March 7, 2012
By: Julie Johnsson and Mark Chediak
California Nuclear Backlash Mounts After Japan Meltdown
Source: Bloomberg, Mar 7, 2012
Photo credit: awnisALAN
Two nuclear power plants perched near earthquake faults in California could struggle to get relicensed after a cascade of natural and nuclear disasters across the Pacific Ocean in Japan galvanized opposition groups.
Fukushima-inspired concerns have rippled through Orange County, where the cities of Laguna Beach and San Clemente asked regulators to decide whether Edison International (EIX)’s San Onofre atomic plant 60 miles (97 kilometers) southeast of Los Angeles could withstand an earthquake and tsunami before extending its permit to 2042 from 2022. Further north, PG&E Corp. (PCG) asked for a delay in relicensing Diablo Canyon pending seismic studies.
“An accident would be devastating” at San Onofre, Laguna Beach Mayor Jane Egly said in an interview in her home overlooking the seaside enclave. “If they don’t do anything to address our safety concerns, I would support shutting it down.”
Nuclear anxiety in the most populous state, a bellwether for political and environmental issues nationwide, is echoing inNew York, Ohio, Virginia and Vermont, where local groups oppose operators’ efforts to extend the lives of their plants.
Eleven U.S. power companies including Edison, PG&E,Entergy Corp. (ETR) and Progress Energy Inc. (PGN) seek 20-year license extensions to keep 15 atomic generators running through age 60.
At stake is whether reactors designed in the 1960s and 1970s, the same vintage as those overwhelmed by a 9.0-magnitude quake and 46-foot (14-meter) tsunami in Fukushima, Japan, should remain the foundation of a 104-reactor U.S. fleet through mid- century. The debate over atomic energy, which provides about 20 percent of the nation’s power, extends even into new projects.
‘Fukushima Never Happened’
Gregory Jaczko, chairman of the U.S. Nuclear Regulatory Commission, stoked concerns over costs and safety of new reactors Feb. 9 when he cast the lone vote of the five commissioners against granting Southern Co. (SO) the first reactor licenses in 30 years.
Jaczko warned the U.S. atomic regulator had proceeded “as if Fukushima never happened.”
Failure to extend licenses would hurt PG&E and Southern California Edison, the utility owned by Rosemead, California- based Edison. San Onofre is among its largest and most valuable assets, and the 78 percent stake owned is valued at $5.2 billion, according to a regulatory filing.
Shares in Edison have gained about 13 percent since the March, 11, 2011, atomic disaster in Japan. PG&E has lost 9 percent in the period, while the Dow Jones Utilities Average index (UTIL) has gained 8 percent.
No Nuclear Revival
Since a nuclear revival in the U.S. is at least a decade away, “one of the biggest concerns for industry and regulators will be to ensure that important systems, structures and components” at existing plants function safely for another 20 years, said Chris Gadomski, lead nuclear energy analyst for Bloomberg New Energy Finance in San Francisco. (FRC)
The NRC has extended licenses for 71 reactors since 2000 and has never shut down a plant that sought relicensing, although it has withheld permits until safety concerns were satisfied, NRC spokesman David McIntyre, said in an e-mail.
Plant operators don’t think new safety concerns should have any bearing on relicensing because regulators and the industry are addressing them separately and continuously, Steve Kerekes, spokesman for the Nuclear Energy Institute, a Washington-based industry lobbying group, said in a phone interview. “It’s a rigorous process,” he said.
Older Plant Limitations
Fukushima highlighted the limitations older reactors face in withstanding unusual events, such as prolonged blackouts or freak tidal waves, not anticipated by the original designers, said California seismologist Bruce Gibson. He serves on a state- appointed panel monitoring a seismic review of the Diablo Canyon plant on the central California coast.
New reactors, such as the AP1000 from Toshiba Corp. (6502)’s Westinghouse Electric unit that Atlanta-based Southern is erecting in Georgia, are designed to safely shut down 72 hours after a station blackout without any human intervention, Scott Shaw, a Westinghouse spokesman, said in an e-mailed statement.
“I felt like this was the moment to get something done,” said Ben Davis, Jr., 58, a semi-retired home health care worker who leads a state ballot initiative to close the plants. Davis was emboldened by his previous success in a 1989 drive that led to shutting down the Rancho Seco nuclear plant near Sacramento.
