Nation's nuclear industry resurgence means brighter picture for Minnesota's nukes
Gregory A. Patterson
Star Tribune
Monday, June 18, 2001
The road leading to the Prairie Island nuclear plant in Red Wing is a dead end. Two years ago, that logistical detail was an apt metaphor for America's nuclear power
generating industry.
Not anymore.
The California electric energy crisis and interest from the Bush administration have ignited a new dialogue on power production that gives
nuclear energy an important role.
"There is a resurgence of interest in our nation's nuclear power program, and early, but very strong, stirrings of an American nuclear
renaissance," Michael Sellman told a gathering of nuclear engineers this spring. Sellman is CEO of Nuclear Management Co. (NMC), which
manages the Prairie Island facility.
The nuclear industry is changing, too. Minneapolis-based Xcel Energy Inc. still owns the Prairie Island plant, as well as the one in Monticello --
the only two nuclear facilities in Minnesota. But the creation of NMC to run nuclear facilities owned by Xcel and other utilities marks an
industry trend that many believe will result in a different kind of nuclear facility -- one that is owned and operated by a company whose only function is producing
nuclear power.
Some industry observers believe that this will lead to concentrating the nation's 103 nuclear reactors -- which are spread over 31 states and generate 20 percent of the
country's electricity -- in the hands of about 10 companies. Optimistic backers of nuclear power predict that the industry will begin construction on a nuclear power
plant in this decade.
A variety of national polls show that support for nuclear power is far from unanimous; in some polls, fewer than half the respondents approve of it. But virtually all of
the recent polls have found public opinion shifting in favor of nuclear power.
"Support for new nuclear plants is on the rise," said Michael Wadley, senior vice president of Government Affairs and Business Development for NMC.
For a host of reasons, it is unlikely that Minnesota will pioneer new plant construction. But the turning tide makes it more likely that the state's nuclear facilities in
Prairie Island and Monticello will get the legislative and regulatory support needed to continue operating well into the next decade.
As Sellman and some experts see it, the nuclear industry's prospects have come full circle. The twin forces of energy deregulation and environmental concerns have
been considered the biggest threats to the future of nuclear power.
Conventional thinking was that the cheaper and more reliably operating natural gas plants and renewable forms of energy would win out over nuclear power. There
was an expectation that nuclear operators would fight to keep their plants online, struggling especially with contaminated waste disposal, but ultimately would fail to be
relicensed to operate at the end of their initially approved periods.
Instead, the promise of a vastly deregulated energy arena has caused the nuclear operators to increase their efficiency to unprecedented levels. Concerns over fossil fuel
emissions contributing to global warming have given nuclear proponents room to press the environmentally favorable aspect of nuclear power: Its reactors don't release
carbon dioxide into the environment.
However, no matter how encouraging these developments are to the nuclear industry, there is nearly universal agreement that unless the waste issue is resolved at the
national level, the industry will have a rough time moving forward. The industry also must sway public sentiment and prevail against nuclear opponents.
Nukes in the forest
The irony of the danger posed by nuclear plants is that they are almost always in remote, natural settings, near a bounty of water. Many have
gentle, outdoorsy names -- Peach Bottom, Crystal River, Beaver Valley. Just beyond their fences and barricades often are quiet woods or a
seashore, butterflies and deer and rare birds.
By contrast, just inside the gates at the Prairie Island nuclear facility is an eerily daunting space. About the size of a football field, it is surrounded
by 20-foot-high earthen barriers whose steep slopes end in a shallow trench. Inside the trench stand 12 white, rounded obelisks.
The containers, called casks, each hold 40 spent fuel rods that constitute the most immediately dangerous industrial waste in Minnesota. The used fuel assemblies had
sat in the plant's indoor storage pool for 15 years before being moved to the casks; the plutonium inside them will be dangerously radioactive for at least 10,000 years.
Girding for battle
"We're getting organized," girding for battle over a revival of nuclear energy, said George Crocker, executive director of the North American Water Office, an
organization that opposes nuclear power and promotes energy conservation and use of environmentally friendly energy sources. He said his group is "revisiting the
constellation of organizations" it helped assemble to oppose Prairie Island's successful bid for approval to store spent fuel rods in above-ground casks after it ran out of
space in its storage pool.
Crocker and other nuclear opponents would be going up against an industry that is reorganizing itself to survive deregulation, which pits energy producers against each
other to provide the best bargain for consumers.
