Want More Green Energy? Roll Back The Red Tape On Nuclear

Posted on Thu 08/20/2009 by


By Nick Loris

Despite the growing rhetoric in favor of affordable and clean energy in the United States, the regulatory trend is moving in the opposite direction. A recent article from Platts emphasizes the increasing regulatory costs for the nuclear industry:

“Benjamin Fowke, Xcel’s CFO, said in a second-quarter earnings conference call in late July that nuclear operating costs “probably” will continue to grow as US Nuclear Regulatory Commission regulatory fees and security requirements increase.

“We are seeing — and it is not just this year, it has been over several years now — a lot of increased security requirements, worker fatigue requirements, increased Nuclear Regulatory Commission (NRC) fees — and they are not going away. They just keep coming,” he said.

Xcel spokeswoman Mary Sandok said in an e-mail Friday that NRC’s per reactor and inspection fees, combined with fees charged by other federal and state agencies and entities, had been growing at annual rate of 10%-12%. She said new NRC regulations, especially fitness-for-duty and fatigue rules that are taking effect this year, are significantly increasing staffing and other costs. “The cost increases are affecting nuclear plant operations nationwide,” she said.”

Regulatory preparedness is important, especially in the nuclear industry where public health and safety are and should be top priorities. Not one person has been injured as a result of commercial nuclear power in the U.S.—not even at Three Mile Island. Market viability is also important. And nuclear power now has a history of commercial success. Despite a radical anti-nuclear environmental movement, over-regulation, and too much government intervention, 104 reactors still provide Americans with 20 percent of their electricity emissions-free.

Despite this established track record of commercial viability, the fact is that overregulation is a primary reason for U.S. nuclear stagnation over the past three decades. Instead of working toward real regulatory reform, many proponents of nuclear power are more interested in mitigating regulatory risk by securing subsidies, mandates, and other taxpayer support. While such an approach may guarantee that whatever number of reactors the government decides to build will be built, it also guarantees that those reactors will cost too much and that the U.S. will never have a truly viable nuclear industry. The nuclear industry will be little more than another function of government.

Instead, the U.S. Congress and the Administration should institute a set of market-based policies that frees the nuclear industry to compete. It will be competition in the free-market that will yield a competitive, diverse, and sustainable nuclear industry. The market should dictate how many reactors get built in the U.S.—not a bunch of Washington bureaucrats.

To move the U.S. toward a market-based nuclear energy policy, Congress and the Administration should:

Develop an Expedited Process for New Reactor Permits: The current schedule dictates that the NRC take four years under a best-case scenario to permit a new power plant. The NRC collaboratively with Congress should develop an expedited process for applicants that preemptively meet certain conditions. (link to pitts paper)

Develop a Faster Process for Reactor Design Certification: A reactor design must be certified by the NRC before it can be used in a new power plant. This process should be streamlined, without sacrificing quality or safety, to allow for more efficient certification.

Open Up to New Technologies: The NRC is currently very adept at regulating light-water reactors (the type of reactor in the U.S.) in a relatively slow growth environment; however, it is not prepared to efficiently regulate a diverse, growing, market-driven industry that could produce reactors both large and small. This becomes an obstacle to the introduction of new technologies. NRC must be reformed to allow for more competition within the nuclear industry.

Begin Rulemaking for Reprocessing: While a geologic repository is crucial under any scenario, growth in nuclear power will likely necessitate that the U.S. also develop a reprocessing capacity as well, to help manage spent nuclear fuel. While the private sector should determine if such a facility is needed, the NRC should begin the rulemaking process now.

Contributing Author Nick Loris writes at The Heritage Foundation and he is a Research Assistant at The Heritage Foundation’s Roe Institute for Economic Policy Studies.

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