Cost of Nuclear Power

Many reports claiming nuclear power is cheaper than other sources of energy do not include all costs and use flawed analysis.  See details below.

“Nuclear power, as a practical, affordable way to keep the lights on, is an absurdly problematic endeavor, fraught with no end of unexpected technical complications. And god help us if another Chernobyl or Fukushima revisits our fragile human condition, which of course, it will, but…as an investment opportunity, with its unfettered Trillions in government subsidies, and America’s naive ratepayer picking up the rest, how can one’s portfolio be without it? That said, I heat the spas and pools, in all of my homes via solar.”

Cost of Nuclear Waste Storage and Decommissioning

Ratepayers and taxpayers fund nuclear waste storage. Ratepayers fund nuclear power plant decommissioning. The waste must be stored for hundreds of thousands of years.  Money is deducted from ratepayer utility bills every month to pay for decommissioning and waste storage. The federal government was required to starting managing nuclear waste storage starting in 1983, but has failed to do so. Utility companies have sued and won settlements from the federal government because of this. Taxpayers are funding these settlements. NOTE: The federal government has suspended collection of waste storage funds from ratepayers. However, it is unclear at this time if this is temporary.

• In California, the portion paid for decommissioning costs is managed the California Public Utility Commission (CPUC).  The rate paid varies. For example,  Southern California Edison requested a decommissioning rate increase from 16.05 cents per kWh to 16.07 cents per kWh to be effective January 2014. This is the rate for residential customers.
• The ratepayer portion paid for nuclear waste storage is managed by the Department of Energy (DOE).
  • Starting in 1983, the Nuclear Waste Policy Act (NWPA) authorized the DOE to charge electric utilities fees to cover the costs of disposing of the nuclear waste they generate. Utilities today pay annual fees at a rate of 1 mil (0.1 cent) per kilowatt-hour of the electricity they sell that is generated by nuclear power plants. In addition to the ongoing yearly fees, the NWPA established one-time fees to cover the costs of disposing of waste that was generated before the law was enacted. DOE provided utilities with several options for paying that one-time charge, but several utilities have not yet paid the fee, and a significant amount remains uncollected.
• Under contracts signed with electric utilities pursuant to the Nuclear Waste Policy Act, the DOE was scheduled to start removing waste from storage sites at individual power plants for transport to a federal storage or disposal facility by 1998. After the federal government missed its 1998 contractual deadline to start collecting waste, electric utilities began—successfully—to sue the government for resulting damages, which are paid from the Treasury’s Judgment Fund (taxpayer funded).
• See more details, including costs and monies accummulated, in this July 27, 2010 Congressional Budget Office Statement to Congress, The Federal Government’s Responsibilities and Liabilities Under the Nuclear Waste Policy Act.

CPUC role: Protect ratepayer financial and safety interests

The Nuclear Regulatory Commission (NRC) has jurisdiction over nuclear power radiation safety. However, the CPUC regulates utility expenditures and other safety issues at nuclear power plants, and sets utility rates.

Loretta M. Lynch, former CPUC President says the CPUC has become a lapdog rather than an independent regulator representing the public. See her interview here (starts at minute 1:00). The Governor appoints the five Commissioners with confirmation from the State Senate, but cannot fire them.  However, the Governor independently selects which one will be CPUC president and can remove them from that role. Governor Gray Davis removed Lynch as president and appointed Michael Peevey (former President of Southern California Edison).

 

Aging nuclear reactors cost ratepayers billions of dollars

• The two San Onofre reactors are permanently shut down due to defective replacement steam generators. This has cost ratepayers over a billion dollars and Southern California Edison wants ratepayers to continue paying while it produces no energy.
• San Onofre’s poorly designed replacement steam generators leaked radiation in less than one year and developed decades of unprecedented premature wear in less than two years. These generators were supposed to last 20 to 40 years. See steam generator reports from Arnie Gundersen and others on the Handouts section of this website.

The California Public Utilities Commission (CPUC) 2005 Cost Analysis to replace San Onofre’s four steam generators was seriously flawed. 

