In 1917, the renowned British physicist Ernest Rutherford bombarded light atoms with alpha rays and observed outgoing protons of energy larger than that of the incoming alpha particles. He concluded that the bombardment had converted nitrogen atoms into oxygen atoms. Rutherford thus became the world’s first person to split the atom. Although the first commercial nuclear power plant in the United States—the Shippingport Atomic Power Station—would not supply electricity to the grid until December 1957, Rutherford set the stage for the world’s nuclear power industries in his Manchester laboratory that day one hundred years ago.1 This article discusses the development of the commercial nuclear power industry in the United States, the regulatory impact of the more significant events since its inception, and what the coming years may bring.
August 01, 2017
Accidents and Innovation Shaping the Nuclear Regulatory Landscape
By J. Bradley Fewell, Donald P. Ferraro and Darani Reddick
I. The First 100 Years
A. The Atomic Energy Acts of 1946 and 1954
The development and ultimate use of atomic bombs against the Japanese cities of Hiroshima and Nagasaki in August 1945 alerted the world not only to the destructive powers of nuclear energy, but also to its potential peaceful uses, including the production of electricity. The U.S. government realized the great potential in this regard, but wanted to balance this potential against the need to maintain control over the technology and develop its military applications. With those considerations in mind, Congress enacted the Atomic Energy Act of 1946 to promote the “utilization of atomic energy for peaceful purposes to the maximum extent consistent with the common defense and security and with the health and safety of the public.” The 1946 Act provided for the formation of a five-member U.S. Atomic Energy Commission (AEC), but did not allow for private, commercial application of atomic energy. Instead, it created a virtual government monopoly of the technology.
In the early 1950s, several factors led Congress to enact a new statute to address atomic energy. The United States was falling behind other nations, particularly Great Britain, which had the world’s first commercial nuclear power station, Calder Hall, in developing peaceful atomic energy. Moreover, the United States feared that the U.S.S.R. could soon surpass it as well. The actual need for long-range energy sources was a secondary consideration.2
The 1954 Act permitted for the first time the broad use of atomic energy for peaceful applications, ended the government’s monopoly on technical data, and made the growth of a commercial nuclear industry an important national goal. The Act instructed the AEC to promulgate regulations to address three major functions: (1) continue the AEC’s weapons program, (2) promote the commercial uses of nuclear power, and (3) protect against the hazards of those peaceful applications. It also described the new two-step procedure for granting operating licenses; first, the AEC would issue a construction permit if it approved the licensee’s safety analysis and later, after it determined that the plant met safety requirements, the AEC would issue an operating license. By August 1955, five power companies had announced plans to build nuclear plants.
B. Price-Anderson Act (1957)
Other companies were also interested in investing in nuclear power plants, but were put off by the potential liability of an unlikely but potentially costly nuclear accident. At the time, private insurance companies would offer up to $60 million in coverage per reactor, an amount that far exceeded what was available to any other industry in the United States.3 But this was not enough to persuade some companies to commit to building a nuclear power plant, so there was a push in Congress to make additional, government-funded, liability insurance available to prospective nuclear plant licensees. Consequently, in 1957, Senator Anderson and Congressman Price proposed legislation that the government underwrite $500 million of insurance beyond the $60 million already available from the private insurance companies. The AEC subsequently promulgated implementing regulations in 10 C.F.R. Part 140.
C. Environmental Concerns
The early to mid-1960s saw significant increases in the number of new nuclear plant orders and concerns from the industry and the public about the potential environmental effects, particularly from thermal pollution and radiation exposure, of these new plants. Critics of the AEC urged it to regulate the effects of thermal pollution, but the AEC refused because it believed that it lacked the statutory authority to impose regulations on hazards other than radiation. The AEC argued that the Atomic Energy Act of 1954 restricted its regulatory jurisdiction to radiological dangers, a view that the U.S. Department of Justice and federal courts upheld.4
Beginning in the late 1950s and into the 1960s, the public became increasingly aware of and concerned about environmental impacts, including thermal pollution, from power plants. On January 1, 1970, President Nixon signed the National Environmental Policy Act of 1969 (NEPA, 42 U.S.C. §§ 4321–4347) into law. NEPA requires federal agencies to provide a detailed analysis of environmental impacts, now referred to as an environmental impact statement (EIS), for major federal actions significantly affecting the quality of the human environment. As a procedural statute, NEPA requires only that the agency assess the environmental consequences of an action and its alternatives before proceeding.
For its part, the AEC acted promptly to comply with NEPA, proposing regulations in May 1970 that took a seemingly narrow view of its responsibilities. Several weeks later, several environmental groups filed a petition for rulemaking with the AEC, asking that BG&E, the prospective Calvert Cliffs licensee, be required to comply with NEPA. The AEC’s proposed NEPA rules did not apply to plants under construction, such as Calvert Cliffs, but only to plants that were built and whose owners had applied for operating licenses. The petition asked that NEPA also be applied to plants under construction and that the Calvert Cliffs construction be suspended until the potential environmental impacts could be properly evaluated. The AEC, however, denied the petition because its NEPA regulations had not yet been finalized and promulgated.
