WASHINGTON - The owners of the Vermont Yankee nuclear power plant in the northeastern United States were about to sell their 27-year-old facility last year when something remarkable happened - remarkable at least for that long-shunned industry.
Only recently, the nuclear power industry seemed dead in the United States. No new U.S. nuclear power plant has been built since the 1979 accident at Three Mile Island in Pennsylvania, and the Chernobyl disaster in 1986 reinforced the cloud of fear over the industry.
But with the escalation of competitive energy prices and a friendlier regulatory environment, the U.S. nuclear power option has reawakened, underscored by the outburst of bidding for generating plants like Vermont Yankee.
U.S. nuclear plants have increased their overall output by 25 percent over the past 10 years by reducing accident rates and shutdowns.
The plants now deliver 20 percent of the nation's electricity, and do so without discharges of greenhouse gases or air pollution, industry officials point out.
A few years ago, analysts predicted that many nuclear plant owners would not renew operating licenses, choosing instead to shut down the installations in favor of more economic natural gas-fired plants. Now, about 40 percent of the plants have announced plans to seek renewed licenses and twice that might apply, according to the Nuclear Regulatory Commission.
"We have even seen the first stirring of interest in the possibility of new nuclear-plant construction in the United States - a thought that would have been unthinkable even a year ago," the chairman of the regulatory commission, Richard Meserve, said last month.The industry's revival has set the stage for a critical debate about energy policies that will hold the key to its future. The Bush administration said nuclear power should be one of the cornerstones of the new national energy plan the White House is preparing.
Industry opponents, led by the Union of Concerned Scientists, said that the advancing age of American plants and the difficulty in recruiting skilled operators create constant issues of operational safety.
Control of nuclear plants is passing from traditional utilities to competitive generating companies, creating a risk that corners will be cut to increase profits, critics contend.
But a re-energized industry says its safety record since Three Mile Island speaks for itself. It is pressing the administration for tax incentives and regulatory help that would make old plants more profitable and future construction easier.
White House officials would not disclose what initiatives would be adopted by the task force headed by Vice President Dick Cheney.
But industry leaders expect the Bush administration late this year to approve a long-delayed, politically charged proposal to store hazardous radioactive wastes permanently in an underground site at Yucca Mountain, Nevada, in the western United States. The project, widely opposed in the state, could be authorized by Congress over Nevada's objections.
The administration would support renewal of the Price Anderson Act, which limits generators' liability from nuclear accidents, industry executives say. The federal law is to expire next year.
The industry also is asking that nuclear plants receive valuable financial credit for not emitting the kind of greenhouse gases discharged by fossil-fuel plants.
The shift in fortunes for nuclear power has several causes, most importantly, the sudden escalation of natural gas prices last year. In the late 1990s, gas had become the fuel of choice for new power plant projects because it burns much more cleanly and costs less than coal or oil.
But shortages caused wholesale gas prices to rise more than $10 per 1,000 cubic feet (28 cubic meters) at the beginning of winter, triple the levels of a year ago. Prices have since eased to about $5, but that still make gas-fired electricity costly enough for nuclear plants to compete with, said Angelina Howard, executive vice president of the Nuclear Energy Institute.
"We're very economically competitive," added Corbin McNeill, chairman of Chicago-based Exelon Corp., the largest operator of nuclear plants in the United States. "And the more natural gas prices go up, the more competitive we'll be."
The industry's prospects have also been helped by what Ms. Howard calls more effective oversight by the Nuclear Regulatory Commission over the last year and a half.
The commission has sped up procedures for relicensing existing nuclear power plants and last year granted a renewed 20-year license to the Calvert Cliffs Nuclear Power Plant in Calvert County, Maryland, operated by Baltimore Gas and Electric Co., taking a relatively short two years. The decision was upheld last year in the U.S. Court of Appeals for the District.
The impact of higher gas prices and an improved regulatory environment is apparent in the increase in nuclear power plant prices that so surprised Vermont Yankee's owners.
Two years ago, buyers were paying about $100 per megawatt to buy nuclear plants, said Paul Dabbar, vice president of J.P. Morgan Co., which is handling the Vermont Yankee auction. In March, Dominion Resources Inc., the Richmond-based energy conglomerate, paid $1.3 billion to buy the Millstone Nuclear Power plant from Northeast Utilities in Connecticut. The price for one of the Millstone units hit $791 per megawatt, eight times the average of just a few years before, Mr. Dabbar said.
Dominion and Constellation Energy Group Inc., the parent company of BG&E, both have indicated an interest in the Vermont Yankee plant."Power companies are beginning to see that nuclear plants provide a good source of diversity to mitigate the natural gas price risk," Mr. Dabbar said. Increasingly stiff air-quality regulations lie ahead for conventional power plants. "Nuclear power doesn't have to worry about that."
Critics charge that under the commission's new approach, opponents of nuclear power lose opportunities to challenge a project.
If the commission goes forward with a proposal that could limit public access to confidential company data, said David Lochbaum of the Union of Concerned Scientists in Washington, "the public can jump up and down, but there would be no leverage for meaningful dialogue."
Copyright © 2001 the International Herald Tribune
A new bidder for the plant showed up, ready to double the purchase price, followed by another bidder, and another. Vermont officials halted the sale and put the plant up for auction.