• The analysis assumed extremely high future gas prices. See Edison may be saving money with San Onofre shut down 2/21/2012.
• It excluded
  • Cost of storing tons of toxic radioactive waste for thousands of years.
    •  A federal court awarded the Sacramento Municipal Utility District (SMUD) more than $34.6 million for the federal government’s failure to provide a permanent nuclear waste storage site for the Rancho Seco nuclear waste.   
    • SCE was awarded $142,394,294 in federal lawsuit to compensate for Unit 1 nuclear waste storage.
  • Cost of a potential nuclear accident.
  • Energy efficiency alternatives, such as increasing incentives to replace inefficient air conditioners.
  • Renewable energy and other energy options.
  • Load balancing.
  • Costs for potential problems with the steam generators.
    • The steam generator replacement project cost $680 million (in 2004 dollars). This included $569 for replacement steam generator installation and $111 million for removal and disposal of the original steam generators. See San Onofre steam generator replacement costs – CPUC 12/15/2005 decision.

Energy Policy Act of 2005 (H.R. 6) signed by President Bush

• Over $13 billion in cradle-to-grave subsidies and tax breaks
• Unlimited taxpayer-backed loan guarantees
• Limited liability in the case of an accident
• Other incentives to the nuclear industry to build new reactors.  See:

• Nuclear Giveaways in the Energy Policy Act of 2005
  • Price-Anderson Act: The Billion Dollar Bailout for Nuclear Power Mishaps
  • Nuclear Power is Dirty, Dangerous and Expensive
  • The Extreme Costs of Nuclear Power

 

Federal Subsidies: Nuclear vs. Solar Energy

Over its history as a significant California energy source, the nuclear power industry has received four times more subsidies than the California distributed solar industry and has had six times longer to mature with the assistance of such subsidies, as shown in this chart from Ask Saint Onofrio: Finding What Has Been Lost in A Tale of Two Energy Sources by Nancy E. Pfund & Noah W. Walker, August 2013. This study finds that, over the last half century, California’s nuclear power suppliers have received over $8.21 billion in federal support. By contrast, the federal solar investment tax credits are slated to revert from 30 percent to 10 percent of initial system costs in 2016.

Once-Through Cooling (OTC)

The San Onofre and Diablo Canyon nuclear reactors kill millions of fish and other aquatic life every year, due to their once-through cooling systems. They are out of compliance with Federal Clean Water Act §316(b) regulations.  

• The California Coastal Commission (CCC) issued a coastal development permit for reactor Units 2 and 3.  A condition of the permit required study of the impacts of the operation of the nuclear reactors on the marine environment offshore from San Onofre, and mitigation of any adverse impacts.  The permit (No. 6-81-330-A) requires Southern California Edison (SCE) to design and build mitigation projects that adequately compensate for the adverse effects of the power plant’s once-through seawater cooling system on coastal marine resources.

• Long-term monitoring and evaluation of the San Onofre mitigation projects is a condition of the coastal development permit.  See 2012 Mitigation Program Annual Status Report.
• University of California Santa Barbara (UCSB) scientists working under the direction of the Executive Director of the CCC are responsible for designing and implementing monitoring programs aimed at determining the effectiveness of these mitigation projects.  The San Onofre Mitigation Monitoring Program is based at the Marine Science Institute, University of California Santa Barbara. See UCSB San Onofre Mitigation Monitoring website.
• Annual Funding for the San Onofre (SONGS) Mitigation Monitoring Program is provided by SCE (paid by ratepayers) as a requirement of their coastal development permit for operating SONGS.  

• The California State Water Resources Control Board (WRCB) is responsible for implementing the Federal Clean Water Act §316(b) regulations on cooling water intake structures.  However, they have delayed implementation.
  • If the WRCB enforced compliance, the costs would be prohibitive, resulting in the probable shutdown of San Onofre.
  • Edison estimates $2.5 billion to retrofit San Onofre NC  Times 8/8/2009
  • Edison Feasibility Study for Installation of Cooling Towers at San Onofre 9/18/2009: Estimated initial costs of more than $3 billion, and annual costs of  $85 million. 
  • WRCB Alternative Cooling System Analysis for San Onofre 2/27/2008: Estimated capital and start-up costs of $593.1 million; all capital costs, operation and maintenance costs, and energy penalty costs over 20 years, discounted at 7.0% totals $2.62 billion. 
  • WRCB Once-Through Cooling website (status and policy)
  • Once-through Cooling Water Use and CWA 316(b) Regulation
  • Amended Policy 2012
  • Federal Water Pollution Control Act