Subsequently, in November 1970, the environmental groups appealed to the U.S. Court of Appeals for the District of Columbia Circuit. Several weeks later, the AEC issued its revised NEPA regulations and the environmental groups challenged them in the same court. After reviewing briefs and hearing oral argument, the court issued its decision in July 1971. In a total defeat for the AEC, the court found that the AEC’s NEPA regulations did not comply with NEPA. The AEC decided not to appeal the decision and issued revised NEPA regulations in September 1971. Changes to the new regulations included requiring applicants for construction permits to comply with NEPA, analyzing the potential impacts of several nuclear accidents, and performing a cost-benefit analysis of building proposed plants.
Today, under the Nuclear Regulatory Commission’s (NRC) regulations implementing NEPA, NRC is also required to prepare an EIS as part of its review of reactor operating license applications, including renewed operating licenses. To date, most of the litigation surrounding operating license applications concerns challenges to generic rulemakings, focused on terrorism, seismology, and radioactive waste disposal. Some of these litigations have delayed, but few have terminated the subject operating license proceedings.
D. Nuclear Mutual Limited Formed (1973)
Even though the Price-Anderson Act provided additional insurance beyond the $60 million already available from the private insurance companies, many prospective licensees considered the cost of the projected insurance premiums to be prohibitively high. In response to those concerns, several utilities considered forming an insurance company owned by the utilities and operating on a mutual basis. Subsequently, on January 1, 1973, fourteen utilities formed Nuclear Mutual Limited, a Bermuda insurance company, to issue nuclear property insurance policies with a limit of $100 million for operating plants and those under construction. By 1979, it had increased the amount of insurance it offered to $300 million.
The March 1979 accident at Three Mile Island (TMI) challenged basic assumptions about the hazards of nu- clear power plants and made it crystal clear that the amounts of insurance available at the time were inadequate. General Public Utilities (GPU), the owner of TMI, faced severe financial difficulty after the accident because the commercial market was not willing to provide the insurance to allow GPU to operate the undamaged unit, which was essential for obtaining critical financing. In direct response to the TMI accident, the NRC adopted the property insurance rule, 10 C.F.R. §50.54(w), out of concern that licensees may be unable to cover the onsite cleanup costs resulting from a nuclear accident. This regulation requires $1.06 billion in coverage and also mandates that any insurance proceeds be first allocated to stabilizing and decontaminating a reactor after an accident before any damaged property is repaired or replaced. As a result of these developments, Nuclear Electric Insurance Limited (NEIL) was formed in 1980 to provide accidental outage coverage for replacement power costs, and $500 million of excess property insurance coverage. NML and NEIL operated as separate companies until 1997, when they were merged together into NEIL, which today has the ability to pay two full limit nuclear policy losses equal to $6.48 billion.
E. Energy Reorganization Act of 1974
To address concerns about the AEC’s dual role of both promoting nuclear energy and regulating it at the same time, Congress enacted the Energy Reorganization Act of 1974 (42 U.S.C.A. §§ 5801 et seq.). These amendments to the Atomic Energy Act of 1954 abolished the AEC and created two new administrative agencies: the Energy Research and Development Administration (ERDA), now the Department of Energy, to develop and promote energy sources, and the NRC to independently regulate the burgeoning nuclear industry. All of the AEC’s non-regulatory functions were transferred to ERDA to consolidate the federal government’s fragmented and uncoordinated research and development efforts. ERDA’s primary mission was to develop the technology necessary to enable the United States to attain energy self-sufficiency by 1984.5
The NRC inherited all of the AEC’s licensing and related regulatory functions. In contrast to ERDA’s developmental-promotional goals, the NRC’s purpose was to ensure safety and security in the nuclear industry. The NRC internal organization was designed to ensure a neutral and technically sound regulatory process focused exclusively on safety and security oversight.6
F. Browns Ferry Fire (1975)
In March 1975, workers at TVA’s Browns Ferry Nuclear Power Plant were testing the seal of a cable penetration through the reinforced concrete wall between the reactor building and the cable spreading room. The design of the seal included a polyurethane insulation. The workers were using a candle to detect seal leaks, but the candle flame ignited the polyurethane and the fire traveled along the cables into the reactor building. TVA personnel were able to extinguish the fire in the cable spreading room after about four hours, but the fire in the reactor building burned for over seven hours before it was extinguished. Safety-related equipment in both Division I and Division II safety trains was affected by the fire.7 This was a serious failure of the plant’s safety program.
