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Nuclear Safety in a Changing Electricity Industry

"Security" has been the watchword of the electric utility industry for a long time. Customers took reliable electric service for granted. Conservative investors bought electric utility stocks and bonds for secure dividend and interest payments. Electric utility company employees felt insulated from large layoffs such as those suffered by the aerospace industry in the '70s and the financial community in the '80s. But those days are ending. The new industry watchword is "restructuring," and for some, including the public, it could spell danger.

Restructuring describes preparations by the electric utility industry for significant changes. Regulatory and legislative initiatives at both the federal and state levels are pushing the electric utility industry away from traditional rate regulation, with protected retail monopolies, toward increased competition. To prepare themselves, electric utility companies are already beginning to sell off parts of the business, consolidate resources, or merge with other companies. Power plants of all kinds will survive in an open market only if they generate electricity at competitive prices. But achieving competitive prices may not be possible for some nuclear power plants without compromising safety.

Recent studies indicate that the majority of the 108 operating nuclear plants are likely to survive and operate safely, since their generating costs will be competitive in an open market. The studies also conclude that other nuclear plants -- anywhere from 5 to 37 plants -- will not be able to compete and will probably be shut down.

The range of estimated closures implies that some nuclear plants face an uncertain future: they will survive only if they can cut costs. Although all power plants will be under increased competitive pressure to cut costs and raise profits, these pressures will be extreme for plants that are economically marginal. And extreme pressure to cut costs at marginal nuclear plants has one very serious possible consequence: it could reduce the margin of error on safety.

In some cases, this potential has already been realized. For example, the Nuclear Regulatory Commission attributed safety problems at the closed Maine Yankee nuclear plant to "economic pressure to be a low-cost energy producer" -- pressure that limited available resources for repairs.

The erosion of safety margins can be subtle. Utility companies are downsizing their staffs through early retirement and voluntary separation programs. These programs target senior employees receiving high compensation. The departure of these employees lowers the corporate experience level and may increase the frequency of human error, a significant factor in many nuclear safety events.

Other incursions into safety margins are more obvious. Some nuclear utilities are reducing costs by scaling back safety monitoring efforts. Nuclear plant owners are inspecting and testing safety equipment less often and postponing more preventive maintenance activities.

It is essential to evaluate the cumulative effect of cost-cutting measures on nuclear safety levels, instead of considering their consequences individually. A bee sting is painful, but it is generally not life-threatening. A thousand bee stings are a completely different story. The backlog of problems at Maine Yankee grew to nearly 3,200 items in 1996, including over 100 high-priority problems that were not fixed during an outage in 1995. No single item seemed serious in itself, but the combined impact of so many small problems forced the plant to shut down in December 1996 for necessary repairs, and to close permanently in May 1997.

In addition to potential problems caused by cost cutting, the proposed electricity market will pose other nuclear safety challenges, especially concerning delivery of electricity to nuclear plants. Nuclear plants need electricity from off-site power producers to operate equipment, including safety systems. Off-site electricity is delivered to the nuclear plant through the grid system of transmission lines, substations, transformers, conductors, relays, and breakers. Under restructuring, the owners of the generating segment of the industry will not necessarily be the same as those of the transmission and distribution segments. As a result, nuclear power generators will no longer have guaranteed and reliable access to electricity from the grid. But disconnecting a plant from the grid has triggered many serious nuclear plant accident scenarios. The Chernobyl disaster began as a simple test to see how well the doomed plant could provide internal power for equipment when its connection to the grid was lost.

The reliability of the electrical grid system itself may decrease because of increased use of transmission equipment after restructuring. To maximize revenue, the companies owning the transmission infrastructure, who collect fees for transmitting electricity from producers to users, will keep as much transmission equipment operating as possible. But increased usage of transmission equipment means fewer opportunities for preventive grid maintenance and reduced availability of backup equipment. Thus, electrical grids may experience more frequent disturbances like the ones that plunged a large portion of the western United States into darkness in July and again in August 1996. This possibility could place nuclear power plants at increased safety risk.

The potential nuclear safety hazards associated with a competitive electricity market require the vigilant attention of federal regulators. First and foremost, the Nuclear Regulatory Commission must rigorously enforce its existing safety regulations -- which it has consistently failed to do. These standards are designed to protect the public from the inherent dangers of nuclear power. But regulations can offer protection only when they are enforced.

Nuclear power plant owners also bear a heavy burden of responsibility. Public health simply must not be compromised, no matter how nuclear utilities deal with restructuring. Nuclear plant owners must promptly detect and correct problems in order to maintain adequate safety levels under restructuring. Nuclear plant owners have a legal and moral obligation to protect public health and must not sacrifice safety in a rush to reduce costs.

UCS is working on this issue as part of our nuclear safety program. We are closely monitoring 10 representative plants nationwide to ensure that safety margins are not compromised. And we were instrumental in bringing to light many of the safety problems at the Maine Yankee plant. UCS will continue to be vigilant in ensuring that safety receives the attention it requires as nuclear plants face the future.

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