The future of nukes past

While new laws concerning greenhouse-gas emissions and solar power have made headlines in recent weeks, a bill that has passed through the Legislature with little fanfare may answer a question critical to California’s energy future: Can the state live without nuclear power?

The bill, Assembly Bill 1632, pertains to the state’s two remaining nuclear power plants, Diablo Canyon and San Onofre, located respectively near San Luis Obispo and San Diego, along the Central and Southern California coasts. If signed by the governor, the legislation requires the California Energy Commission to weigh the costs and impacts associated with nuclear waste accumulating at the two facilities against the state’s ongoing energy needs.

The fate of Diablo Canyon and San Onofre—and perhaps the future of nuclear power in the state—hangs in the balance. Tipping the negative end of the scale is the ongoing lack of a federal repository for nuclear waste. Tipping the scale in favor of nuclear power is the diminishing supply of natural gas, which currently generates 38 percent of the state’s electricity. It is by no means a black-and-white issue, explained James Boyd, one of five members who make up the CEC.

“I’m torn,” he said. “I won’t say nuclear power has no role in our future. I don’t know. For me, the overwhelming concern is the waste problem, as it is for many people.”

In 1976, California placed a moratorium on the construction of new nuclear power plants because a federal high-level radioactive-waste repository had not been established. That remains the case today. Although the U.S. Department of Energy has approved Nevada’s Yucca Mountain as the site for a national repository, the decision continues to be bogged down by controversy and litigation. High-level waste at Diablo Canyon and San Onofre continues to be stored on site.

That’s of particular concern to Rochelle Becker, executive director of the Alliance for Nuclear Responsibility, headquartered in San Luis Obispo. The 2,164 highly radioactive fuel-rod assemblies stored at Diablo Canyon in ponds designed to hold just 570 assemblies weigh heavily on her mind.

“The goal of the alliance is to stop production of high-level radioactive waste that’s being produced and stored on our coast,” she said.

Shutting down Diablo Canyon and San Onofre would achieve that goal. Short of that, Becker hopes to prevent both plants from re-licensing through the Nuclear Regulatory Commission, the federal agency that governs nuclear power in the United States. Under current NRC licensure, the two facilities are allowed to operate into the 2020s. Both plants are gearing up to renew their licenses to operate well beyond that date.

“If PG&E is allowed to do this, the state will lose any ability to have oversight of the license application,” Becker said. PG&E owns and operates Diablo Canyon; Southern California Edison runs San Onofre. Because licensing occurs at the federal level, once the process has begun, the state will have little say in the matter. As Becker sees it, the NRC will rubber-stamp the applications.

“The NRC never met a nuclear plant it didn’t like or a license application it didn’t approve,” she said. That’s an observation seconded by Truman Burns, senior regulatory analyst for the Division of Ratepayer Advocates, the department within the California Public Utility Commission that, among other things, attempts to ensure energy consumers aren’t gouged by utilities.

“I’ve yet to see the NRC turn down anyone for re-licensing,” Burns said. Though neither plant has applied with the NRC so far, PG&E has asked its ratepayers for $19 million to study the feasibility of re-licensing Diablo Canyon. Both PG&E and Southern California Edison have embarked on replacing steam generators at their facilities at a cost estimated to be as high as $800 million each. The upgrades foreshadow re-licensing applications, since the utilities hope to recoup their investments by remaining in operation longer, and new equipment helps ensure NRC approval.

“If you do a major upgrade now, if the utility then goes to the NRC to ask for a license, it does help them in that respect,” Burns said. “Basically, as time goes by, hardware wears out. Unfortunately, replacing steam generators halfway through the plant’s life has become a common thing.”

The expensive steam-generator replacements underscore the delicate balance between the need to permanently store high-level radioactive waste and the state’s increasing demand for electrical energy. Although Californians use less electricity per capita than any other state, demand continues to grow at nearly 2 percent annually, spurred on by increasing population and economic activity.

Public ratepayer-advocacy groups such as The Utility Reform Network (TURN—Becker sits on its board) opposed the steam-generator replacements, as the DRA did initially. However, after a detailed analysis, DRA reversed tack.

“DRA supported the replacement of steam generators because we view it as a cost-effective replacement,” Burns said. “The closer analysis involved the cost of replacement power and the cost of other capital additions.” The 400-percent spike in natural-gas prices just prior to California’s electrical crisis in 2000 helped weigh the decision. “The gas rates went up after the energy crisis, and they never really went down, so that affected the analysis,” he said.

Higher natural-gas prices make nuclear power more competitive on the electrical market. Currently in California, electricity generated by natural gas costs 5 cents per kilowatt hour; electricity generated by nuclear power costs 4 cents per kilowatt hour. Though these figures do not include the costs of constructing nuclear or gas plants, that penny difference adds up. Californians consumed 6,732 kilowatt hours per capita in 2003; at the aforementioned rates, nuclear power results in a savings of $67—multiplied by 40 million or so consumers.

Perhaps more important than the current price per kilowatt hour is nuclear power’s role in the state’s energy portfolio. Diablo Canyon and San Onofre combined provide more than 4,300 megawatts of baseload power; 14.4 percent of the electricity produced in-state, the fourth-largest source in the portfolio. Natural gas, as mentioned above, provides 37.7 percent. Coal, one of the leading producers of greenhouse pollutants, comes in second at 20 percent. Large-scale hydroelectric power comes in third at 17 percent.

Farther down the scale are renewables, which account for 10 percent of the state’s portfolio. That’s just half of the state’s goal to achieve 20 percent by 2010—four short years away. If Diablo Canyon and San Onofre were shut down tomorrow, the state would have difficulty meeting electrical demand.

“I think it depends on whether you’re talking in the short term or the long term,” Boyd said. “To replace over 4,000 megawatts overnight, it would be quite a chore. It would be done over a period of time. … We have a long time before these licenses expire.”

Meeting the long-term demands of a growing population and economic base may prove to be difficult. The lack of a federal repository precludes the construction of new nuclear power plants. Coal plants are ruled out because they contribute to global warming. Most of the sites for large hydroelectric plants are taken. Renewables show promise, but it remains to be shown that they can keep up with the state’s rapacious demand.

That leaves natural gas as the only available major source, and that’s a problem, according to highly respected Simmons & Company International, the investment bank founded by Matthew Simmons that conducts research on the petroleum and natural-gas industries. In its 2005 forecast of natural-gas supplies, Simmons reported: “Long-term, we continue to believe that the limited ability to increase drilling activity, smaller reservoir sizes, and accelerating decline rates will hinder production performance, especially in the U.S. but also in Canada over the long-term.”

In other words, North American supplies are being rapidly depleted, which could spell disaster for California, which imports 85 percent of its natural gas from out of state, from North American sources. Although Boyd is hopeful that liquid natural gas, or LNG, imported from overseas will make up the gap—an LNG port is currently under construction in Ensenada—Simmons’ report casts doubt on this notion: “We believe that LNG imports will likely struggle to offset declines in production and expect this lack of supply to constrain demand growth and keep natural gas prices relatively high.”

That’s a nice way of saying there’s not going to be enough natural gas to go around. No doubt that’s a fact that will weigh heavily on the California Energy Commission’s study of the impacts and benefits of the state’s two nuclear power plants, as mandated by A.B. 1632.