As a result of the Browns Ferry fire, the NRC required all domestic nuclear plants to modify their fire protection programs and issued a Branch Technical Position, giving guidance to the licensees about the required fire protection programs at commercial nuclear power plants. The NRC required licensees to conduct a Fire Hazards Analysis at each power plant and in 1980, issued 10 C.F.R. Part 50, Appendix R, which further codified the minimum levels of fire protection.8
In 2004, the NRC modified its fire protection regulations to allow licensees to adopt, on a voluntary basis, National Fire Protection Association (NFPA) Standard 805, “Performance-Based Standard for Fire Protection for Light-Water Reactor Electric Generating Plants” (NFPA 805), in lieu of their existing fire protection licensing basis. NFPA 805 is a methodology for existing light-water nuclear power plants to apply risk-informed, performance-based requirements and fundamental fire protection design elements to establish fire protection systems and features required for all modes of reactor operation. In addition, it provides a methodology for establishing fire protection procedures, systems, and features for nuclear power plants that are decommissioning and permanently shut down.9
G. Accidents at Three Mile Island (1979) and Chernobyl (1986)
The seminal event for the United States nuclear industry was the March 1979 accident at TMI in Middletown, Pennsylvania. The accident at Unit 2 was caused by a combination of equipment failure and the inability of plant operators to understand the reactor’s condition at certain times during the event. A gradual loss of cooling water to the reactor’s core led to melting of about half of the fuel rod cladding and the uranium fuel and the release of a small amount of radioactive material—less than 20 curies of the 66 million curies of iodine-131 in the reactor at the time of the accident.10
Prior to the accident, the NRC and most experts believed that the worst case loss-of-cooling accidents would be from large pipe breaks, but this was not the case at TMI, where the precursor event was a relatively low-flow leak from a stuck open pressurizer relief valve. To address this consequence and the other lessons learned from the accident, the NRC implemented broader and more robust regulations. Significant changes resulting from the TMI accident include:
• Upgrading and strengthening plant design and equipment requirements;
• Revamping operator training and staffing requirements in recognition of the critical role of human performance in plant safety;
• Enhancing emergency preparedness requirements;
• Expanding NRC’s resident inspector program to have at least two inspectors work exclusively at each plant in the United States to provide daily surveillance of licensee adherence to NRC regulations; and
• Establishing the Institute of Nuclear Power Operations and formation of what is now the Nuclear Energy Institute to provide a unified industry approach to generic nuclear regulatory issues and interaction with NRC and other government agencies.11
On April 26, 1986, operators at the Chernobyl nuclear power plant in Ukraine were conducting a reactor systems test on one of the four reactors that required the plant to operate at very low power. Unlike the reactors licensed in the United States, the Chernobyl reactors were of a unique design that was highly unstable at low power. The operators ran the test without adequate safety precautions and without properly coordinating or communicating the procedure with safety personnel. These factors contributed to an uncontrollable power surge that caused a steam explosion, which lifted the 1,000-metric-ton cover off the top of the reactor, rupturing the 1,660 pressure tubes, causing a second explosion, and exposing the reactor core to the environment.12
The resulting fire burned for ten days, releasing a large amount of radiation into the atmosphere and causing significant health effects from radiation exposure. Twenty-eight reactor staff and emergency workers died from radiation and thermal burns within four months of the Chernobyl accident. Officials believe the accident also was responsible for nearly 7,000 cases of thyroid cancer among individuals who were under eighteen years of age at the time of the accident.13
The Chernobyl accident could not occur at a United States light water reactor. Differences in plant design, broader safe shutdown capabilities, and containment structures ensure that domestic reactors cannot be maneuvered into similar circumstances. Nevertheless, the NRC’s post-Chernobyl assessment examined whether changes were needed to NRC regulations or guidance on accidents involving control of the chain reaction, accidents when the reactor is at low or zero power, operator training, and emergency planning.14
H. Realism Rule (1988) and the Combined Licensing Process (1989)
After the TMI accident, the NRC adopted a new rule on emergency planning that applied to operating plants as well as to those under construction. The new rule required each licensee to devise a plan for evacuating the population within a ten-mile radius of its plant in the event of a reactor accident. It also required plant owners to work with state and local police, fire, and civil defense authorities to cooperate on execution of the emergency plan.
The NRC lacked the authority to force state and local governments to participate in emergency preparedness plans, however, and two states took advantage of that deficiency—New York and Massachusetts regarding the Shoreham and Seabrook plants, respectively. Those states were opposed to licensing of the two plants and significantly delayed the licensing process by refusing to participate in the emergency planning activities contemplated by the NRC regulations.
To address New York’s and Massachusetts’ positions on Shoreham and Seabrook, in 1988, the NRC promulgated 10 C.F.R. § 50.47(c)(1), known as the “realism rule,” based on the premise that in an actual emergency, state and local governments would make every effort to protect public health and safety. Section 50.47(c)(1) provides means for an applicant to obtain a license when state or local governments decline or fail to participate adequately in offsite emergency planning. In such cases, the NRC and the Federal Emergency Management Agency would review and evaluate plans developed by the utility.
Ultimately, New York and Shoreham’s owner, Long Island Lighting Company, reached a settlement in which the company agreed not to operate the plant in return for concessions from the state. As for Seabrook, the NRC issued an operating license based upon the realism rule.
