From: Chris Baltimore, Reuters
Published September 11, 2007 10:22 AM

Nuclear Industry Inches Toward New Construction In US

SPRING CITY, Tennessee (Reuters) - When the Watts Bar Unit One here switched on in 1996 after a 23-year construction ordeal, it was the last of a generation of U.S. commercial nuclear power plants to emerge from a building cycle marred by massive cost over-runs and canceled plant orders.

Now, the U.S. nuclear industry is hoping that its troubled building history will not repeat itself as it takes baby steps toward ending a 30-year nuclear construction hiatus.

There are signs that things will be different this time around, and many industry observers are talking openly about an approaching "nuclear renaissance."

"It's going to be significantly different from how it was in the 1970s," said Bill Borchardt, who will oversee the lengthy licensing process to build new nuclear plants at the Nuclear Regulatory Commission.

U.S. companies in coming weeks are expected to file the first of about 30 anticipated new reactor license applications at the NRC to serve soaring U.S. electricity demand with greenhouse gas-free nuclear energy.


Most of the building interest is centered in Southeast states like Georgia, Virginia, Alabama and Florida, where land is plentiful and a population shift from northern states is driving electricity demand through the roof.


Dominion Resources, Duke Energy and Southern Co are among the utilities in the process of seeking plant licenses, according to a list provided by the NRC.

The NRC is expected to take about 3 years to process applications, and construction could take 4 years, putting the first new U.S. reactors online sometime around 2015.

When it happens, the license filing at the NRC will be the first step in a long dance with regulators that hasn't been initiated in the United States since 1975.

But obtaining a plant license -- which costs about $50 million -- is much cheaper than buying the massive quantities of steel, concrete and reactor equipment that puts the cost of building a new commercial-scale plant at about $5 billion.

"The decision to build is where the real money kicks in and I think they'll enter into that gradually," Borchardt said.

The global nuclear industry -- along with Wall Street financiers and bondholders who will foot the bill -- will watch the fate of the first new plants, said Richard Cortright, a managing director at Standard and Poor's rating service.

"If it's a relatively smooth process you're going to have a lot more nuclear plants," Cortright said. "If it's disrupted and a political nightmare it could spell the finality of this industry."

Nuclear power is now seen as a candidate to replace electricity generated from coal, which accounts for about half of U.S. power supplies but also makes up about 40 percent of heat-trapping greenhouse gas emissions.


When the first wave of U.S. nuclear plants was proposed in the 1960s, utility officials said that their product would be "too cheap to meter." In reality, the industry's experience proved much harsher than their rosy expectations.

The Tennessee Valley Authority, which operates the Watts Bar plant about 50 miles south of Knoxville, was plagued with whistle-blower safety complaints that delayed construction and drove up costs to over $6 billion.

The second unit still sits idle, after TVA mothballed construction plans in 1985 due to safety concerns after the 1979 Three Mile Island accident in Pennsylvania sent a shockwave across the industry and canceled dozens of planned plants.

To minimize construction delays, the NRC has set up a streamlined process that allows companies to obtain a license to construct and operate a nuclear plant in one fell swoop, minimizing possible delays.

To get the so-called Combined Construction and Operating License, applicants must use pre-approved designs from builders like Westinghouse, which standardize plant construction down to the color of the wallpaper.

That's a vast departure from the nation's 104 operating nuclear plants -- each of which was built from scratch.

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