[NukeNet] Hope Dim For Nuclear Power In New England

[Mike Ewall]

http://www.courant.com/news/custom/topnews/hc-nuclear0101.artjan01,0,322176.story?coll=hc-headlines-negg

Hope Dim For Nuclear Power In State

Reactors Popular In South, But Few Policy-Makers In Connecticut 
Support Them, Even As Emissions Cap Looms

By MARK PETERS, Courant Staff Writer January 1, 2008

Like other elected officials, Waterford First Selectman Dan Steward
can tick off the challenges Connecticut faces when it comes to
electricity, from some of the country's highest rates to a growing
reliance on natural gas to generate power.

What's different is his solution.

Steward wants more nuclear power built in Connecticut and sees his
coastal community as the best place for the first new reactor in the
state in two decades. Sounding more like a Southern pol than a
lifelong Yankee, he says the state should encourage Dominion Resources
Inc. to expand its Millstone Nuclear Power Station, ensuring that
there's enough electricity to meet demand for decades to come.

"It would certainly be in Connecticut's best interest to get in line,"
said Steward, a grandfather and one-time information-technology
supervisor at Millstone.

Rising electricity demand, concerns about fossil fuel supplies,
lucrative federal incentives and the emergence of global warming as a
leading issue have ignited a resurgence in nuclear power. Power
companies are proposing to build new multibillion-dollar reactors for
the first time since the 1970s.

Federal regulators expect applications for more than 30 new reactors
by the end of 2009. The first few are beginning to arrive. And the
pattern is clear: Almost all of the nuclear action is happening in the
South as expansions to existing nuclear plants.

Come up north, and Steward is a lonely voice.

New nuclear development is not likely in Connecticut, or the rest of
New England, any time soon. There are discussions about nuclear power
— one Dominion official said he gets a couple of queries a week from
policy-makers in New England — but at least for now, they are closeted.

"No one," said Donald Downes, chairman of the state Department of
Public Utility Control, "wants to come out and say: 'Guys, build more
nukes.'"

The reason? Decades of environmental, safety and cost concerns eroded
political support for nuclear power in New England. Contributing to
the skittishness is the slow growth in electricity use in the Northeast.

And a deregulated power market creates a huge and untested risk for
any company that wants to spend the $3 billion to $4 billion it would
take to build a new reactor here.

No company could make money on a new nuclear reactor in the New
England market as it's now working, the agency that runs the region's
electric grid said in a study last summer.

Yet nuclear power, some energy experts say, can't just be dismissed —
even in Connecticut.

Starting in 2009, Connecticut will be part of a group of Northeast
states adhering to the nation's first cap on the emission from power
plants of global warming gases, which nuclear plants don't emit.

Recent projections by the Connecticut Siting Council predict slow, but
steady growth in electricity consumption — only about 1 percent a
year, but still enough to create the need for more generation at a
time when old plants are becoming obsolete. Renewable sources, such as
wind and solar, and conservation measures so far provide just a sliver
of the answer.

Fossil fuel prices, which contribute heavily to the cost of
electricity, continue to be volatile, with many predictions of more
increases as China and India industrialize further.

"Sooner or later the Northeast has to embrace nuclear," said David
Crane, president and CEO of NRG Energy, the owner of several fossil
fuel plants in Connecticut. NRG has proposed two new reactors in Texas.

Atomic Baggage

Nuclear power comes with plenty of baggage in New England. People
remember the shutdowns, safety violations and cost overruns.

At Millstone, which began generating power in 1970, the cost to build
a third reactor mushroomed from hundreds of millions of dollars to
billions in the 1980s. The experience was not unique to Connecticut.
Seabrook Station in New Hampshire bankrupted the company that built
it, making a mockery of the old slogan "too cheap to meter."

"It was a very painful and difficult and costly experience, really,
for everyone involved in it," said Gerry Garfield, a partner at the
law firm Day Pitney in Hartford with extensive experience in the
nuclear industry.

Although the nuclear industry says it has never operated more safely,
concerns remain about what could go wrong. Three Mile Island and
Chernobyl quickly come to the lips of opponents of atomic power, many
of them graying activists.

Iodine pills given to people who live near Millstone are a tangible
reminder of the risks. Safety and environmental problems plagued the
plant in the 1990s; its former owner, Northeast Utilities, pleaded
guilty to felony charges.

Although the safety issue continues to color the political debate, the
nuclear power industry is making a stronger case for itself as an
environmentally responsible substitute for plants that burn fossil
fuels. Reactors produce massive amounts of electricity without
emitting carbon dioxide, the main greenhouse gas blamed for global
warming.

