The four setbacks in three days include: 1) the cancellation of two proposed new reactors at South Texas Project, because they violate U.S. law against foreign ownership of nuclear power plants; 2) Southern California Edison's threat that if NRC does not allow it to restart operations at its crippled San Onofre nuclear power plant, it will permanently shutdown both reactors there; 3) Duke Energy's cancellation of two proposed new atomic reactors at its Shearon Harris nuclear power plant in North Carolina; and 4) Florida's amendment to its previously highly permissive "advance cost recovery" or "Construction Work in Progress" law, via which ratepayers have been gouged to pay for proposed new reactors, when there is no guarantee the proposed new reactors will ever actually get built or generate electricity.

Bradford also added the May 7th shutdown of Dominion's Kewaunee atomic reactor in WI -- despite the 20 years of operating license still left to it -- as another example of the "worst week since Fukushima" for the U.S. nuclear power industry.

Both Bradford and Cooper spoke out against federal nuclear loan guarantees for than once during the press conference as throwing good money after bad on a failed "Nuclear Renaissance" now in headlong retreat.

Peter Bradford

As reported by ScienceDaily in an article entitled "U.S. May Face Inevitable Nuclear Power Exit,"  the Bulletin of Atomic Scientists (BAS) has concluded its three part "Nuclear Exit" series with a look at the United States. The previous two installments examined the nuclear power phase-out in Germany, and the nuclear power status quo in France.

The BAS U.S. coverage features former U.S. Nuclear Regulatory Commission Commissioner, Union of Concerned Scientists board member, and Vermont Law School professor Peter Bradford's "How to close the U.S. nuclear industry: Do nothing," which concludes that, without massive taxpayer or ratepayer infusions, almost all proposed new reactors will not happen, and currently operating reactors will permanently shutdown by mid-century, unless the NRC rubber-stamps 80 years of operations (as opposed to the current, already risky 60).

In a section entitled "Picturing a U.S. phase-out," Bradford writes:

"The countries that have recently decided to phase out nuclear energy have done so by governmental fiat, complete with statutory deadlines both for individual reactors and for nuclear power in general. But no such sweeping action is really necessary in countries that have chosen to procure power generation through market mechanisms. The US experience demonstrates that absence of governmental intervention will create a glide path, determined in part by how long a country is prepared to allow its oldest reactors to operate, but in fact by the interplay between gas-driven electricity prices and the point in time at which older plants must make significant capital investments." (emphasis added)

Bradford points out that "By this standard, units at Crystal River and San Onofre--currently closed by major equipment failures--appear to be serious shutdown candidates, though they may survive, because they are located in Florida and California, respectively, states in which regulators can override market verdicts and impose their repair costs on customers."

In fact, Duke/Progress has thrown in the towel on Crystal River, announcing that it is now permanently shutdown. And Friends of the Earth, along with a groundswell of grassroots anti-nuclear activism in southern California, is doing all it can to keep San Onofre Units 2 and 3 shutdown for good, as well.

A spokesman for Dominion Nuclear admitted that the "purely economic reasons" which led to the utility's decison to close its Kewaunee atomic reactor on the Lake Michigan shoreline in Wisconsin -- the first atomic reactor shutdown announcement in 15 years in the U.S. -- was the inability to make needed, major safety repairs andturn a profit, given the competitive electricity market.

And Entergy Nuclear's brand new CEO, Leo Denault, admitted to Reuters that numerous of his "dirty dozen" atomic reactors -- especially the merchant plants (those in deregulated, competitive electricity markets) -- face tough economic challenges, due to costly upkeep (a.k.a., essential safety-significant repairs and component replacements).

Reuters reported: "[Denault] said some plants are in the more challenging economic situations for a variety of reasons, including 'the market for both energy and capacity, their size, their contracting positions and the investment required to maintain the safety and integrity of the plants.'" (emphasis added)

At its Palisades atomic reactor on the Lake Michigan shore in southwest Michigan, Entergy has chosen to foregonumerous major, needed repairs (such as replacing the badly corroded reactor lid; replacing the deteriorated steam generators, for the second time in the plant's history; dealing with the worst embrittled reactor pressure vessel in the U.S.; making needed fire protection upgrades, etc.) for six long years now, apparently in order to "balance the books" -- that is, to prioritize profits (and executive salaries, and shareholder returns) over public safety.