Because of inefficiencies and untenable delays associated with the existing two-step licensing process—as plainly illustrated in the Shoreham and Seabrook licensing sagas—the NRC established new alternatives for nuclear plant licensing in 1989 when it promulgated 10 C.F.R. Part 52, which describes a combined construction and operation licensing process, an early site permit process, and a standard plant design certification process. Unlike the two-step process, the combined licensing process allows prospective licensees to re-evaluate their decision to proceed at various points in the process without incurring debilitating losses constructing a plant that may never be licensed to operate.15
The NRC’s new reactor regulations, implemented in April 1989 and found in Part 52, also provide a more predictable review to approve or certify new nuclear plant designs. Design certification applicants must demonstrate that their design meets the NRC’s safety standards and also show that their design resolves any existing generic safety issues. Applications must analyze the design’s appropriate response to accidents or natural events, including lessons learned from the Fukushima Dai-ichi accident (infra). The NRC certifies acceptable reactor designs through a rulemaking, which certifies a design for fifteen years, and a reactor vendor can seek renewal of a certified design. To date, the NRC has certified five designs; two of those approvals have expired.
I. License Renewal Rule (1991)
After considering the issue for several years, the NRC approved in 1991 a regulation on the technical requirements to allow renewal of an operating license for an additional twenty years, 10 C.F.R. Part 54. In 1995, the NRC amended the rule to implement a more efficient, stable, and predictable process. The rule changes were intended to ensure that important systems, structures, and components would continue to perform their intended function during the twenty-year period of extended operation. In parallel with aging management efforts, the NRC pursued a separate rule, 10 C.F.R. Part 51, to address environmental reviews. Under NEPA and as discussed above, the NRC must review the environmental impact of license renewal.16
To date, the NRC has renewed the operating licenses of eighty-one reactors and is reviewing renewal applications for eleven others. Companies have notified the NRC of plans to submit license renewal applications for six more reactors by mid-2022.
J. Millstone
In the early 1990s, several Millstone Power Station employees claimed that they were harassed, intimidated, or dismissed from their jobs by the plant’s owner, Northeast Utilities (NU), for calling attention to safety problems and violations of NRC regulations. The NRC concluded that the utility had harassed employees and fined it $100,000 on three separate occasions in 1993, 1994, and 1996. The NRC identified hundreds of performance and procedural deficiencies and took the unusual step of requiring the utility to ask it for permission to restart Millstone’s three units, all of which had been shut down, through a formal vote of the Commission.
In 1997, the NRC imposed a fine upon Northeast utilities of $2.1 million—nearly twice the next largest fine the agency had previously imposed.17 The NRC also directed NU to devise and implement a plan for handling employees’ safety concerns and included an unprecedented requirement: NU had to demonstrate a “safety-conscious work environment” at Millstone in which employees could raise concerns without fear of retaliation—and management would take appropriate action. NU made significant management changes, implemented numerous corrective actions, and decided to permanently close Millstone Unit 1. Subsequently, the NRC authorized the restart of Unit 3 in 1998 and Unit 2 in 1999.
K. Reactor Oversight Process (1999)
Following the TMI accident and throughout the 1980s, nuclear power industry officials complained that many NRC regulations were counterproductive. They particularly objected to the agency’s numerical ratings of plant performance, which they found to be arbitrary and inconsistent. Many in the industry also felt that several of the requirements imposed in response to the TMI accident gave the NRC an unduly intrusive presence in the routine operations of their plants. In view of these concerns, both the industry and the NRC began examining whether incorporating probabilistic risk assessments (PRA) into the NRC’s regulatory scheme could mitigate the problem.18
The Nuclear Energy Institute commissioned a report by the Towers Perrin consulting firm in 1994 to examine those concerns. The report found that the NRC did not sufficiently distinguish between safety and non-safety issues and did not properly prioritize those issues. The Towers Perrin study also found that the NRC regulatory approach was “negative and punitive,” and it urged the agency to place greater emphasis on performance-based assessments. These conclusions were consistent with the industry’s and NRC’s growing interest in utilizing PRA.19 There was significant congressional support for an improved NRC oversight process, particularly from Senator James Inhofe, who was then chairman of the Subcommittee on Clean Air, Climate Change, and Nuclear Safety.
The NRC subsequently implemented the new process in April 2000, which evaluated plants on a series of performance indicators (PI) regarding reactor safety, radiation exposures to workers and the public, and physical protection. A PI is a quantitative measure of a particular licensee performance attribute that shows how well a plant is performing when measured against established thresholds. The new process provides tools for inspecting and assessing licensee performance in a more risk-informed, objective, predictable, and understandable way than the previous oversight process.
L. September 2001 Terrorist Attacks
The September 2001 terrorist attacks in New York, at the Pentagon, and near Shanksville, Pennsylvania, raised several new issues that were not addressed in every plant’s licensing basis, namely: (1) whether nuclear power plants were vulnerable to a terrorist attack that could disable safety systems and breach the three primary fission product barriers, and (2) whether nuclear power plants could withstand an attack by an airplane loaded with fuel, hitting the plant at high speed.
To address these concerns, the NRC issued several Orders (and subsequently conducted rulemakings) that included measures to protect against an insider terrorist attack; waterborne, airborne, and land-based assaults; as well as threats from a vehicle bomb. The specific security measures include increased patrols, augmented security forces and capabilities, additional security posts, installation of additional physical barriers, vehicle checks at greater stand-off distances, enhanced coordination with law enforcement and military authorities, and more restrictive site access controls.
