Sunday, August 23, 2009

NRC clears Indian Point on safety issues

You know it don’t come easy

The NRC said Aug 12 Entergy’s Indian Point nuclear power station has no safety issues that would stop the agency from issuing a license for it to operate for another 20 years. The agency issued a Safety Evaluation Report (SER) that contains its formal finding. A review of environmental issues is still in progress. In a press statement the NRC said . . .

“The results show that the applicant has identified actions that have been or will be taken to manage the effects of aging in the appropriate systems, structures and components of the plant and that their functions will be maintained during the period of extended operation.”

The State of New York has opposed re-licensing Indian Point. New York State Attorney General Andrew Cuomo has called the twin reactor site, which is 40 miles north of Manhattan, “a danger to New Yorkers.” The state government has continued to try to shut down the reactors despite a commitment by Entergy to spend over $100 million on plant improvements following the recommendations of an independent safety evaluation last year.

The NRC, which has sole authority over the license, said in its statement, “Issuing the final SER is a significant milestone in the license renewal review process.”

The next step is the SER and the license renewal application have been provided to the ACRS, an independent body of experts that advises the NRC on reactor safety matters. The ACRS will discuss the SER during its Sept. meeting.

NY Post asks who's on first?

The New York Post published an editorial Aug 16 in which it said the decision comes not a moment too soon because, despite the current recession, demand for electricity is growing in the New York region.

The newspaper also asked why the state opposes the license renewal when "it has no real plan to replace the electricity that would be lost." Finally, the editorial points out an energy plan released by New York Governor Paterson describes the "potential impacts of closing Indian Point including higher electricity prices and more CO2 emissions."

You have to ask the question of who is in charge in New York, Gov. Patterson or Mr. Cuomo?

Prior Coverage on this blog

Ringo Star – It don’t come easy

So here’s a musical tribute to the licensing team at Entergy’s Indian Point plant who beat the reaper and are well on their way to another two decades of safe operations.

His best song.

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A hardball pitch to save Vermont Yankee

Anti-nuclear groups are vulnerable on the cost of replacing nuclear energy with fossil sources

Flaming Fastball A trade association in Vermont is throwing a blazing fast ball right down the slot at Vermont anti-nuclear groups. It is a hard edged appeal to businesses and consumers over the issue of the cost of getting electricity to replace the Vermont Yankee nuclear plant. The plant, owned by Entergy (NYSE:ETR), has applied for a renewal of its license which expires in 2012. The Vermont Energy Partnership (VEP) in its summer 2009 newsletter to business groups makes it clear closing the plant by 2012 will hit industry and consumers right in the pocketbook.

Vermont Senate Leader Peter Shumlin (D-Windham) and the Vermont Public Interest Group (VPIG), among others, have vigorously sought to shut down Vermont Yankee and deny it a 20-year extension of its NRC license. They’ve taken both the high and the low road in this quest, so it should come as no surprise that a strong backlash from people with a big economic stake in keeping the plant open should appear at this time.

The business group, which includes some of the state’s largest employers, has published forecasts that if Vermont Yankee’s license is not renewed, then the utilities that buy electricity for under $0.05/Kw will have to acquire it from fossil fueled plants at 19-39% more than what they pay now.

Vermont's future is dim without nuclear energy

Accord to the study by Howard Axlerod, Ph.D., a consultant with Energy Strategies of Albany, NY, Vermont’s economic future “is dim without the plant.”

A home using 1,200 KWH a month would pay $23 more per month or $276 more a year. Multiply that number by 100,000 homes, and the increased cost represents a massive transfer of wealth out of the state to the owners of fossil fuel power plants.

The impacts on discretionary spending by consumers on retail goods would be significant. it would represent a withdrawal of nearly $30 million from shopping for groceries, dry goods, household items; and, durable goods like appliances and cars. it would also negatively impact spending on eating out, movies, and even winter ski passes.