But the plants produce radioactive wastes, which continue to cause
environmental, safety and security concerns. The federal government
has no agreed upon plan for spent fuel rods, which are now stored
onsite at Millstone and other nuclear plants.

And even if the waste issue were to be addressed, environmental groups
in Connecticut aren't convinced that nuclear power is the answer to
global warming. They prefer a growing focus on cutting electricity use
through efficiency — a cleaner and cheaper way to reduce carbon
dioxide emissions.

"We don't always have to build new power plants to meet demand," said
Daniel Sosland, executive director of Environment Northeast, an
environmental advocacy and research organization.

Official policy — in both major political parties — reflects the
environmentalists' concerns, the memories of cost overruns and the
historical opposition that permeates New England.

Throughout last spring's debate about electricity rates, for example,
Gov. M. Jodi Rell and leaders in the General Assembly largely ignored
the largest source of electricity in the state — nuclear power.

They focused on wind, solar and other renewable sources of generation;
conservation and efficiency measures; and fuel cells.

A spokesman for Rell said there's little need to talk nuclear. The
industry, meanwhile, points out that under the best-case scenario, a
reactor would take eight years to permit and build — and requires
strong political will.

"New England is viewed as a very hostile place," said Lee Olivier,
executive vice president of operations at NU and a veteran of the
nuclear power industry. "The companies want to build nuclear power
where there is favorable acceptance."

Southern Hospitality

They've found acceptance south of the Mason-Dixon line. Dominion,
which is Virginia's largest regulated utility, is planning to build
its first new reactor at a plant it owns in Louisa County, Va., about
90 miles southwest of Washington, D.C. — in a county of second homes
and long-distance commuters.

"You have the normal environmental group who oppose it for 17
reasons," said Jackson T. Wright, chairman of the board of supervisors
for Louisa County.

Entergy Corp., which owns nuclear plants in Massachusetts and Vermont,
has the support of state officials in Louisiana and the governor in
Mississippi as it plans new reactors in those states.

By contrast, the biggest debate in recent years in the General
Assembly about nuclear energy has been whether to impose a windfall
tax on Millstone because of the high profit that some elected
officials say Dominion makes on the power the plant generates.

Millstone, a decade removed from its safety and regulatory troubles,
is indeed profitable. Millstone's two reactors generate more than
2,000 megawatts; that's about 30 percent of the state's total
capacity, but because the Millstone reactors run more than other
plants, the complex supplies nearly half of the electricity generated
in Connecticut.

And there is room for more reactors under the original site plan.

Advocates for nuclear power see long-term price advantages for states
that support new reactors. Once the plants are operational, they can
produce power at a steady price because labor, and not fuel, is the
leading cost of running a nuclear plant.

That brings an economic advantage rarely discussed in the debates
about safety and cost. Nuclear plants return more wealth to a
community because the money spent running them stays in the pockets of
the residents who work there.

Despite these advantages, which proponents assert, Daniel Weekley,
director of Northeast government affairs for Dominion, said the
political climate would need to change for Dominion to become
interested in adding a reactor in Connecticut.

But Weekley added, "I get the question more and more from reasonable
regulators and legislators."

Power Of The Market
Even if a power company wanted to build a nuclear reactor in
Connecticut, it remains an open question whether it could attract
financing and whether consumers would see benefits on their bills
under the current market system.

Legislation that Connecticut passed in 1998 deregulated electricity
generation. The law abolished the regulated system in which utilities
built plants and recouped their investment, plus a potential profit,
through electric rates that state officials set.

Under the reformed system, plants are built by developers who make
their money by selling the power into a wholesale market.

"The question becomes: Does anyone want to take that kind of risk?"
said Gordon van Welie, president and CEO of ISO-New England, which
produced the study in August showing that the current market wouldn't
work for nuclear expansion.

Power companies, an industry trade group said, could take "various
innovative" steps to build new reactors in states with deregulated
markets. One is pre-selling the power for decades to utilities that
deliver electricity to their customers.

"The jury is really out on it right now," said Garfield, the lawyer at
Day Pitney. "It is a very large capital investment for an enterprise
that does not have its cost recovery assured."

And whether more nuclear reactors would provide savings is unclear. In
New England, wholesale prices are set not by the cheapest or average
price of power. Rather, the last, most expensive plant needed to keep
the lights on — in most cases, a natural gas-fired unit — sets the price.

So even with more nuclear power, Olivier and others warn, Connecticut
ratepayers may not enjoy any of the cost savings unless the rules are
changed.

Back in Waterford, Dan Steward knows his views are controversial,
especially outside the Waterford area, where many residents work at
the plant, or in the nuclear submarine industry.

But he said, "At least I'll start the ball rolling."