In April 2002, the NRC created the Office of Nuclear Security and Incident Response to serve as the focal point for the NRC’s security programs. In addition, NRC subsequently issued Orders on access authorization in January 2003, and on fatigue, guard training and qualification, and the revised design basis threat in April 2003.
M. Davis-Besse RPV Head Degradation (2002)
During a routine refueling outage at Davis-Besse in March 2002, the licensee, FirstEnergy Nuclear Operating Company (FENOC) was performing reactor pressure vessel (RPV) head inspections in response to NRC Bulletin 2001-01, “Circumferential Cracking of Reactor Pressure Vessel Head Penetration Nozzles.” After removing more than 1,100 pounds of boric acid that had accumulated on the RPV head during the previous operating cycle, FENOC identified a large cavity. Ultrasonic testing showed that the wastage area was approximately five inches deep and four to five inches at its widest part. The minimum remaining thickness of the RPV head in the wastage area was found to be approximately three eighths of an inch. This thickness was attributed solely to the thickness of the stainless steel cladding on the inside surface of the RPV head, which was not designed to be a pressure retaining barrier; its failure could have led to a significant loss-of-coolant accident.
The NRC subsequently issued several generic communications regarding this event.20 In May 2002, the NRC Executive Director of Operations established a lessons-learned task force to evaluate NRC regulatory processes for ensuring RPV head integrity and to recommend improvements for either the NRC or the nuclear industry. In September 2002, the task force reported its findings to a senior management review team, including fifty-one recommendations for the NRC to address factors that contributed to the Davis-Besse event.
In its report issued in November 2002, the senior management review team endorsed all but two of the task force’s recommendations. The approved recommendations were placed into four categories: (1) assessment of stress corrosion cracking; (2) assessment of operating experience, integration of operating experience into training, and review of program effectiveness; (3) evaluation of inspection, assessment, and project management guidance; and (4) assessment of barrier integrity requirements.21 The NRC subsequently generated actions plans to implement each of those recommendations.
N. Energy Policy Act of 2005
In August 8, 2005, President George W. Bush signed into law the first comprehensive energy bill in thirteen years, the Energy Policy Act of 2005. It included incentives for the domestic nuclear power industry, including:
• production tax credit of 1.8 or 2.1 cents/kWh from the first 6,000 MWe of new nuclear capacity in the first eight years of operation (the same rate as available to wind power on an unlimited basis);
• federal risk insurance of $2 billion to cover regulatory delays in full-power operation of the first six advanced new plants;
• federal loan guarantees for advanced nuclear reactors or other emission-free technologies up to 80 percent of the project cost;
• extension of the Price Anderson Act for twenty years for nuclear liability protection; and
• support for advanced nuclear technology.22
Because of the provisions in the energy bill, including the loan guarantee authority, the production tax credits, and the insurance protection against licensing delays and litigation, electricity generating companies and consortiums across the United States began preparing applications to build up to twenty-five new nuclear power plants. But ensuing events and circumstances—including the fall in energy prices, less than expected growth in demand for electricity, and the March 2011 accident at Fukushima Dai-ichi—caused few of these plants to make it past the application preparation stage.
O. Fukushima Dai-ichi (2011)
On March 11, 2011, a 9.0-magnitude earthquake struck off the northeast coast of Japan. Eleven reactors at four sites along the coast automatically shut down after the quake. The six reactors at Fukushima Dai-ichi lost all power from the electric grid and diesel generators provided power for about forty minutes. At that point, an estimated forty-five-foot-high tsunami hit the site, damaging many of the generators. Four of the Fukushima Dai-ichi reactors lost all diesel generator power. The tsunami also damaged some of the site’s battery backup systems.23
Units 1, 2, and 3 at Fukushima Dai-ichi were operating when the earthquake hit. Units 4, 5, and 6 were shut down for routine refueling and maintenance. Steam-driven and battery-powered safety systems at Units 1, 2, and 3 worked for several hours, but eventually failed. All three reactors overheated, melting their cores to some degree and releasing radioactive gas as well as hydrogen. The hydrogen exploded in Units 1, 2, and 4, severely damaging the buildings and releasing more radioactive material from Units 1 and 2. Radioactive contamination spread over a large area of Japan, requiring the relocation of tens of thousands of people.24
The NRC subsequently assembled a task force of experts to examine information from the accident and determine whether any actions were needed to ensure the safety of U.S. nuclear power plants. The task force’s July 2011 report concluded that U.S. reactors can continue operating safely while the NRC considers enhancements to existing safety and emergency preparedness requirements.25 The task force recommended a dozen broad enhancement areas for the Commission’s consideration. Later in 2011, the Commission approved staff proposals for prioritizing the specific actions suggested by the task force, as well as six additional topics related to the events at Fukushima.
The agency issued three Orders in March 2012, requiring U.S. reactor licensees to:
• obtain and protect additional emergency equipment, such as pumps and generators, to support all reactors at a given site simultaneously following a natural disaster;
• install enhanced equipment for monitoring water levels in each plant’s spent fuel pool; and
• improve/install emergency venting systems that can relieve pressure in the event of a serious accident (only for reactors with designs similar to the Fukushima plant).