Axlerod also said that Vermont would lose 30% of its electricity supply if the reactor closed and this could lead to shortages of electricity. Vermont Energy Partnership CEO Brad Ferland wrote in the summer issue of his group’s newsletter that Vermont’s low electricity rates make the difference for some businesses, and the jobs they support, between staying in business and closing their doors.

Turning on the lights could get expensive

Axlerod put the case in even starker terms.

“I’m not saying the state would go black . . . you will get electricity, but it will be expensive. If you are at the whim of the market, customers will go ballistic on you. Electric bills that were $200/month could become $1,000 or more.”

Axleod has made his case to the Vermont legislature testifying earlier this year to a joint hearing of the House and Senate Natural Resources and Energy committees. He points out that if Vermont Yankee is forced to close by 2012, the state will not have enough time to secure reliable and cheap electricity. It could come even faster as the utility has a major outage scheduled in 2011. It would make no sense to reopen once it shut down for the outage.

Greenhouse gases would increase

Gift_Horse

In a shot at green groups who have engaged in attacks on Vermont Yankee, Axlerod said fossil sources obtained on the spot market will increase CO2 emissions by two million tons to make up for the lost electricity from Vermont Yankee.

Ferland added to Axlerod’s analysis that Vermont’s clean carbon footprint is a “gift horse.”

He notes that despite very strong promotion of renewable energy sources, few are willing to commit to long-term energy contracts with predictable pricing.

Cost message could scare the pants off businesses

The Vermont Energy Partnership is making its case primarily to business groups. It is taking a low key approach to getting its message out, and has not been visible in news media coverage quoting supporters of the plant. Some observers in Vermont who support the nuclear plant wonder how serious the group is about its message.

mister-t Yet, the group’s hardball message about costs of not having Vermont Yankee should scare the pants off retailers and manufacturing operations.

As the TV celebrity Mister-T might say if he knew about the situation, “I pity the fool” who doesn’t get the message about costs. Of course, he didn’t say that, but maybe VEP should hire him to raise its nearly invisible media profile.

However, by presenting Axlerod and his message of “lights out” front and center to the legislature, the group hopes elected officials will get the message that they will be blamed for high electricity prices if they are successful in closing Vermont Yankee.

The hardball approach is tempered by an article written for VEP by Shawn Shouldice who runs a government relations firm in Montpelier, VT. She notes that the NRC is likely to approve Vermont Yankee’s license renewal application. The various agencies of Vermont government could also sign off if a legislature that understands the cost issues agrees when it convenes next March.

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San Antonio uneasy about its nuclear future

South Texas Project get challenges about rates and costs

SanAntonio1The headlong Texas land rush into a future robust with new nuclear reactors, at one time rivaling China in the number of planned new construction projects, could be slowing down. Elected officials and citizens groups in Texas are asking tough questions about costs and safety.

In the case of the South Texas Project (STP), CPS Energy, the San Antonio municipal utility that is an investor in the first two units, is getting a “whoa there” tug on the reins from the city’s mayor. Julian Castro, newly elected Mayor of San Antonio, told CPS on Aug 6 he wants the utility “to take a closer look at the nuclear option.“

MayorJulianWhat Castro, (left) who at 34 is the youngest mayor of a major American city, is really saying is the CPS does not have his back, politically speaking, since anti-nuclear opposition groups have sprung up.

They want the mayor to submit the CPS deal to a popular vote, which would be disastrous for CPS, the rate payers, and NRG. The mayor is not anti-nuclear. He just doesn't want to get his butt shot off by irate voters who might think CPS is out in front of his political headlights. He's telling CPS to make the case for nuclear so he can agree with it.

“We need to make this as transparent as possible, within the confines of a business deal. And the public process, up to now, I believe, is not what the public expected.”

CPS CEO Milton Lee agrees telling the San Antonio Express on Aug 20, “CPS Energy has done a lousy job of explaining its reasons for wanting to increase its investment in nuclear energy.”

