Aucbvax.1400 fa.energy utzoo!duke!decvax!ucbvax!OAF@MIT-MC Sat May 23 13:32:29 1981 energy digest Clipping service - Nuclear Industry series part 4. Environmentalists & anti-technology types ---------------------------------------------------------------------- Date: 19 May 1981 20:40 edt From: Schauble.Multics at MIT-Multics Subject: Clipping Service - Nuclear Industry Series, part 4 To: energy at MIT-AI This is the fourth in a many part transcription of a Phoenix Gazette series on Three Mile Island and the nuclear industry. All material is by Andrew Zipser, Gazette reporter. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Palo Verde Struggling with criticism, cost, and consumption Nuclear scientists and engineers have always had difficulty explaining to the public in simple terms their complex subjects. The critics' cry that nuclear power is "unsafe, uneconomic, unreliable, and unnecessary" is forceful rhetoric that proponents can only respond to with hour-long discourses. It is unfortunately true that effectively "answering the critics is like having first rebuttal to the cry of fire in a crowded theatre." -- from , a publication of the American Nuclear Industry. The size of it is overwhelming. This is the first impression. Of massive concrete structures, megaliths thrust into the desert floor. Of sky cranes like giant praying mantises. Of acre upon acre of equipment and supplies, such as reinforcing bars as thick as a man's wrist. Five years in the building, the Palo Verde Nuclear Generating Station is destined -- for however brief a time -- to be the nation's largest. Sitting in the desert 50 miles west of Phoenix, each of the three reactors will have a generating capacity of 1,270 megawatts, half again as much as the output of the biggest coal-fired generators at Four Corners Numbers that dwarf the imagination abound. Excavation and grading of the site require moving 6.6 million cubic yards of dirt; the concrete to be poured amounts to two-thirds of a million cubic feet. More than one million feet of pipe will be needed, and almost 15 million feet of electrical cable. Each of the containment buildings -- the domed structures that house the reactors -- is 244 feet high and 154 feet in diameter. The concrete slabs on which they sit are 11 feet thick. The scale of things is so immense that the men who work here are dwarfed by their creation. Standing on the scaffolding that embraces one of the containment buildings, they look like insects ensnarled in a giant spider's web. Against the harsh sterility of the cement and steel, they are as out of place as bacteria in an operating room. What did the Egyptians feel like when they contemplated their first pyramid? Did they marvel at the number of blocks of stone? At the height and bredth of their creation? At the very enormity of their vision? Or did they seek to humanize their work, as the men here have done with the graffiti that adorns virtually every temporary plywood and plastic screen? Is there, buried in the recesses of a vast Middle East tomb, a slogan comparable to the one that reads "Free Electrons"? ---------- The Palo Verde vision was born a decade ago, when the state's three largest electric utilities -- Arizona Public Service, Salt River Project, and Tucson Gas and Electric -- took the first steps to plant the peaceful atom in the Sonoran desert. The years that followed were far from uneventful. Numerous wildcat strikes disrupted the construction schedule, pushing completion of the first unit from an inititial forecast of 1981 to May of 1983. A power struggle within the International Brotherhood of Electrical Workers ended in a shooting. State and federal officials probed allegations that 20 percent of the work force was made up of illegal aliens, hired by union officials who received kick-backs in return. The consortium's makeup fluctuated. Even before construction had started the Tucson utility announced it was reconsidering its participation. By 1975 it had decided to sell its 16 percent share to Southern California Edison Co., claiming the project was too expensive and its electric load not growing fast enough to justify the expense. SRP, initially an equal partner with APS (each had a 29 percent share), eventually decided to transfer a fifth of its ownership to a Los Angeles utility; in May it will decide whether to sell even more. Perhaps the greatest reversal occurred in 1979, two years after APS had announced it would build yet another two units, this time in partnership with several California utilities. Blame for the cancellation was placed on the California regulatory agencies, which APS president Keith Turley said had made it "impossible" for the California participants to continue. The California regulatory agencies, for their part, said the APS statement was "an excuse to extricate itself" from a bad decision and was an attempt "to blame us for what appears to be an uneconomic project." Southern California Edison Co. further hinted that APS may have acted too hastily, claiming it could have gotten the regulatory approval it needed. And protests against the project were frequent, if less dramatic than those held elsewhere. A candlelight vigil greeted the first reactor vessel as it crossed the Mexican border at Rocky Point. Demonstrations were staged at the site itself, resulting in the arrest of up to 71 people at a time. Nuclear opponents have protested bitterly against surveillance by both APS and by the Maricopa County Sherrif's Department. Last year someone stole a tractor from a construction site, then rammed it into and toppled a transmission tower, causing damage estimated at $150,000. The war was fought at the ballot box, too. An anti-nuke group called Arizonans for Safe Energy managed to get an initiative on the 1976 ballot that would have imposed a set of stringent requirements before Palo Verde could be allowed to operate. Even proponents of the measure admitted its success would effectively end the project. Turley, observing that Palo Verde was designed to supply 26 percent of the state's needs, added, "If we don't have nuclear we can meet only 74 percent of the needs of the people. The question is, who's the 26 percent who's going to sit in the dark?" That argument -- and an estimated $700,000 spent by the utilities to fight the measure -- was convincing enough. Arizona's voters rejected the initiative by a 3 to 1 margin, then did the same to a modified version of the same measure four years later. And then there was Three Mile Island. Within days of the incident, as much of the nation suffered a case of nuclear jitters, Turley appointed a special task force to find out what the probability of a similar accident disabling Palo Verde. Six months later the