Two Years After Fukushima, Duke Energy Still Making Risky Nuclear Bets

Two Years after Fukushima, Duke Energy Still Making Risky Nuclear Bets

Two years ago the disastrous Japanese earthquake and Duke Energy wants a blank check tsunami were exacerbated by the manmade disaster at the Fu- to build new nuclear reactors kushima Daiichi nuclear plant. The meltdowns and explosions at three General Electric (GE)-designed nuclear reactors forced Despite Rogers’ misgivings, Duke Energy is still committed to countries and corporations around the world to reexamine their three new nuclear projects in North Carolina, South Carolina dangerous dalliance with nuclear power: & Florida. Duke’s bet on new nuclear power is starkly out of touch with the rest of the U.S. power industry: other corpora- • Germany shut down eight old reactors and will phase out all nuclear tions have already pulled the plug on new nuclear projects in power by 2022.1 Alabama, Iowa, Louisiana, Missouri, New York & Texas.7

• Italy voted to remain nuclear free, with 94% of voters rejecting Costs for Duke’s three proposed nuclear plants continue to plans for new reactors in a referendum.2 soar over their budgets. Duke had originally proposed only one new nuclear plant: Lee Station, near Gaffney, South Carolina. • Switzerland will phase out ﬁve reactors and vote whether to phase However, after the merger with Progress, Duke inherited plans out the rest by 2029.3 to construct two more nuclear reactors in Florida and North Carolina: One year after the triple meltdowns at Fukushima, new nuclear construction projects fell dramatically as compared with previ- Worse yet, Duke is asking customers to write a blank check ous years. According to Steve Thomas, Professor of Energy to fund these boondoggles. North Carolina law allows Duke Studies at the University of Greenwich, 38 nuclear reactors to petition the NC Utility Commission for recovery of nuclear began construction in the three years prior to the disaster. Only construction costs before the reactors are ever completed. two reactor construction projects broke ground in the year This idea is known as Construction Work In Progress, or CWIP. following the triple meltdowns.4 However, Duke is now lobbying for a new version of CWIP that would subject ratepayers to almost automatic annual Even before the world watched Japan’s GE-designed nuclear rate increases even if these new nuclear reactors are never plants melt down and then blow up in succession, the abysmal completed.8 economics of new nuclear power had many nuclear corporations questioning the wisdom of building more nuclear reactors. Consumers and legislators from throughout Duke’s service Duke Energy’s CEO Jim Rogers told the North Carolina Utilities territory are revolting against this advanced payment for Commission in 2007 that, “I’m not a true believer.... We’re talk- ridiculously expensive nuclear plants. Florida passed a law in ing about a renaissance in nuclear. I don’t see it,”5 According to 2006 called the Nuclear Cost Recovery Clause, similar to CWIP. the Charlotte Observer, Roger said that, “[t]here are scenarios I Now, a bipartisan group of Florida state senators – including can imagine that it’s [a new nuclear plant] not built at all,”6 former nuclear supporters – is decrying the law and calling for its reform or repeal.9 Republican Florida Assemblyman Mike Fasano went so far as its regulators have known for years, if not decades, that the to warn North Carolina about trusting Duke with these types Oconee nuclear plant in South Carolina is vulnerable to flooding of policies in a letter to the governor, writing: “I believe that it is due to a dam failure. If that dam should fail, a triple meltdown inherently unfair for utilities to ask their customers, our constitu- is virtually certain.18 According to the NRC’s calculations, the ents, to front the costs of massive and expensive construction risk to Duke’s Oconee reactors is far higher than the odds were projects that are not even guaranteed to be completed. of an earthquake-induced tsunami causing a meltdown at the These risky investments ought to be the responsibility of utility Fukushima plant.19 shareholders and their investment partners, not the average ratepayer that is already struggling to pay their monthly utility bill The nuclear renaissance is dead on arrival or keep their business afloat.”10 According to John Rowe, former CEO of Exelon Corporation In a recent poll, 89% of North Carolinians oppose the advanced which cancelled a new nuclear plant in Texas, the combination fee to pay for new nuclear plants. 81% would be less likely to of abysmal economics and the meltdowns at Fukushima have vote for a politician who supported such legislation. And by a stuck a fork in the supposed nuclear renaissance. One year three-to-one margin, Carolina consumers favor building renew- after the meltdowns, Rowe stated that “(i)t is 30 years before it able energy rather than new nuclear power plants.11 breaks even. I think the combination of low natural gas prices and Fukushima will set a real nuclear renaissance back by Duke’s current nuclear reactors several decades.” Rowe concluded that, “(w)e should maintain echo Fukushima risks the technical knowledge if it would be needed 20 years from now. But I’m genuinely uncertain that it will be needed.”20 While the Duke Energy merger with Progress Energy cre- ated the nation’s largest electric corporation operating the third-largest nuclear fleet in the U.S., bigger is not necessarily better.12 Prior to the merger, Duke Energy operated seven nuclear reactors at three sites in the Carolinas: three reactors at the Oconee nuclear plant in South Carolina and two each at the Catawba and McGuire nuclear plants in North Carolina.13