The Fukushima Dai-ichi accident was the result of a tsunami that exceeded the plant’s design basis and flooded the site’s emergency power supplies and electrical distribution system. This extended loss of power severely compromised the key safety functions of core cooling and containment integrity and ultimately led to core damage in three reactors. The consequences of postulated beyond-design-basis external events that are most impactful to reactor safety are loss of power and loss of the ultimate heat sink. The diverse and flexible mitigation strategies—known as FLEX—are designed to increase defense-in-depth for beyond-design-basis scenarios.26
The NRC has issued a proposed rule that applies the requirements of two existing orders, EA-12-049, “Mitigating Strategies,” and EA-12-051, “Spent Fuel Pool Instrumentation,” to any operating or future U.S. nuclear power plant. The Mitigating Strategies Order ensures that a plant has sufficient procedures, strategies, and equipment to indefinitely cool the reactor core and spent fuel, as well as protect the reactor’s containment, in case of a power loss. The Spent Fuel Pool Instrumentation Order requires plants to ensure they can monitor spent fuel pool water levels. The proposed rule also incorporates several other task force recommendations and addresses the concerns of several Fukushima-related petitions that were submitted by members of the public.27
II. Looking Ahead
While nuclear power provides almost 20 percent of the nation’s electricity generation, several nuclear plants in restructured electricity markets are finding it difficult to adapt to competition from energy sources and flat electricity demand growth. This combination of factors has challenged nuclear power’s place in the nation’s energy mix, drawing the attention of utilities, regulators, federal officials, and state policymakers. Some of the more significant avenues being pursued to address these concerns include new reactor and fuel designs, subsequent operating license renewal, and legislation to compensate nuclear plants for their zero-carbon emissions.
A. SMRs/Advanced Reactors/Advanced Technology Fuel
Today, utilities considering building new nuclear plants have several reactor design options. First utilities can opt for large versions of the light water reactors (LWR) installed at all domestic nuclear plants, such as those being built at Vogtle Units 3 and 4 and V.C. Summer Units 2 and 3. Small Modular Reactors (SMR) are LWR designs generating 300 MW(e) or less; several entities are engaged in SMR pre-application activities and one company, NuScale Power, LLC, recently submitted a design certification application to the NRC.
In July 2013, the U.S. Department of Energy (DOE) and NRC established a joint initiative to address the “General Design Criteria for Nuclear Power Plants” (Appendix A to 10 C.F.R. Part 50) that is specific to the needs of advanced reactor design and licensing. To explore the possibility of constructing new, advanced reactors, the nuclear industry has been asking for General Design Criteria clarifications for non-LWR applications. The initiative is being conducted in two phases: DOE’s first phase efforts are intended to lead to development of draft advanced reactor design criteria while the second phase will consist of NRC’s efforts to review the recommendations and deliverables and to develop regulatory guidance pertaining to the development of principal design criteria for advanced reactor designs.28
The Fukushima Dai-ichi accident highighted an opportunity to develop an improved reactor fuel. Advanced Technology Fuel (ATF) significantly lengthens the time before fuel damage occurs when the reactor core is without cooling. Four primary designs are under consideration: (1) coated cladding, (2) silicon carbide cladding, (3) non-zirconium cladding, and (4) metallic fuel.29
The enhanced safety provided by ATF supports regulatory simplification by enhancing risk-informed re-categorization of structures, systems, and components through 10 C.F.R. § 50.69. It also optimizes security and emergency planning requirements, simplifies FLEX implementation, risk-informs inspection activities, and simplifies significance determinations. The current schedule calls for installation of lead test rods/lead test assemblies by 2018–2019 and full-core reloads by the early 2020s.30
B. Subsequent License Renewal
The NRC’s license renewal rule, 10 C.F.R. Part 54, has been used successfully to renew the licenses of the majority of domestic commercial nuclear power plants for an additional twenty years of operation. By 2040, half of the nation’s nuclear power plants will have been operating for sixty years; as soon as 2030, the United States could experience electricity shortages if a significant number of baseload power plants, including coal and nuclear plants, are retired in a short period.31 A 2014 economic analysis estimated that extending the operating lives of all domestic power reactors to eighty years could save approximately $344 billion through the year 2090, compared to a scenario in which all those units shut permanently after sixty years of operation.32
One solution to avoid retiring a substantial number of nuclear power plants in the coming decades is to renew their operating licenses a second time for an additional twenty years. The NRC has determined that the existing license renewal rule, 10 C.F.R. Part 54, together with updates to two industry guidance documents—NUREG-1801, “Generic Aging Lessons Learned (GALL) Report,” and NUREG-1800, “Standard Review Plan for Review of License Renewal Applications for Nuclear Power Plants”—provide an adequate licensing basis for subsequent license renewal. To date, two utilities have announced they will submit subsequent license renewal applications: Exelon Generation Company, LLC for Peach Bottom Atomic Power Station Units 2 and 3 in mid-2018 and Virginia Electric and Power Company for Surry Power Station Units 1 and 2 in early 2019.