That frames with Mayor’s problem, but is there more to it?

What’s the deal with NRG?

transformerstation CPS is proposing to sign a deal with NRG, the developer of STP units 3&4, to invest in 40% of the capacity of the two plants and re-sell 20% to other utilities to reduce the cost of the juice the utility sells to customer at home. For the Mayor’s part, he says that re-selling electricity “goes beyond the utility’s core mission.”

CPS points out that they’ve already signed contracts with customers for half of the electricity they plan to sell from the new NRG reactors. CPS manager Steve Bartley told the San Antonio Express Aug 13 . . .

“If you can get customers to say they’re interested in buying before the project is completed, it doesn’t get any better than that. These folks are showing interest 11 years before the power will be there.”

Mayor Castro told the newspaper he knows about the contracts. He says a key issue for ratepayers is a series of rate increases that will come with the investment.

While NRG hasn’t put a price tag on the 40% share, CPS has already spent $276 million as up front money on engineering and permitting costs for the two new reactors. The final cost to CPS of the expected $10-13 billion project could be as much as $5 billion.

The utility must come to the city council in September to ask permission to issue $400 million in bonds to pay for new costs. The bonds will be repaid through a series of biannual rate increases of about 5% each through 2016 which is when the first reactor is expected to enter revenue service.

Less Powerpoint, more Q&A in public meetings

The utility is responding to the Mayor’s concerns by spending more time listening and less time flogging slide presentations at public meetings. The utility is also highlighting its efforts at promoting energy conservation.

The Mayor says he wants dialog not one-way communication. One of his reasons for stepping out now is that he sits on the board trustees for the utility.

one way signAlso, he came into office reportedly with a low confidence rating from the business community and a history of “flip flopping on issues” according an Aug 9 editorial in the San Antonio Express. The Mayor now takes an unexpectedly bold course to bolster his standing with key rate payers in that same business community.

“This is not talking down. This is engagement with the community. We want folks and the city council to get the information they need and to believe that have a role in the process.”

The Mayor may be getting more than he bargained for. Pressure on CPS is also coming from citizens groups. One called Energia Mia turned out in force holding a news conference ahead of one of CPS’ public meetings.

About 50 people showed up wearing T-shirts with anti-nuclear slogans. Cost is the hot topic for the group, which is a coalition of neighborhood groups, but some are also worried about contamination from nuclear waste. Local problems with Kelly Air Force base have the groups riled about environmental issues and they’ve developed a “you’ve seen one you’ve seen them all” attitude about large facilities.

In an effort to reclaim control of the political messaging, the Mayor is holding his own town meetings in the city council chambers. He’s limited CPS to a five minute summary level presentation and then will open the floor to questions. He will lead the meetings.

Slashed Investment could make NRG nervous

One of the “alternatives” Castro has tossed out is to reduce the investment by CPS in NRG from 40% to 20%. This would eliminate the utility’s plan to re-sell 20% of the power it buys from NRG to reduce the cost of electricity to San Antonio rate payers.

NRG GEH ABWRThis makes NRG nervous since they already lost the city of Austin, TX, an investor in STP 1&2, as an investor in units 3&4.

To counter criticisms about cost, NRG points out that Toshiba, which will build two GE-Hitachi 1,350 MW ABWR reactors, has a 12% stake in the project and a commitment to cost control through an agreement to sign a fixed price contract to build them.

NRG expects the NRC to issue a license to the project in 2012 at which time it will break ground. By then it needs all of it investors lined up to pay for the new reactors.

CPS' CEO Lee thinks his utility will prevail in its plans to invest in 40% of the project. He says that natural gas prices are too volatile and when the price soars into the stratosphere, the costs get passed on directly to rate payers.

He points out the reactor site has the water and transmission and distribution infrastructure to support four units. Plus, he points out Matagorda County is a willing host for the new plants. Ultimately, Lee thinks people will opt for a steady and predictable rate structure from nuclear energy compared to gas costs.

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