Exempt from normal market rules – the nuclear zomby industry

It’s a testament to how exempt nuclear power appears to be from ordinary market rules.

Nuclear Infant Zombies? City Watch by Peter Dykstra 30 Jul 2013
Perhaps the oddest thing about nuclear power’s journey through American history is that we can’t seem to decide whether nukes are dying, being reborn, or walking around as zombies.

On the one hand, nuclear plants have had a bad-news few years. In June, Southern California Edison announced that it would permanently shut its trouble-plagued reactors at San Onofre, which powered 1.4 million homes in the region. By September, the plant will have laid off nearly two-thirds of its 1,500 workers. (The plant was already doomed by a legacy of breakdowns and failed fixes when the Fukushima disaster in Japan persuaded many Californians it posed a threat to the 8.5 million people who live within 50 miles of it.)

This spring, Dominion Resources closed its Kewaunee nuclear plant south of Green Bay, Wisconsin. The plant was in good working order, but falling energy prices made Kewaunee not worth the trouble. (Ironically, Dominion had just received a hard-fought renewal of its operating license for the plant.) …….

The industry’s origins date to the 1950s, when “too-cheap-to-meter” nuclear energy was touted as a sidekick to the H-bomb and a mascot for the Cold War. …..

, Wall Street also noticed that nuclear plants were not the financial performers they were cracked up to be. After the near-disaster at Pennsylvania’s Three Mile Island, financial interests in new nukes went into cold shutdown.

As Forbes put it in 1985, “The failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster on a monumental scale. … 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.”

Chernobyl’s actual disaster seven years later put an exclamation point on the nuclear retreat…..

Five years ago, the Nuclear Regulatory Commission saw a spree of new nuclear reactor license applications, and in early 2012 it gave approval for the first new plant in 30 years. Southern Company broke ground on two reactors at its existing Plant Vogtle, near Augusta, Georgia. Echoing an old theme, Southern CEO Thomas Fanning said the plants would provide “cheap, reliable power” for years to come.

That all sounds good, in theory. But a couple of footnotes about the “cheap, reliable” part: Southern is looking to have its customers cover what are known as “construction work in progress” costs. In other words, while the industry is willing to profit from its investments in new facilities, if there are losses, they will be picked up by the ratepayers. The Vogtle project is believed to be somewhere between $700 million and a billion over budget already, and 18 months behind schedule.

Has that discouraged government backers? Far from it. The Obama Administration offered Southern $8.3 billion in loan guarantees for the plant, an offer still awaiting final negotiation and acceptance. If you’re keeping score, that’s about 16 times what the White House lent to the ill-fated, crony-infested Solyndra solar venture. Obama has gotten criticized for “picking winners and losers” for Federal subsidies of solar power, but there is no similar uproar over the $8-billion loan guarantee for a new nuclear plant that is already running into trouble……

The pitch of greenhouse-gas-free energy still seems to be powerful. Both of President Obama’s energy secretaries, the departed Nobel Laureate Steven Chu and his successor, nuclear physicist Ernest Moniz, are industry supporters….The banner across the front of the Nuclear Energy Institute’s website shows a family running, Sound Of Music-style, across a green meadow beneath a blue sky and the words “NUCLEAR Clean Air Energy.”

Still, all that waste has to go somewhere……nuke plant operators appear to be permanently stuck with “temporary” storage of their waste at their plants.

So is nuclear power back? As of 2013, only four new reactors have broken any sort of ground. But never count out nukes. In most endeavors, there’s a three-strikes-and-you’re-out ethic. Nukes, by contrast, are still batting on strike 17. It’s a testament to how exempt nuclear power appears to be from ordinary market rules. So is nuclear power born, dying, or zombie? Hard to say. But whatever the answer is, it’s probably scary.