are low frequency events, so we have some leeway.

It is a posture Jaczko took again and again in what totaled over two-and-a-half hours of Q&A–accidents are very, very rare. Given the history of nuclear power, especially the very recent history, his attitude is as surprising as it is disturbing. Beyond the depressingly obvious major disasters in nuclear’s short history, unusual events and external challenges now manifest almost weekly in America’s ageing nuclear infrastructure. The tornado that scrammed Browns Ferry, the flooding at Fort Calhoun, the earthquake that scrammed the reactors and moved storage casks at North Anna and posed problems for ten other facilities, and Hurricane Irene, which required a number of plants to take precautions and scrammed Calvert Cliffs when a transformer blew due to flying debris–all are external hazards that affected US facilities in 2011. Add to that two leaks and an electrical accident at Palisades, stuck valves at Diablo Canyon, and failures in the reactor head at oft-troubled Davis Besse, and the notion that dangerous events at nuclear facilities are few and far between doesn’t pass the laugh test.

That these “lesser” events have not resulted in any meltdowns or dirty explosions does nothing to minimize the potential harm of a more serious accident, as has been all too vividly demonstrated in Japan. The frequency or infrequency of “Level 7” disasters (the most severe event rating–so far given to both Chernobyl and Fukushima) cannot be used to paper-over inadequate safeguards when the repercussions of these catastrophes are so great and last for generations.

Storage concerns don’t concern

Chairman Jaczko’s seeming ease with passing current problems on to future generations was also in evidence as he discussed mid- and long-term storage of spent nuclear fuel. Though previously a proponent of an accelerated transfer of spent fuel from pools to dry casks, Jaczko now says, post-Fukushima, he has “no scientific evidence that one method is safer than the other.” The chairman made a point of noting that some dry casks at Virginia’s North Anna plant moved during the August earthquake, but said that it will be well over a year before we can evaluate what happened to wet and dry storage systems at Fukushima.

While it is true a full understanding will have to wait until after Daiichi is stabilized and decontaminated, it is already apparent that the spent fuel pools, which require a power source to actively circulate water and keep the stored fuel cool, posed dangers that in some ways rivaled the problems with the reactors. (So far, no Japanese plants have reported any problems with their dry casks.) So obvious was this shortcoming, that the NRC’s own staff review actually added a proposal to the Fukushima taskforce report, recommending that US plants take more fuel out of wet storage and move it to dry.

Jaczko’s newfound indifference is also odd in light of his own comments about dry casks as an alternative to a central nuclear waste repository. Asked in both sessions about the closing of Yucca Mountain (the proposed US site for spent nuclear fuel), the chairman buoyantly championed the possibility of using on-site dry casks for hundreds of years:

The commission is taking the appropriate action to address the storage of spent fuel. We have come to the conclusion that, over the short- and medium-term, safe storage is possible. We are taking a look at what is the finite limit on current [dry] storage. . . 200, 300, 400 years. Is there a time we have to move the fuel? . . . Nothing tells us we shouldn’t generate the [radioactive] material. We don’t see a safety concern out 100 years, or anything that says at 101 years, everything changes.

Chairman Jaczko then added that while the nuclear industry is generating waste that will require “long, long term storage or isolation,” it is not unprecedented to assume this problem can be taken care of by “future generations.”

It is good that Jaczko has such faith in the future, because his depiction of the present is not actually that impressive. While the NRC chief repeatedly touted their “process” for evaluating risks, problems, and proposals, he also painted a picture of a bureaucracy that has so far failed to fully act on the initiatives he has considered most important. Neither the fire-safety improvements Jaczko has championed since he came to the commission in 2005, nor the security enhancements required after 9/11/2001 have as yet been fully implemented.

Process is everything

Time and again, whether he was directly challenged by a question or simply asked for clarification, Gregory Jaczko referred to the NRC’s “process.” “We have a relicensing process,” “there is an existing process [for evaluating seismic risk],” there is a process for determining evacuation zones, there is a process for incorporating lessons learned from Fukushima, and there is a process for evaluating new reactor designs. Process, of course, is not a bad thing–in fact, it is good to have codified protocols for evaluating safety and compliance–but stating that there is a process is not the same thing as addressing the result. Too often, what might have sounded like a reasonable answer from the chairman was, in reality, a deflection. “The process knows all; trust in the process. I cannot say what will happen, and what I want to happen does not matter–there is a process.” (This, of course, is a dramatization, not a direct quote.) Form over functionary.

But Jaczko had barely started his second session when his reliance on process suffered an “unusual event,” as it were.

Asked about why the NRC seemed to be moving full-speed ahead with relicensing, rather than pausing to wait for Fukushima taskforce recommendations to be formalized, the agency chief first said, “There is an existing program, there are processes.” But within a breath, Jaczko then said, when it comes to lessons learned from Fukushima being some sort of prerequisite for final license approval, “We are going to look on a case-by-case basis.”

Is deciding whether to apply new requirements on a “case-by-case basis” actually a process? Many would say it pretty much defines the opposite.

The counter-intuitive also took a star turn when it came time to consider new externalities and pending environmental impact surveys. Shouldn’t the Fukushima taskforce findings be considered as part of a series of new environmental impact studies? Well. . . “It is clearly new information, but does it affect the environmental impact survey? Because they are very, very low likelihood events, it is not part of the environmental impact survey.” Jaczko here seems to be saying that unless you know in advance of the new study that the new information will alter the findings, you do not need to consider new information.

