Sen. Lamar Alexander
Chairman, Senate Energy Subcommittee
Subcommittee on Energy
Hearing on the Future of Nuclear Power Generation in the U.S.
March 4, 2004
Opening Statement for the Record
This is a hearing on the future of nuclear power generation in the United States.
The Tennessee Valley Authority is rebuilding Unit 1 of its nuclear power plant at Browns Ferry, Alabama, which has been closed since 1985. This will be the first new nuclear capacity in the United States since 1996 when TVA started operations at Watts Bar in Tennessee. There has been no new nuclear power plant built from scratch in the United States since 1974.
On the face of it, the failure of the United States to begin a new nuclear plant for 30 years is perplexing. After all, we invented the technology. Since the 1950’s, we have operated nuclear-powered submarines and carriers without a reactor incident - 72 nuclear-powered submarines and nine nuclear-powered air craft carriers operate today all over the world. On shore we operate 103 power plants which produce about 20 percent of America’s electricity.
At a time when we are importing nearly 70 percent of our oil and increasingly moving toward importing more of our natural gas, our failure to use more nuclear power makes us more dependent on the Middle East and other foreign sources of natural gas. At a time when the supply of natural gas is diminishing and the price is skyrocketing, new nuclear power plants - once built - could provide low cost electricity that would help keep production costs down and keep jobs from moving overseas. Once built, a nuclear power plant produces electricity at a cost of 1.71 cents per kilowatt hour compared with 1.85 cents from coal-fired plants and 4.06 cents for natural gas plants. Nuclear power plants are efficient and reliable; coal plants operate 69 percent to 70 percent of the time, while nuclear plants typically operate an average of 90 percent of the time. Finally, at a time when many parts of the United States are struggling to meet clean air standards, nuclear power plants could produce electricity without producing the millions of tons of sulfur dioxide, nitrous oxides and carbon that coal-fire plants produce. In addition, nuclear power plants avoid emissions of mercury that coal-fired plants produce.
During the 30 years that the United States has not built new nuclear power plants, other countries have moved ahead. France produces 78 percent of its electricity from nuclear power plants. Japan, once devastated by nuclear weapons, generates one-third of its electricity from nuclear plants and has three new nuclear power plants under construction. There are eight new nuclear plants under construction in India, four in China, and three in Russia.
America’s failure to use this clean, efficient, and inexpensive source of power has been a result of safety failures, ineffective regulation and poor management decisions. During the 1970’s, the nuclear industry was mired in cost overruns and schedule delays brought in part by a changing regulatory environment and management decisions that dramatically overestimated needs for capacity. No where was this more pronounced than at the Tennessee Valley Authority. During the 1970’s, TVA had a plan to build 17 nuclear power plants. Four of these were cancelled in 1982. Four more were cancelled in 1984. The total investment in these eight canceled units was $4.6 billion. TVA then spent 12 years building Sequoyah and 23 years completing Watts Bar, both in Tennessee. When you add in the costs of interest on these billions spent on unused nuclear capacity, you get an amount that equals probably half of TVA’s current $24 billion to $26 billion statutory debt - a debt that raised rates for valley residents, discourages valley businesses, and limits TVA’s ability to meet its clean air responsibilities. In addition, it spent over $4 billion at Bellefonte in Alabama before it stopped work. This $4 billion is currently not included in TVA’s statutory debt.
A disastrous fire at Browns Ferry in 1975 and the Three Mile Island Incident in Pennsylvania in 1979 – at which no one was hurt – were powerful blows to confidence in the safe operation of nuclear power plants and the effectiveness of the Nuclear Regulatory Commission.
What we hope to find out today is whether attitudes and conditions have changed. There does seem to be a regulatory environment that is more favorable to the safe and efficient operation of nuclear power plants. The Nuclear Regulatory Commission has approved 100 power uprates at existing U.S. nuclear plants. These uprates, which allow the plants to operate above original design specifications, have produced an additional 4,000 megawatts of electricity per year. NRC has granted 23 operating license extensions and many more are applications are pending. There are new ways to reduce the construction cost of the plants. Japan has now constructed the world’s first advanced boiling water reactor. Japan did this in a total of 37 months from breaking ground to loading of the fuel in the reactor core. A U.S. Company, General Electric, designed this new reactor; the Nuclear Regulatory Commission certified it; the Japanese built it and will use it. Finally, the NRC has now established a clear process for early site permitting for new plants.
Still, high and uncertain construction costs and lingering safety concerns along with the Enron debacle continue to make investors wary of new nuclear power plants. The result has been that 90 percent of America’s new generating capacity now comes from new plants which burn natural gas despite its higher prices.
That is why the nation is so closely watching TVA’s progress at Browns Ferry.
If that project is successfully completed on time and on budget, it could have an impact on the willingness of other utilities and other financial institutions to invest in nuclear power.
In addition, today we hope to learn more about advances in reactor technology and engineering and construction practices. We want to discuss the regulatory framework under which the nuclear industry operates and the financial impediments to developing new nuclear generation in the United States.
I want to thank Chairman Domenici for his leadership in helping to ensure that nuclear power continues to be an integral part of our nation’s energy portfolio. I want also to thank Chairman Inhofe of the Environment and Public Works Committee for consenting to the Nuclear Regulatory Commission’s attendance at this hearing. Hearing Witnesses:
Glenn McCullough, Jr. - TVA Board of Directors, Chairman
Oswald "Ike" Zeringue - President and Chief Operating Officer, TVA
Marvin S. Fertel, Sr. - Vice President and Chief Nuclear Officer, NEI
James Asselstine - Managing Director, Lehman Brothers
Dr. William D. Travers - Executive Director of Operations, Nuclear Regulatory Commission
J.M. Bernhard, Jr. - Chairman and Chief Executive Officer, The Shaw Group, Inc.