Photo by Tom Clements, Alliance for Nuclear Accountability (ANA)

As Tom has described it: the reactor pressure vessel (RPV) for the chronically delayed Vogtle AP1000 reactor construction project near Waynesboro, Georgia sits stranded and seemingly unprotected in the port of Savannah. The special railroad car carrying the 300-ton vessel had unknown mechanical problems on December 15 on exiting the port.  The NRC has said that the vessel only got one-quarter mile before a sound was heard and the car stopped.  Plans by Westinghouse and Southern Company to move the vessel are unknown. It is also unknown if the railroad car can be repaired and used or if the railroad company which owns the line is concerned that the rail car might break down again on its line in an in accessible place.  Meanwhile, the apparently unguarded reactor might be subject to sabotage and sits in apparent violation of NRC quality assurance and "administrative control" regulations.

In Feb. 2010, President Obama himself announced the award of $8.3 billion in federal loan guarantees for the two proposed new AP1000s at Vogtle, GA. However, due to the nuclear utilities' reluctance to risk any of their own "skin in the game," the offer has yet to be finalized, nearly three years later!

"Burning Money" image by Gene Case, Avenging Angels

"Just a few years ago, the US nuclear renaissance seemed at hand.  It probably shouldn’t have been.  Cost overruns from Finland to France to the US were already becoming manifest, government guarantees were in doubt, and shale gas drillers were beginning to punch holes into the ground with abandon." (emphasis added)

He concludes that "the nuclear renaissance may be largely over before it started," with not only the vast majority of proposed new reactors in the U.S. being cancelled, but even paid-off old reactors like Kewaunee in Wisconsin being permanently shutdown due to crushing economics -- such as the expense of major, vitally needed safety repairs at the 40-year old reactor.

Kelly-Detwiler cites the "takes too long," "costs too much," and "bet-the-farm" nature of nuclear power for the "failure to launch" of the nuclear relapse.

Regarding that last point, Kelly-Detwiler writes:

'So it appears that the nuclear renaissance may be largely over before it started.  And yet, many projects have not yet been canceled, with utilities and ratepayers accepting ever more risk in order to rescue sunk costs. In many cases, these costs have soared or will soar into the billions. As risk management expert Russell Walker of the Kellogg School of Management is quoted as saying in the Tampa Bay Times “When the stakes get higher, it gets harder for organizations to walk away…this happens a lot.  It’s the same problem a gambler has: If I play a little longer, it’ll come around.” '

However, he points out that the only proposed new reactors that seem to be moving ahead are those privileged by Construction Work in Progress (CWIP) funding. He writes:

'In Georgia, Vogtle Units 3 and 4 (owned jointly by a number of utilities, including Georgia Power) appear in somewhat better shape, but issues have cropped up there as well.  Customers currently pay $10 per month in advance to cover financing associated with the two 1,117 MW units.  Georgia Power is allowed by legislation to recover $1.7 bn in financing costs of its estimated $6.1 bn portion of the $14 bn plant during the construction period.  However, there have already been some cost problems, and Georgia Power is disputing its responsibility to pay $425 million of overruns resulting from delays in licensing approvals.  Total cost excesses to all partners total $875 mn.  The two units were expected to come online in 2016 and 2017, but in a Georgia PSC meeting in December, an independent monitor noted that expected delays of fifteen months are largely as a result of poor paperwork related to stringent design rules and quality assurance.  Those delays will likely continue to cost more money...

With low natural gas prices, efficient combined cycled turbines, more efficient renewables and a host of more efficient end-use technologies, that’s a bet fewer and fewer seem wiling to take.  Unfortunately for ratepayers at some utilities, they are at the table whether they like it or not…' (emphasis added)

If the op-ed's title is meant to imply that so-called small modular reactors might still save the day for the retreating nuclear power industry, it must be pointed out that the supposed justification for giant-sized proposed new reactors (such as the AP1000, at 1,100 MWe; the ESBWR at 1,500 MWe; the EPR at 1,600 MWe; etc.) was "economies of scale." Since small modular reactors represent the opposite end of the spectrum, it stands to reason these would be even more expensive than their super-sized, failed siblings.

In a classic February 14, 1985 piece entitled “Nuclear Follies,” Forbes wrote: 

"The failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster on a monumental scale. The utility industry has already invested $125 billion in nuclear power, with an additional $140 billion to come before the decade is out, and only the blind, or the biased, can now think that the money has been well spent. It is a defeat for the U.S. consumer and for the competitiveness of U.S. industry, for the utilities that undertook the program and for the private enterprise system that made it possible.”

Harvey Wasserman

He points out that Kewaunee may be but the first domino to fall, describing the impact of "low gas prices, declining performance, unsolved technical problems and escalating public resistance" at numerous other old, age-degraded, troubled reactors across the U.S., including San Onofre, CA; Crystal River, FL; Cooper and Fort Calhoun in NE; Vermont Yankee; Indian Point, NY; Oyster Creek, NJ; and Davis-Besse, OH.