Shocked, shocked

With such confidence in the commission and its process, would it be safe to assume that Greg Jaczko is comfortable with the current state of nuclear safety in the United States? Perhaps surprisingly, and to his credit, the NRC head seems to say “no.”

As previously discussed, Jaczko expected faster action on fire safety and security upgrades. He also defended his going public with complaints about design problems with the AP1000 reactors proposed for Plant Vogtle:

We had been going back and forth with [AP1000 designer] Westinghouse for two years. I felt [a lack of] openness; felt if you aired the issues, they get addressed. Now, I feel it was. . . addressed. It ultimately forced these issues to get resolved.

Chairman Jaczko was also asked what tech issues keep him up at night:

Those components that are not replaceable, not easily inspectable. Those subjected to repeated exposure to high radiation, stresses that cause high degradation.

Jaczko said he felt the commission had a handle on what radiation does to the concrete in the containment vessel, but he was less sure about the effect of “shock,” which he defined as “repeated power trips” or scrams. Jaczko acknowledged that this increases stress on the containment vessels, and added, “Some places will not have 20 years [left] on pressure vessels. We get into an unknown piece of regulation on pressure vessel repair.”

That is a pretty stark revelation from a man so passionate about his agency’s ability to, uh, process new data, but it highlights another facet of Jaczko’s approach to regulation.

Noting that New Jersey’s Oyster Creek reactor was granted a renewed operating license for 20 years, but its operator later negotiated with the state to shut it down in 10 years, Jaczko said, “Extension is an authorization to operate, not a requirement to operate.” Relicensing, he said, might come with requirements for modifications or orders that they “monitor aging.”

Jaczko also said that states or facilities might decide it is not economically viable to keep a plant running for the full length of its license, “Like if you have a car and the clutch goes and you make a decision not to replace it.”

How to regulate, even without the Regulatory Commission

Yes, another deeply flawed automobile analogy, but note that Jaczko allows for, and maybe even expects, limits to a plant’s life that are not regulated by the NRC. And in detailing such, the chief regulator of the US nuclear industry shows where citizens might exercise leverage when his NRC fails.

First, there is that issue of economic viability. As previously discussed, the market has already rendered its verdict on nuclear power. In fact, it would be absolutely impossible to build or operate a nuclear plant without loan guarantees, tax breaks, and subsidies from the federal government. The new construction at Vogtle is projected to cost nearly $15 billion (and these plants always go way over budget), and the Obama administration has had to pledge $8.33 billion in loan guarantees to get the ball rolling. Without that federal backstop, there would be no licensing battle because there wouldn’t be the possibility of the reactors getting built.

In fact, in this time of questionable nuclear safety, deficit peacockery and phony Solyndra outrage, it is illustrative to note:

. . . in FY2010 alone, $2.82 billion went to natural gas and petroleum interests (through direct expenditures, tax expenditures, research and development funds, and loan guarantees), $2.49 billion to nuclear energy interests and $1.13 billion to solar interests.

Would any of the relicensing and new construction applications be before Jaczko’s NRC if the energy-sector playing field were leveled?

Second, at many points in the interview, federal regulator Jaczko referenced the power of the states. Early in the “pro” nuclear session, an anxious question expressed worry that states such as Vermont could play a role in the relicensing of reactors. While stating it was yet to be determined whether Vermont’s authority overlapped with the NRC, its chairman stated plainly that states do play a role. “States decide what kind of generating sources they use,” Jaczko said, “especially if the state has a public utility.”

When asked in the second panel if the NRC considers whether new rules or licensing delays will cause rate hikes for consumers, Jaczko said the final determination on rates was the purview of a state’s public utilities commission:

If the PUC denies charges, then they won’t get our approval to go forward–but if the PUC denies a rate change, they [the plant operators] still have to make the improvement required.

And when discussing how the NRC draws evacuation zones, Chairman Jaczko said that in the end, it was the responsibility of the state and local governments, acting on data from the utilities and advice from the NRC, to determine where, when and how to evacuate in case of a nuclear accident.

And, yes, that does sound again like some of the buck-passing that marked too much of these interviews, but it is also a roadmap for a possible detour around a recalcitrant or captured federal agency. If activists feel shut out of the regulatory process, they can attack the funding. If federal elected officials are not responsive (because they, too, have been captured by a deep-pocketed nuclear industry), concerned citizens can hit closer to home. As Jaczko says, states can choose their power sources, and states can define evacuation protocols that either better insure public safety or reveal continued operation of nuclear facilities to be untenable.

Such action would not be easy–state and local officials have their own interests and conflicts–but it might prove easier than a broad federal play. Recent successes by those seeking to close aging coal-fired generators show that action at the individual plant level is possible.

Open to openness

For anything to happen, of course, it is important that a dedicated and passionate citizenry organize around a tactic, or, if they prefer, a process. But it will also require a level of openness on the part of government. Sometimes that openness is offered, sometimes it is hard won, but without transparency, progress is hard to make and hard to measure.

Gregory Jaczko repeatedly stated that he is a big advocate of openness, and he offered these interviews in that spirit. These two events obviously didn’t go all the way in that direction–not even close–but the sessions had merit. Chairman Jaczko, despite all the problems detailed above, can still be admired for exhibiting something rather rare in today’s political climate, a regulator that actually believes in regulation. He, in fact, conveys a passion for it. That some of that regulation is based on flawed assumptions, and that much of it is weak or never enforced, cannot be ignored, but if the head of the Nuclear Regulatory Commission advocates for the regulatory process (even when hiding behind it), then there is at least a process to improve.

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A version of this story was previously posted on Truthout.