U.S. nuclear industry weighs costs of safety reforms
NEW YORK/WASHINGTON (Reuters) - The U.S. nuclear industry's top cop will weigh major changes in how it regulates the country's 104 reactors after Japan's Fukushima disaster, a move that will help shape the future of the power source and could lead to significant cost increases.
A task force report published on Wednesday has recommended the Nuclear Regulatory Commission look at a fundamental shift in how it plans for catastrophes like the earthquake and tsunami that hit Japan in March.
Critics and proponents of nuclear power had broadly similar reactions: while the proposal was more far-reaching than many expected, it stopped short of recommending a major overhaul and focused on incremental improvements that would unify a patchwork of previous regulations and recommendations.
The big question now is which ideas the five-member NRC accepts, and how quickly it proceeds to reform an industry where plant retrofits can cost millions of dollars. It could affect the viability of plans for new plants that already face tough competition from cheap natural gas.
"Done poorly, they could significantly increase costs in the current operating fleet without improving safety one iota," said Margaret Harding, a former vice president at GE-Hitachi responsible for quality, and now an industry consultant.
"Done well, and they will get at the real issues, eliminate the vagueness in the regulation, and improve safety. Getting it right will not be easy or quick," Harding said.
NRC HEAD WANTS TO MOVE QUICKLY
The commission's chairman wants to avoid the kind of time-lag seen in the past when the agency has had to make major changes for the highly technical, deliberative industry.
Gregory Jaczko, the contentious head of the NRC who worked for industry critics before his appointment, said he hopes his fellow commissioners can review the report and make decisions within three months, he told Washington-based news organization The Hill.
The world is watching. Some countries, including Germany, have pulled away from nuclear power after Fukushima.
The United States is home to the world's largest nuclear industry and many countries evaluating the power source look to the NRC as a model for safety standards.
"Even though the task force's report seems more far-reaching than any other global nuclear safety updates that have been considered so far, it is probably merely addressing the obvious, rather than revolutionizing the U.S. nuclear power market," said Claudia Mahn, an energy analyst with IHS Global Insight.
The NRC's commissioners will discuss the recommendations at a public hearing with the task force on July 19. That is expected to kick off a broader six-month review during which the NRC will likely invite industry and public participation.
BACK-UP POWER KEY CONCERN
The nuclear industry was already struggling to expand with high construction costs and the competitive threat from cheap and abundant supplies of natural gas. Utilities and plant operators such as Exelon, Entergy, and PG&E could be affected by new regulatory changes.
The task force found no immediate safety issues, but focused on how well plants can cope when earthquakes, floods or other disasters wipe out power supplies needed to keep radioactive fuel cool.
The U.S. industry has a patchwork of mandatory regulations and voluntary guidelines, and the task force sought to streamline them.
Aging plants as well as the 23 reactors that share the same design as Fukushima, Mahn said.
On its own, the industry had already planned to build regional emergency response centers, a plan that could cost each of the reactors $9 million to $10 million over the next decade, she noted, citing industry figures.
The Nuclear Energy Institute said it is unlikely the report will lead to any plant shut-downs.
"It's premature to determine how expensive. There will be some costs incurred as a result of the enhancements," Tony Pietrangelo, the group's chief nuclear officer, told Reuters Insider.
Spokesmen for plant operators Exelon and Dominion Resources said they were still studying the report.
CRITICS FIND NEW AMMUNITION
Environmental groups and other nuclear power critics said the recommendations support their concerns that the NRC should put the brakes on approving licenses for plants.
"The report's correct focus on the impact of severe accidents and lack of coherent regulations in dealing with them necessitates a revision of current regulations as soon as possible," said Tom Clements of Friends of the Earth, which is fighting new reactors planned for the southern United States.
An engineer who has worked on reactors similar to the Fukushima plant and now consults for environmental groups said the report might mean plants can avoid design changes.
"These NRC recommendations are plain vanilla and are designed to avoid the costly modifications to really fix the problem," said Arnie Gundersen of Fairewinds Associates Inc of Burlington, Vermont.
The Union of Concerned Scientists, a group that advocates for nuclear safety, issued two dozen of its own recommendations on Wednesday, emphasizing the regulator should take a broad and fast approach.
"Fukushima should shake the NRC out of its complacency," said David Lochbaum, director of the group's nuclear safety project.
(Additional reporting by Ayesha Rascoe, Mari Saito, Tom Doggett and Emily Stephenson in Washington, Eileen O'Grady in Houston; Editing by Lisa Shumaker)