But Harvey also points out the momentum applies to new reactors as well, such as at Vogtle, GA and Summer, SC, as well as overseas, in the wake of Fukushima, not only in Japan, but also India, and even Europe, led by Germany's nuclear power phase out.

Harvey writes about the flagship new reactors proposed in the U.S.:

"The two reactors under construction in Georgia, along with two in South Carolina, are all threatened by severe delays, massive cost overruns and faulty construction scandals, including the use of substandard rebar steel and inferior concrete, both of which will be extremely costly to correct.

A high-priced PR campaign has long hyped a "nuclear renaissance." But in the wake of Fukushima, a dicey electricity market, cheap gas and the failure to secure federal loan guarantees in the face of intensifying public opposition, the bottom may soon drop out of both projects.

A proposed French-financed reactor for Maryland has been cancelled thanks to a powerful grassroots campaign. Any other new reactor projects will face public opposition and economic pitfalls at least as powerful."

The Vogtle 3 & 4 reactors (proposed new Toshiba-Westinghouse "Advanced Passive" 1,100 Megawatt-electric (MWe) reactors, or so-called AP-1000s) were offered an $8.3 billion federal loan guarantee by the U.S. Dept. of Energy (DOE), announced by President Obama himself in Feb. 2010. Yet, the deal has never been inked. Apparently, Southern Nuclear is unwilling to pony up a mere few tens of millions of dollars, the secretive, small amount of "skin in the game" Obama's Office of Management and Budget has required in the form of a "credit subsidy fee" before the massive taxpayer-backed nuclear loan guarantee can be finalized. 

Similarly, the Calvert Cliffs 3 proposed new French Areva "Evolutionary Power Reactor" (or EPR, a 1,600 MWe design) in Lusby, MD was a lead candidate for a federal nuclear loan guarantee. But Obama's OMB required an 11-12% credit subsidy fee on the $7.5 billion nuclear loan guarantee, amounting to $880 million of "skin in the game." In Oct. 2010, Baltimore-based Constellation Energy indicated it was unwilling to pay that much, and so withdrew its involvement in the project, leaving Electricite de France as the sole partner. But foreign ownership of an American atomic reactor is not permitted by the Atomic Energy Act, so the project appears in its last days, as EDF has failed to find an American partner to replace Constellation.

Another lead candidate for a federal nuclear loan guarantee was the South Texas Project Units 3 & 4, proposed new General Electric-Hitachi ABWRs (so-called "Advanced Boiling Water Reactors," of 1,300 MWe each). However, partners in the proposal included Tokyo Electric Power Company (TEPCO), as well as Toshiba, and the Japan Bank for International Cooperation (JBIC). TEPCO's Fukushima Daiichi nuclear catastrophe, which began on 3/11/11, spelled doom for the South Texas new reactors. The lead U.S. partner, NRG Energy of Princeton, NJ, largely and quickly threw in the towel.

Harvey, a senior advisor to Greenpeace USA and Nuclear Information and Resource Service (NIRS), will address "From Fukushima to Fermi-3: Getting to Solartopia Before It's Too Late" in Dearborn, MI on Dec. 7th at the official launch event for the new organization, the Alliance to Halt Fermi-3.

U.S. Rep. Fred Upton (R-MI)

Specifically, those subsidies took the form of federal nuclear loan guarantees, making federal taxpayers the co-signers on loans for new nuclear projects. $18.5 billion was designated for new atomic reactors, while $2 billion was designated for new uranium enrichment facilities. Another $2 billion was later added for new uranium enrichment, from a "slush fund" of energy loan guarantees administered by the U.S. Department of Energy.

In Feb., 2010, President Obama himself announced the awarding of $8.3 billion in nuclear loan guarantees for two proposed new Toshiba-Westinghouse AP1000 reactors targeted at Vogtle, Georgia. No other new nuclear loan guarantees have yet been awarded. But, in the aftermath of the Solyndra solar loan guarantee scandal, the Vogtle nuclear loan guarantee has yet to finalized. Apparently, Southern Nuclear is unwilling to pony up a mere tens of millions of dollars of its own (or other private investors') money required by Obama's Office of Management and Budget as "skin in the game." Thus, none of the $22.5 billion in new nuclear loan guarantees approved five years ago has actually been disseminated.

The Kalamazoo Gazette reported:

"...The candidates also disagree on what role the government should have in the energy industry. During Monday’s debate, Upton said he supports removing subsidies for all energy companies, including those that produce oil and gas.