• New Jersey’s Oyster Creek is closing due to the expense of complying with their once-through cooling rules.
  • Early closure for Oyster Creek – World Nuclear News 12/9/2010
  • New Jersey Administrative Consent Order 12/9/2010

• The California’s Independent System Operator’s annual transmission planning process is evaluating potential reliability impacts caused by retiring California once-through cooling gas plants and nuclear power reactors, the off line time needed to retrofit them with alternative technologies, as well as the timing issues of when plants will implement their compliance strategies (2012-2020).  See CAISO Once-through cooling generation.

California Emergency Services Act

• About $5.4 million annually is paid by taxpayers and ratepayers, under the California Emergency Services Act (Article 10, pages 67-72) for state and local emergency service preparedness in the event of a nuclear power plant accident.
  • $2,047,000 annually to California state agencies
    • $1,094,000 to California Emergency Management Agency (CalEMA)
    • $953,000 to State Department of Public Health
  • $3,332,000 annually to local government agencies
    • $1,732,000 for the Diablo Canyon site
    • $1,600,000 for the San Onofre site

Other California Ratepayer Costs

• The California Public Utilities Commission (CPUC) approved $64 million for new seismic studies and related costs for San Onofre. The CPUC decided all costs will be paid by ratepayers.  See 5/10/2012 CPUC press release.

• See CPUC nuclear website for information on billions of dollars of additional costs required for California’s two nuclear power plants.
  • Nuclear Decommissioning
    • see also NRC skimps on financial oversight NY Times 05/06/2012
  • Relicensing
  • Once-through Cooling systems (OTC)
  • Uranium enrichment services
  • System upgrades and maintenance
  • Seismic studies and other studies

 Nuclear Regulatory Commission’s (NRC) annual budget is over $1 billion. 

• 90% of the budget is from nuclear industry fees, which are indirectly paid by ratepayers. The remaining 10% is from U.S. taxpayers.
• FY 2014 proposed budget is $1,055.9 billion per Federal Register Revision of Fee Schedules: Fee Recovery for FY 2014.   Annual fee per reactor is $5,328,000. NRC hourly rate will increase from $272 to $279.  There are four less operating reactors, yet the fees are increasing. The 2014 Congressional Budget Justification provides more details on the various NRC programs and costs.
• FY 2012 budget was $1,038.1 billion per Federal Register Revision of Fee Schedules; Fee Recovery for FY 2012

“… the NRC is required, by law, to recover about 90 percent of our budget authority directly from the industry that we regulate…  The NRC received a bit more than $1 billion for FY 2012, so the amount we will recover in fees by Sept. 30 is approximately $909.5 million. We collect those fees and send the money back to the U.S. Treasury.” — Arlette Howard, NRC Fee Policy Analyst

Nuclear Waste Storage

• Nuclear waste is dangerous to human health for thousands of years. 
• Ratepayers and taxpayers are funding the cost of this storage. 
  • The government is in default on a contractual obligation to dispose of spent fuel from nuclear utilities; the user fees being paid to the government to finance the activities needed to meet that obligation are used to offset the [federal] deficit, while expenditures for those activities are constrained under limits on discretionary appropriations; and all the while, taxpayer liabilities resulting from failure to meet the government’s contractual obligations continue to grow.
  • The Financial Report of the United States Government for FY 2011 reports that these liabilities totaled $49.1 billion— including both the unpaid damages for non-performance and unspent Nuclear Waste Fund fees and interest.
  • Source: Blue Ribbon Commission on America’s nuclear Future, January 2012, P. 78
• There is no safe storage solution for this waste. 
• The Nuclear Regulatory Commission requires this waste to be stored at current sites for hundreds of years.  
• Learn more…

U-235 Uranium

• Uranium mining carries serious environmental and health risks.
• The U.S. is dependent on other countries for most of the U-235 uranium fuel.
• The price of U-235 uranium has risen dramatically in recent years.

     Price of uranium purchased by U.S. nuclear power plants