With the Progress merger, Duke expanded its service territory and added five more reactors. One of those reactors, Crystal River, is being retired due to Progress Energy’s incompetent attempts to repair the containment dome.14 The two reactors at the Brunswick plant near Wilmington NC have the same General Electric design that melted down in Japan. Duke also acquired nuclear reactors at Shearon Harris in North Carolina, and Robinson in South Carolina, all of which face additional regulatory costs after Fukushima. The estimated price tag for needed safety improvements to U.S. reactors totals more than $23 billion.15

After the meltdowns at Fukushima, Duke Energy claimed that it “responded to the events in Japan by renewing our steadfast commitment to maintain the highest levels of safety at each of the three nuclear power plants we operate.” 16

But patching up their old GE-designed reactors isn’t the only safety problem Duke needs to address. Revelations from whistleblowers inside the U.S. Nuclear Regulatory Commission call into question Duke’s commitment to safety. Documents secured through the Freedom of Information Act reveal that Duke has engaged in a decade-long effort to delay safety improvements at its Oconee nuclear plant in South Carolina.17 According to reports in the Huffington Post, Duke Energy and Weeks after the meltdowns at Fukushima, UBS Investment The nuclear lobbyists are attempting to further deflect; delay Research released a report entitled Can Nuclear Power Survive and ultimately avoid new nuclear safety regulations. Both Fukushima?21 According to UBS, the Fukushima accident was House27 & Senate28 Republicans have written the NRC asking the most serious ever for the credibility of nuclear power: that nuclear regulators back off safety regulation that could significantly reduce the amount of radiation released in a “While the 1986 Chernobyl accident, at least to date, had a meltdown at any one of the Fukushima like reactors in the U.S. significantly greater environmental impact, we would argue that The NRC Staff recommended that 31 GE-designed nuclear Fukushima raises even larger credibility issues for the nuclear reactors install filters on the containment vents the agency has industry than previous accidents. already ordered in response to Fukushima; a filter could cost an additional $16 million.29 • Fukushima is happening in an advanced economy using American/ Japanese reactor technology, not in a totalitarian state with sub- The containment filters were recommended after the Three standard technology and no safety culture. Mile Island meltdown and again after Chernobyl but industry lobbying blocked regulations. Almost every European nation • The size and duration of the accident is unprecedented. Four reac- operating reactors installed the filters after Chernobyl, and the tors are facing significant damage and it has already lasted three Japanese regulators will not let reactors restart without install- weeks without engineers getting the situation under control.”22 ing new filters.30 The NRC Staff, Union of Concerned Scientist’s nuclear engineers, grassroots anti-nuclear groups and UBS noted that the accidents at both Three Mile Island and Greenpeace all agree that installing the filters is a “no-brainer.”31 Chernobyl, “led to higher safety standards and nuclear phase- But the Commission is known for its coziness with the nuclear out decisions in some countries. We believe Fukushima will industry and has yet to vote on the filters. have a similar impact.”23