C. Market Considerations
Two recent developments have seriously impacted the prospect of any electric utility adding new nuclear units to meet future load growth. First is the decrease in the cost of natural gas, especially in the United States, because of new finds and the use of fracking. Many of the nation’s nuclear plants continue to lose ground in competition with natural gas-burning generators, which have been selling electricity at rock-bottom prices since domestic gas supplies started booming in the early 2000s as a result of fracking. Gas prices typically set the ceiling for nuclear plant revenues in the two-thirds of the country with competitive power markets. Because of fracking, the amount of proved U.S. natural gas reserves ballooned nearly 80 percent between 2009 and 2014, and gas prices have plunged accordingly, down 70 percent from 2009 to under $3 per thousand cubic feet on average this year. The U.S. Energy Information Administration has lowered its projection of gas prices and now estimates that gas will remain around $5 adjusted for inflation from the mid-2020s through 2040, thereby continuing a financial squeeze on reactors.33 Under these conditions, few, if any, utilities can risk the large capital investment that is required to build a merchant nuclear power plant.
The second development impacting the viability of building new nuclear power plants is the recent bankruptcy of Westinghouse Electric Company and its parent, Toshiba. Since the advent of nuclear power unit construction in the 1960s, the cost increases of nuclear units were directly related to the length of time to build a plant. The NRC and nuclear industry attempted to address this problem in several ways, including instituting the COL regulations and incorporating pre-approved reactor designs, such as Westinghouse’s AP-1000, which is being incorporated at two units at Southern Company’s Vogtle plant in Georgia and two units at South Carolina Electric and Gas Company’s (SCANA) V.C. Summer plant in South Carolina. The construction of these four units has run into such lengthy and costly delays that Toshiba, Westinghouse’s parent, recognized that the obligations of fulfilling the construction contracts represent a financial loss of roughly $6 billion.34 Many energy experts believe Toshiba’s decision to cease building new reactors portends the end of any nuclear construction in the U.S. for the foreseeable future.
In early May 2017, Southern Company and SCANA reached interim agreements with Westinghouse to continue construction on two nuclear plants as Westinghouse works through bankruptcy proceedings. And in June 2017, Georgia Power and its parent company, Southern Co., reached an agreement with Westinghouse to complete the Vogtle project. Under terms of the agreement, Toshiba has guaranteed $3.68 billion in payments to Georgia Power for completion of the project. In late July 2017, however, SCANA announced that it would abandon the two unfinished nuclear reactors at Summer, which had cost roughly $9 billion and were less than 40 percent complete.
D. Legislative Solutions
Even though primary oversight of nuclear facilities falls to the NRC and wholesale market operations are regulated by FERC, state legislatures also play a role in developing policies that can affect the viability of nuclear power. State legislators are exploring policies that support nuclear generation’s carbon-free emissions profile and economic contribution to states by offering tax incentives or imposing a carbon tax, as well as creating statewide mandates requiring utilities to purchase a specified amount of nuclear power. In late 2016, Illinois and New York passed legislation to compensate struggling nuclear plants for their carbon-free attributes. Lawmakers in other states, including Ohio, Connecticut, and New Jersey are debating whether to do the same, but are facing strong opposition from supporters and suppliers of other energy sources, including wind and solar. Several power generators are challenging the states’ decisions in federal court, claiming they violate the FERC’s exclusive authority over wholesale power markets.
III. Conclusion
Since its inception, the U.S. nuclear power industry has lurched through several boom and bust cycles. Presently, it is at a critical stage. The combination of low natural gas prices, falling costs of renewable generation, little load growth, and aging nuclear plants, has caused a number of less profitable nuclear plants to be retired prematurely. Despite the promise of a new generation of reactors, the Westinghouse bankruptcy casts doubt on the near-term ability of domestic utilities to build new plants. If the United States wants to jumpstart nuclear energy, the best route may be to emphasize the low-carbon benefits, either on a state by state basis—as Illinois and New York have done—or through as yet to be seen national legislation.
Endnotes
1. The world’s first commercial nuclear power station, Calder Hall at Windscale, England, began operations in 1956 with an initial capacity of 50 MW(e).
2. J. Samuel Walker & Thomas R. Wellock, A Short History of Nuclear Regulation, 1946–2009 3 (2010).
3. Id. at 15.
4. Id. at 40.
5. Louise Carol Gross, The Energy Reorganization Act of 1974: More Power to the People?, 7 Loy. U. Chi. L.J. 410, 421 (1976).
6. Id.
7. Joseph H. Talbert, Remembering the Browns Ferry Fire, 40 Years On, Nuclear Eng’g Int’l (Mar. 22, 2015), http://www.neimagazine.com/features/featureremembering-the-browns-ferry-fire-40-years-on-4578707/.
8. Id.
9. U.S. Nuclear Reg. Comm’n, Overview of the Alternate Fire Protection Rule [10 CFR 50.48(c)], https://www.nrc.gov/reactors/operating/ops-experience/fire-protection/protection-rule/protection-rule-overview.html.
10. Walker & Wellock, supra note 2, at 56.
11. U.S. Nuclear Reg. Comm’n, Backgrounder on the Three Mile Island Accident, https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/3mile-isle.html.
