Jason Taken
Associate Editor
Loyola University Chicago School of Law, J.D. 2019
Nuclear power last made front-page news approximately six years ago. Unfortunately for nuclear power, headlines on the subject more often than not represent times of trouble. In regaining the spotlight in the wake of the recent announcement to discontinue construction of the new AP 1000 reactors, clean energy advocates and companies with predominantly clean energy portfolios are making headlines again. The issue, this time, is money.
The economic viability of sustaining nuclear power
It is expensive to maintain, let alone construct, a nuclear power plant. The Nuclear Regulatory Commission (NRC) is responsible for the oversight, governance, and regulatory authority of the nuclear reactors in the United States. The NRC emphasizes the health and safety of the public, and sets forth necessary, but costly, requirements to ensure that nuclear plants meet its rigid standards. In fact, following Fukushima, nuclear power plants in the United States were required to go above and beyond previous analyzed accident scenarios and implement costly modifications to ensure an accident analogous to Fukushima would never happen on American soil.
As a consequence of innovation in power generation, cost-cutting, and technological advances, however, nuclear power could be starting to see the light at the end of the tunnel. The reliability and comparatively low environmental impact of this form of power generation suggests some long-term economic and environmental benefits. But competing incentives have people looking for another way.
As a result of these increasing costs, Illinois residents were recently impacted by legislation that saved two nuclear power plants from shutting down: Clinton Nuclear Power Station and Quad Cities Generating Station. The plants’ owner, Exelon Generation, planned to shut them down because of the continued revenue loss incurred from keeping the plants connected to the electrical grid. The lost revenue averaged approximately 700 million dollars over a 7-year period. The Illinois legislature saved the plants from closing. The economics behind the bill are not important here, but mentioning the bill highlights that while Illinois is among the first, they won’t be the last in passing this type of legislation. Similar legislation recently passed in New York. Pennsylvania is next. So, while the reliability of nuclear power electricity generation is high, the cost to maintain that reliability is also high. The power generation companies are not willing to continue footing the bill, and the backlash from some consumers may suggest that consumers are not willing to pay the premium for reliability either.
What’s changing?
The NRC has not widely changed the regulations or expectations imposed on nuclear plants much over the past decades. With an increase in the accessibility of technology, certain advances in cyber security and other security measures have been required, at a cost, to keep the plants within the guidelines designed by the NRC, and the plants ultimately safe. The most recent significant imposition on U.S nuclear facilities was the reaction, rightfully so, to the tragedy that occurred overseas in Japan resulting in a nuclear accident at Fukushima.
If regulations and impositions have not drastically increased, why are nuclear energy companies struggling to maintain the bottom line?
Not surprisingly, the low cost of other forms of not-so-clean energy (e.g., coal) and cheaper forms of cleaner energy (e.g., wind) have attracted consumers, and thus, the energy providers. During annual power auctions where power is auctioned to the lowest bidder, nuclear power plants are having difficulties auctioning power at a reasonable cost, placing additional financial burden on them.
What is there left to do? Deliver the “Nuclear Promise.”
The nuclear energy industry is reacting to this economic challenge by cutting superfluous requirements while remaining well within the regulations set forth by the NRC. The industry is calling it “Delivering the Nuclear Promise.”
The Institute of Nuclear Power Operations (INPO) in concert with the Nuclear Energy Institute (NEI) began releasing a series of “efficiency bulletins” that help scale back the superfluous requirements adopted by the nuclear industry (i.e., requirements that were established above and beyond the NRC’s requirements) to increase efficiency while keeping the rigid requirements in place, and ultimately reducing costs.
What does this mean for compliance?
As the nuclear industry begins to scale back self-imposed regulations and thus reduce margin to regulatory compliance, the NRC may consider reviewing current regulatory requirements to ensure that a low-margin approach to compliance meets the intent originally set forth when the regulations were initially established. Up until this point, nuclear facilities have incorporated a substantial margin to regulatory compliance in station procedures and policy, and as that substantial margin is reduced, the question of whether a review of the regulations is necessary becomes a relevant, and important inquiry.