As UBS’ analysts correctly predicted, after Fukushima the nuclear industry and its regulators have been forced to reexamine the holes in the nation’s nuclear safety net.24 According to the U.S. Nuclear Regulatory Commission (NRC), these safety fixes were to be completed within 5 years of the disaster. But the now former NRC Chairman Gregory Jaczko said that the NRC wasn’t on pace to meet its own timeline for improving safety at U.S. nuclear plants in response to the meltdown at Ja- pan’s Fukushima Daiichi plant.25 Chairman Jaczko’s resignation letter to the President noted that “unfortunately, all too often, when faced with tough policy calls, a majority of this current commission has taken an approach that is not as protective of public health and safety as I believe is necessary.”26 (Endnotes)

1 http://www.guardian.co.uk/world/2011/may/30/ 26 http://www.nytimes.com/2013/02/27/business/energy-environment/a- germany-pledges-nuclear-shutdown-2022 divisive-debate-on-need-for-more-nuclear-safeguards.html?_r=0 2 http://www.bbc.co.uk/news/world-europe-13741105 27 http://energycommerce.house.gov/sites/republicans. energycommerce.house.gov/files/letters/20130115NRC.pdf 3 http://www.world-nuclear-news.org/NP-Swiss_to_ vote_on_phase_out_initiative-1801134.html 28 http://epw.senate.gov/public/index.cfm?FuseAction=Minority. PressReleases&ContentRecord_id=a79c7514- 4 http://www.guardian.co.uk/environment/2012/mar/08/ cf71-9bab-769a-0f4d16587726 fall-nuclear-power-stations-fukushima 29 http://www.platts.com/RSSFeedDetailedNews/ 5 http://www.charlotte.com/mld/observer/news/local/165047... RSSFeed/ElectricPower/7214147 6 http://www.charlotte.com/mld/observer/news/local/165047... 30 http://markey.house.gov/sites/markey.house.gov/files/documents/ 7 http://www.nrc.gov/reactors/new-reactors/new- Markey_02.07.13_Filtered%20Hydrogen%20Vents.pdf licensing-files/new-rx-licensing-app-legend.pdf 31 http://allthingsnuclear.org/to-filter-or-not-to-filter-that- 8 http://www.consumersagainstratehikes.org/wp-content/ is-the-question-with-only-one-sane-answer/ uploads/2012/12/Risks-to-Ratepayers-Synapse-Dec-2012.pdf 9 http://www.tampabay.com/news/florida-legislators- hope-to-fix-controversial-advance-fee-law/1275992 10 http://miamiherald.typepad.com/files/fasano-letter-to-nc-gov1.pdf 11 http://www.consumersagainstratehikes.org/wp-content/ uploads/2012/05/Poll_Key_Results_CARH.pdf 12 http://www.nytimes.com/2012/07/04/business/energy- environment/duke-energy-merger-creates-largest-us-utility.html 13 http://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1350/ 14 http://www.tampabay.com/news/business/energy/duke-energy- announces-closing-of-crystal-river-nuclear-power-plant/1273794 15 http://analysis.nuclearenergyinsider.com/operations- maintenance/nuclear-energy-insider-us-nrc-exelon- duke-energy-entergy-decisive-safety-enha 16 http://nuclear.duke-energy.com/2012/03/11/ duke-energy-responds-to-fukushima/17 http:// allthingsnuclear.org/is-nrc-hiding-an-american-fukushima/ 18 http://www.huffingtonpost.com/2012/09/14/flood- threat-nuclear-plants-nrc_n_1885598.html 19 http://www.huffingtonpost.com/2012/10/19/nuclear- plant-flood-threat-leak_n_1983005.html 20 http://www.energybiz.com/article/12/03/ ceos-odds-over-nuclear-energy-future 21 http://suomenkuvalehti.fi/s/files/pdf-liitteet/118095_ QSeries-Nuclear%20Power.pdf 22 http://suomenkuvalehti.fi/s/files/pdf-liitteet/118095_ QSeries-Nuclear%20Power.pdf 23 http://suomenkuvalehti.fi/s/files/pdf-liitteet/118095_ QSeries-Nuclear%20Power.pdf 24 http://pbadupws.nrc.gov/docs/ML1118/ML111861807.pdf 25 http://online.wsj.com/article/SB10001424052970 204276304577265831408022076.html