12. Nuclear Energy Inst., Chernobyl Accident and Its Consequences, https://www.nei.org/Master-Document-Folder/Backgrounders/Fact-Sheets/Chernobyl-Accident-And-Its-Consequences.
13. Id.
14. U.S. Nuclear Reg. Comm’n, Backgrounder on Chernobyl Nuclear Power Plant Accident, https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/chernobyl-bg.html.
15. U.S. Nuclear Reg. Comm’n, NUREG/BR-0298, Rev. 2, Nuclear Power Plant Licensing Process (July 2004).
16. U.S. Nuclear Reg. Comm’n, Backgrounder on Reactor License Renewal, https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/fs-reactor-license-renewal.html.
17. Jonathan Rabinovitz, Government Fine on Nuclear Plant is Largest Ever, N.Y. Times, Dec. 11, 1997.
18. Joseph John Bevelacqua, Health Physics: Radiation-Generating Devices, Characteristics, and Hazards 7.2.10 (2016). While examining the applicability of PRA to its regulatory scheme, the NRC implemented in 1991 the Maintenance Rule, 10 C.F.R. § 50.65, that required licensees to implement strong maintenance programs at their plants.
19. Id.
20. Several weeks after discovery of the Davis-Besse RPV head degradation, the NRC issued Bulletin 2002-01, Reactor Pressure Vessel Head Degradation and Reactor Coolant Pressure Boundary Integrity. The Bulletin required pressurized-water reactor (PWR) licensees to submit to the NRC information related to the integrity of the reactor coolant pressure boundary, including the extent to which the licensee has inspected the RPV head and the basis for concluding that plants satisfy applicable regulatory requirements related to the structural integrity of the reactor coolant pressure boundary and how future inspections will ensure continued compliance with those requirements. In February 2003, the NRC issued Order EA-03-009, which established interim inspection requirements for PWR RPV heads, to PWR licensees. In July 2003, the NRC issued Regulatory Issue Summary (RIS) 2003-13, NRC Review of Responses to Bulletin 2002-01, “Reactor Pressure Vessel Head Degradation and Reactor Coolant Pressure Boundary Integrity.” The RIS informed PWR licensees of the results of NRC staff’s review of the responses to Bulletin 2002-01 and provided information on additional regulatory actions the NRC was considering based on its review of the bulletin responses and the cracks found in the lower RPV head at South Texas Unit 1.
21. U.S. Nuclear Reg. Comm’n, Davis-Besse Lessons Learned Task Force, https://www.nrc.gov/reactors/operating/ops-experience/vessel-head-degradation/lessons-learned.html.
22. World Nuclear Ass’n, U.S. Nuclear Power Policy, http://www.world-nuclear.org/information-library/country-profiles/countries-t-z/usa-nuclear-power-policy.aspx.
23. U.S. Nuclear Reg. Comm’n, Backgrounder on NRC Response to Lessons Learned from Fukushima, https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/japan-events.html.
24. Id.
25. U.S. Nuclear Reg. Comm’n, The Near-Term Task Force Review of Insights from the Fukushima Dai-ichi Accident (July 2011), ADAMS Accession No. ML111861807.
26. Nuclear Energy Inst., NEI 12-06, Diverse and Flexible Coping Strategies (FLEX) Implementation Guide at 1 (Aug. 2012).
27. Mitigation of Beyond-Basis-Design Events, 80 Fed. Reg. 70610 (Nov. 13, 2015).
28. Letter from Dr. John E. Kelly, Deputy Asst. Sec’y for Nuclear Reactor Technologies, U.S. DOE, to Glenn M. Tracy, Director, Office of New Reactors, U.S. NRC, Joint Initiative Regarding U.S. Nuclear Regulatory Commission Licensing Strategy for Advanced (Non-Light Water) Reactor Technologies (Dec. 8, 2014), ADAMS Accession No. ML14353A245.
29. Scot Greenlee, Exelon Generation Company, LLC, presentation at 2017 U.S. NRC Regulatory Information Conference, Advanced Technology Fuel—Industry Perspective (Mar. 2017), http://ric.nrc-gateway.gov/docs/abstracts/greenlees-W9.hv-r1.pdf.
30. Id.
31. Nuclear Energy Inst., Second License Renewal Roadmap at 3 (Mar. 2015), https://www.nei.org/CorporateSite/media/filefolder/Federal-State-Local-Policy/Regulatory-Information/Second-License-Renewal-Roadmap-small.pdf?ext=.pdf.
32. S&P Global, US NRC expects application to extend nuclear licenses beyond 60 years (Feb. 26, 2014), https://www.platts.com/latest-news/electric-power/washington/us-nrc-expects-application-to-extend-nuclear-21273628.
33. Nuclear Closures Magnify U.S. Climate Challenge for Trump, E&E News, https://www.eenews.net/stories/1060045903.
34. What Does Westinghouse Bankruptcy Mean To Nuclear Energy Innovators?, Forbes, https://www.forbes.com/sites/rodadams/2017/03/31/what-does-westinghouse-bankruptcy-mean-to-nuclear-energy-innovators/#1536b19e1536.