Nuclear Industry's Fate In Hands Of Regulators

The U.S. nuclear industry's top cop will weigh major changes in how it regulates the country's 104 reactors after Japan's Fukushima disaster, a move that will help shape the future of the power source and could lead to significant cost increases.

A task force report published Wednesday recommended the Nuclear Regulatory Commission look at a fundamental shift in how it plans for catastrophes like the earthquake and tsunami that hit Japan in March.

Critics and proponents of nuclear power had broadly similar reactions: while the proposal was more far-reaching than many expected, it stopped short of recommending a major overhaul and focused on incremental improvements that would unify what it called "a patchwork" of previous regulations and recommendations.

The framework should be "logical, systematic, coherent, and better understood," the task force concluded in its report (PDF file).

Moreover, it should include new rules "to address events of low likelihood and high consequence" — in other words, rare disasters like Japan's — "thus significantly enhancing safety."

The big question now is which ideas the five-member NRC accepts, and how quickly it proceeds to reform an industry in which plant retrofits can cost millions of dollars. It could affect the viability of plans for new plants that already face tough competition from cheap natural gas.

"Done poorly, they could significantly increase costs in the current operating fleet without improving safety one iota," said Margaret Harding, a former vice president at GE-Hitachi responsible for quality, and now an industry consultant.

"Done well, and they will get at the real issues, eliminate the vagueness in the regulation, and improve safety. Getting it right will not be easy or quick," Harding said.

The commission's chairman wants to avoid the kind of time-lag seen in the past when the agency has had to make major changes for the highly technical, deliberative industry.

Gregory Jaczko, the contentious head of the NRC who worked for industry critics before his appointment, said he hopes his fellow commissioners can review the report and make decisions within three months, he told Washington-based news organization The Hill.

The world is watching. Some countries, including Germany, have pulled away from nuclear power after Fukushima.

The United States is home to the world's largest nuclear industry and many countries evaluating the power source look to the NRC as a model for safety standards.

"Even though the task force's report seems more far-reaching than any other global nuclear safety updates that have been considered so far, it is probably merely addressing the obvious, rather than revolutionizing the U.S. nuclear power market," said Claudia Mahn, analyst with IHS Global Insight.

The NRC's commissioners will discuss the recommendations at a public hearing with the task force on July 19. That is expected to kick off a broader, six-month review. Commissioners have said they want to involve industry and public in the next phase.
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The nuclear industry was already struggling to expand with high construction costs and the competitive threat from cheap and abundant supplies of natural gas. Utilities and plant operators such as Exelon, Entergy, and PG&E could be affected by new regulatory changes.

The task force found no immediate safety issues, but focused on how well plants can cope when earthquakes, floods or other disasters wipe out power supplies needed to keep radioactive fuel cool.

The report called for more stringent requirements for reactors that share the same design as those in Fukushima, which could be costly but not unusual for the industry, said Mark Prelas, director of research at the University of Missouri's Nuclear Science and Engineering Institute.

On its own, the industry had already planned to build regional emergency response centers, a plan that could cost each of the reactors $9 million to $10 million over the next decade, IHS analyst Mahn noted, citing industry figures.

The nuclear industry welcomed the task force's statement that U.S. reactors are safe, but questioned how the recommendations for safer operation were reached.

"The task force report does not cite significant data from the Fukushima accident to support many of its recommendations," Tony Pietrangelo, a senior vice president at the Nuclear Energy Institute, said in a statement.

"Given the mammoth challenge it faced in gathering and evaluating the still-incomplete information from Japan, the agency (NRC) should seek broader engagement with stakeholders," he added, while urging "careful analysis of the likely consequences of regulation."

Environmental groups and other nuclear power critics said the recommendations support their concerns that the NRC should put the brakes on approving licenses for plants.

"The report's correct focus on the impact of severe accidents and lack of coherent regulations in dealing with them necessitates a revision of current regulations as soon as possible," said Tom Clements of Friends of the Earth, which is fighting new reactors planned for the southern United States.

An engineer who has worked on reactors similar to the Fukushima plant and now consults for environmental groups said the report might mean plants can avoid design changes.

"These NRC recommendations are plain vanilla and are designed to avoid the costly modifications to really fix the problem," said Arnie Gundersen of Fairewinds Associates of Burlington, Vt.

The Union of Concerned Scientists, a group that advocates for nuclear safety, issued two dozen of its own recommendations on Wednesday, emphasizing the regulator should take a broad and fast approach.

"Fukushima should shake the NRC out of its complacency," said David Lochbaum, director of the group's nuclear safety project.

As for the value of the NRC task force recomendations, Edwin Lyman, a physicist with the UCS, had this to say: "The devil is going to be in the details of how those recommendations are carried out."