According to figures from the Nuclear Energy Institute, the industry is coming off several strong years of improved performance. Production costs of nuclear-generated
electricity fell to 1.83 cents per kilowatt hour in 1999 -- lower than those for coal, oil or natural gas. That performance means that production costs have declined by
45 percent since 1987.
A key goal for the industry has been to lower the amount of down time for nuclear reactors during refueling or repairs. The biggest target is the refueling process, which
takes a reactor out of operation for an average of 35 days. NMC says it will attempt its first refueling outage of fewer than 30 days next year.
Costly downtime
The Nuclear Energy Institute says it costs $300,000 to $500,000 a day for a plant to go offline for refueling or maintenance.
As NMC's Wadley explains it, plant operators have improved with experience. Nuclear plants "are quite unique assets" that require unique skills
to operate and maintain, Wadley said.
Currently, NMC operates six nuclear plants, with a total of eight reactors, owned by five utilities in the Upper Midwest. Each of the utilities
continues to own its facilities, which are operated by NMC, and each utility owns a piece of NMC.
NMC's goal is to become a private company, owning all its reactors. But to do that, it will need to be nearly twice as large as it is now -- with a generating capacity of
10,000 megawatts vs. the current 4,500.
Some industry analysts support the notion of a pure-play nuclear company. "When [nuclear plants are] put together in sufficient number and diversity, [that kind of
company] would clearly be viewed as favorable" by the investment community, said Steven Fetter, managing director of the global power group at Fitch, a New York
City bond rating agency.
Perhaps the industry's strongest argument for continued existence is the current electric power crisis in California.
Last year, the Nuclear Regulatory Commission approved license renewals for five nuclear reactors. Over the next several years, dozens more reactors are expected to
seek approval that would allow them to operate some 20 more years.
Xcel Energy, which owns the only nuclear facilities in Minnesota, also is looking more positively on the prospect of relicensing. The operating license for the Monticello
plant expires in 2010, and the licenses for the two reactors at Prairie Island expire in 2013 and 2014. Currently, a Minnesota law forbids new plant construction until the
industry and federal government reach a permanent solution about the disposal of radioactive waste.
"If the plants are safe and economical and reliable and we have a waste solution ... then we would look very favorably at license renewal, just like many others have in
the industry," said Scott Northard, Xcel's nuclear assets manager.
"There's nothing that we have found at our plant that would preclude us from asking for 20 years -- at least 20 years," Northard continued. "What we've found is that
over the years we've maintained these plants in such a high state of quality -- we replace equipment routinely before it wears out, so the plants are kept in a like-new
condition virtually all the time because of the nature of our business."
But Xcel has a more immediate problem than relicensing: It needs legislative approval to store more of the highly radioactive spent-fuel assemblies in above-ground
containers past 2007. That's when Xcel most likely will run out of casks, because state law allows it to fill only 17 containers. Twelve are filled so far.
Only 17 casks
That also is about the time that the amount of electrical power available plus the legally required reserve amount will equal projected demand in
Minnesota, utility industry officials say.
Come 2007, the region's power demand is projected to be dependent on its reserve supply, according to the Mid-Continent Area Power Pool
(MAPP), the industry consortium that oversees the electric power supply in the Upper Midwest.
"If we lost 1,100 megawatts, [roughly the capacity of the Prairie Island generating station], we would be cutting severely into our reserve margin,"
said Gordon Peitsch, MAPP's director of technical services.
What's more, "In 2010, we'll need another 3,500 megawatts of additional capacity," Peitsch said. But he was careful to point out that neither he
nor MAPP has a formal viewpoint on nuclear generating or relicensing issues.
Two Minnesota legislators have introduced a bill that would allow additional storage of radioactive waste for the next 20 to 30 years at Prairie Island in Red Wing and
in Monticello. The bill didn't get much legislative attention, but its sponsors, Sen. Mark Ourada, R-Buffalo, and Rep. Loren Jennings, DFL-Harris, said they intend to
take up the subject in the next legislative session.
Jennings plans to talk this summer to some who oppose the bill, including the Prairie Island Tribal Council of the Mdewakanton Dakota. The council has protested the
storage of high-level nuclear waste at the facility, which is adjacent to its reservation.
Jennings said he is confident of passage because he believes public opinion has shifted toward nuclear power.
Though the prospects for continued operation of Minnesota's three nuclear reactors are far better than the prospects for building new ones here, the industry is hopeful.
And it has made progress developing three advanced nuclear reactors that have received preliminary approval from the Nuclear Regulatory Commission.
-- Gregory A. Patterson is at gpatterson@startribune.co.
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