If Davis gathers 504,760 signatures on his petition by next month, California voters will be able to vote to close the plants in November. He wouldn’t say how many he has collected.
More Relicenses Coming
Relicensing is under way for some of the nation’s most contested plants. In New York, Democratic Governor Andrew Cuomo has vowed to shut down Entergy’s Indian Point reactors, 24 miles north of New York City.
Also seeking a 20-year extension is FirstEnergy Corp. (FE)’s Davis-Besse plant, 21 miles southeast of Toledo, Ohio, which was shut from 2002 through 2004 because of leaks and reactor corrosion. Progress Energy is seeking to relicense a unit of its Crystal River plant, 80 miles north of Tampa, Florida, even though the reactor has been closed since 2009 for repairs.
License renewals look at potential environmental impacts and a plant’s ability to keep decades-old components in good operating condition, Scott Burnell, an NRC spokesman, said in an e-mail. Issues such as seismic risks and blackout precautions are considered normal operating matters covered by the regulator’s continuing oversight process.
New Fukushima-related rules, expected to be released by March 9, likewise “will apply to every operating reactor, regardless of whether a reactor’s license has been renewed,” Burnell said. Plant operators will have until 2016 to comply with the orders, which will cost U.S. utilities about $100 million, according to the Nuclear Energy Institute.
Following the Fukushima catastrophe, San Francisco (FRC)-based PG&E asked the atomic regulator to hold off relicensing Diablo Canyon, 190 miles north of Los Angeles, until the company finishes a new study of the earthquake risks, including a fault discovered in 2008 that runs 600 meters offshore from Diablo Canyon’s reactors.
San Onofre and Diablo Canyon are on the ocean in areas prone to earthquakes. They are the only plants in the U.S. with geography similar to Fukushima, where three reactors melted down when the station lost power after unprotected diesel generators were swamped by the tsunami.
“This plant has been and will be run safely in the future,” Anthony Earley, Chief Executive Officer of PG&E, said of Diablo Canyon in a Feb. 23 interview. Edison has told state regulators its plant could withstand an earthquake and tsunami, based on updated data, and plans a further study of its seismic risks.
Equipped For Disaster
Utility officials say California’s reactors are better equipped for disaster. San Onofre, which rises from a strip of land between a beach and a freeway, has four back-up generators stored 30 feet above sea level and a seven-day supply of diesel fuel in earthquake-fortified underground vaults. Batteries with eight hours of back-up power are kept 50 feet above sea level, while the utility has 4.5 million gallons of water on site that can used to cool the reactors, according to Southern California Edison (SCE1)’s website.
Diablo Canyon is similarly fortified and built atop an 85- foot cliff, almost three times higher than the greatest anticipated wave in the area, said James Becker, site vice- president, in a phone interview.
Southern California Edison will decide this year whether to ask state regulators to fund renewing San Onofre’s operating licenses, which expire in 2022, said Stephen Pickett, a spokesman for the utility. Repairing steam generators after a small radiation leak shut the plant in January will not affect the timing of relicensing, Pickett said by telephone.
‘Open Safety Issues’
“It will be difficult to go before the commission to ask them to make a decision to pursue relicensing and at the same time have open safety issues at the plant that have heightened community concern and introduced the potential for additional costs,” said Anne Selting, a San Francisco-based credit analyst for Standard & Poor’s (SPY), in a telephone interview.
PG&E’s Earley described Diablo Canyon as a crucial asset to his company and the state of California, and said he is prepared to spend hundreds of millions of dollars on safety upgrades, if needed to keep it running.
Closing the plants abruptly would also have environmental and consumer consequences: greater smog, rolling blackouts and higher electricity bills reminiscent of the energy crisis in 2001, according to a November 3, 2011 legislative analyst report on the nuclear ballot initiative.
Losses to the two utilities could total more than $4 billion, which they would attempt to recoup from customers through higher rates and from state taxpayers by suing, the report said.
The San Luis Obispo Mothers For Peace, an anti-nuclear group, says residents of their community are more concerned by the economic toll from an accident at Diablo Canyon, 12 miles to the west.
“No utility or regulator can claim they know the worst- case scenario,” said Jane Swanson, a board member of the group, which has opposed the plant since the early 1970s.
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