'Let's talk about taking those subsidies away,' Upton said. 'Let the real cost of it be out there and let them compete on an even playing field.'..."

A Jackson Citizen Patriot columnist commented:

"...Rep. Fred Upton, R. Kalamazoo, said he 'supports removing subsidies from all energy companies.' If so, he should start with the nuclear power in his district. The federal government subsidizes the nuclear industry more than any other. The Union of Concerned Scientists calculates that it would be cheaper for the federal government to purchase electricity and give it away than to subsidize nuclear power!"

Beyond Nuclear has published a number of exposés on Congressman Upton over the years, including a two page summary, a full 22 page long report, as well as details of the nuclear power industry related Political Action Committee and individual campaign contributions he has recieved in return for his extreme pro-nuclear advocacy on Capitol Hill.

"Burning Money" image by Gene Case, Avenging Angels

Remarkably, Southern Co. has been asked for a mere $17 to $52 million of "skin in the game," in exchange for $8.3 billion in federal taxpayer-backed nuclear loan guarantees for Vogtle Units 3 & 4 -- proposed Toshiba-Westinghouse AP1000s (1,100 Megawatt-electric "Advanced Passive" pressurized water reactors). If Southern and its partners default on their loan repayments, the federal taxpayer will be left holding the bag. To make matters worse, taxpayers are not only guaranteeing the loans, they are also providing the loans. The source of the loans, the U.S. Finance Bank, is federal taxpayer funded. Despite the nuclear loan guarantees, private investment banks have not touched the financially risky project. 

The "moral hazard with a radiological twist" represented by this risky financial scheme puts 15 times more taxpayer funding at risk than was lost in the Solyndra solar loan guarantee scandal ($535 million); NIRS executive director pegs the default risk of Vogtle 3 & 4 as some 50 times higher than Solyndra's.

Despite such favorable terms, President Obama's Office of Management and Budget is still wary of the deal, offering opponents an opportunity to kill it. The "sweetheart deal" revealed by the unearthed documents has prompted Harvey Wasserman of Nukefree.org to ask, "Why should nuke loan guarantees cost less than student or home loans?"

"Burning Money" image by Gene Case, Avenging AngelsA coalition of environmental groups, including North Carolina Waste Awareness and Reduction Network (NC WARN), has issued a press release decrying a nearly billion dollar cost overrun at the Vogtle 3 & 4 new reactor construction project in Georgia. The groups warn that further cost increases are likely, due to rushed design and construction that has led to errors, as in sub-foundation grading, rebar quality assurance, and even radiological containment "shield building" design and construction.

Such cost overruns, as well as construction schedule delays, could lead to the Vogtle 3 & 4 project defaulting on its loan repayments. This puts $8.3 billion in federal taxpayer nuclear loan guarantees (and even the actual loans themselves, since they come from the taxpayer-funded U.S. Finance Bank) at risk. $8.3 billion is 30 times the amount taxpayers lost to the Solyndra solar loan guarantee scandal.

The coalition's expert witness Arjun Makhijani, President of the Institute for Energy and Environmental Research (IEER), said: “Southern Company rushed into this project, as evidenced by the many requests for modifications of the license and early technical difficulties and problems including failure of ‘some details’ of early construction to conform to the Design Control Document, according to Georgia Power’s filing with the Securities and Exchange Commission.  Indeed, a part of the cost increase of $900 million appears to be attributable to overcoming delays and rushing the project again despite construction non-compliance.  The cost increase should not be a surprise; rather it is déjà vu all over again.  Rushing nuclear power reactors is not prudent and stockholders and/or the vendors, not ratepayers, should bear the burden of such costs.  It would be much better if construction were suspended until all design issues were resolved.”

"Burning money" image by Gene Case, Avenging Angels

On March 11, 2011, the Union of Concerned Scientists unveiled two major studies, one by David Lochbaum about the near misses at U.S. reactors in 2010, the second by Doug Koplow, a comprehensive analysis of half a century of taxpayer and ratepayer subsidies to the nuclear industry. The long scheduled press conference was eclipsed by the Fukushima Daiichi nuclear catastrophe which began just hours earlier. In this year's annual review report, "Living on Borrowed Time," Lochbaum documented that 5 of 15 near misses at U.S. reactors in 2011 took place at Entergy owned (Palisades, MI X 2; Pilgrim, MA X 2) or operated (Cooper, NE) plants. Sanders and Alexander point out that, for any catastrophic radioactivity release at a U.S. reactor causing more than $12 billion, U.S. taxpayers would be looked to for picking up the tab, under the Price-Anderson Act.