task force had a preliminary report ready: while the plant had several potential safety problems, it said, there were several significant design differences that made a TMI type of accident unlikely, if not impossible. And when it finished its work last summer, the task force reported that remedial action was being taken to correct the problems it had found and that Palo Verde "can be operated safely and reliably if the project is completed as planned." Nevertheless, it added, "the tasks that must be accomplished within the next 2.5 years are numerous and complex and will require the constant, dedicated attention of executive management." ---------- Throughout its turbulent history the Palo Verde plant has had to be defended against other, more abstruse attacks. If protests and initiatives can be countered with police action and publicity campaigns, questions about load projections and economics are far more slippery to counter and much more open to argument. The question of how much it will cost to build Palo Verde and how economical it will be to operate has been a particularly troubling one. Back in 1978, just before inflation had become a serious concern, APS had pegged construction costs at $2.8 billion. Today, suffering not only from inflation but from the crippling effects of work stoppages and delayed construction, that figure has jumped to $3.62 billion. What it will be three years from now, when the second unit is scheduled to come on line, remains to be seen. Such uncertainties, however, are not peculiar to the Arizona project. Three years ago the U.S. House committee on Governnment Operations issued a report that concluded that most nuclear utilities were experiencing cost overruns of at least 100 percent. "Nuclear capital costs had been seriously underestimated in the past," it noted, "and the gap between estimated and actual costs is still growing." Nor does the $3.62 billion figure include several factors that some Palo Verde critics insist belong to an accurate assessment, such as interest on loans, taxes, fuel costs, and the cost of decommissioning. Any of these factors, if added to the baseline cost of construction, would result in a significantly higher figure. One way to compare the economics of power plants is to express them in terms of the cost per kilowatt capacity. In the mid '70s, for instance, APS was forecasting a cost per kilowatt of approximately $550 to $700. Today, that estimate is up to $965, and if interest and taxes are added the total jumps to $1,432 per kilowatt of capacity. Other factors also affect the bottom line and are even more prone to miscalculation. There is the question of fuel cost: while nuclear plants are significantly more expensive to build than their coal-fired counterparts, their attraction has been the much lower cost of the fuel equivalent. Yet uranium costs have fluctuated widely in the past decade, from a low of $8/pound to more than $40. A separate yet significant part of the fuel cost is the problem of waste disposal. Present plans call for storing this waste on site, in deep storage pools, until the federal government decides what to do with it. The costs of a permanent solution will become part of the fuel price tag -- yet without a final answer, utilities like APS can only guess at how much it will be. One estimate, made by the Department of Energy in 1978, pegged it at approximately 6 percent of total power costs; the Natural Resources Defense Council responded with an estimate up to seven times greater. Another factor to be figured into cost estimates is the reactor's reliability: an inexpensive plant or cheap fuel will still be money wasted if the plant can only run 10 percent of the time. Energy analysts, when discussing this aspect, use a measuring stick known as a plant's capacity factor. Here, too, there is room for disagreement, with estimates of the nuclear industry's average capacity factor ranging from 55 or 56 percent to a high of 65 percent. Whatever the actual number may be, APS estimates for Palo Verde are considerably higher still. Ed Van Brunt, APS vice president for nuclear projects management, say Palo Verde will operate at a 75 percent capacity factor and concedes, "We are saying we'll be significantly better than the industry average." The difference, Van Brunt says, can be attributed to the lessons learned from experience -- in this case the experience of other utilities that have had reactors for several years. Those lessons have resulted in design changes, primarily in steam generator and turbine design, which APS estimates will result in less downtime for maintenance and repairs. As for the conclusions of some studies questioning capacity factors for large plants, Van Brunt dismisses those as being of dubious validity. "There are people who have done studies who contend that capacity factors drop with time, that they drop with the size of the plant," he acknowledges. "But," he adds, "I don't believe those views are correct." Finally, there is the question of decommissioning. Each of the units at Palo Verde has a 40 year life expectancy. What will happen to them when their job is over? Who will pay for their disposal, and how will that job be financed? The answer to each of these questions is that nobody knows, although it is reasonable to assume that the burden will be picked up by the rate payers -- and should, some have argued, be included in overall cost estimates of the plant. Here, too, the problem is similar to disposing of high-level wastes: since no one has yet decided which of several decommissioning methods to use, estimates of how much the procedure will cost are only educated guesses. Monte Canfield, director of the energy and minerals division of the Government Accounting Office, summed up the problem at a hearing of the House Commission on Government Operations: "You don't know what the costs are until you know what the standards are, and you don't know what the standards are until you develope guidelines. And you don't know what the guidelines are until you know whether or not you are going to have a disposal site; and you don't know where the disposal sites are so you can't figure it out. "And," he added, "certainly the nuclear industry is not going to do it for you." APS's guess, despite such reservations, is that dismantling all three units will cost $57 million in 1979 dollars. An NRC estimate has pegged the cost at $70 million. And the GAO, having admitted there are few guidelines from which to draw conclusions, has nevertheless concluded that dismantling will amount to 10 percent of construction costs. What does it all add up to? APS, and the industry as a whole, maintains that nuclear plants will still produce electricity more cheaply than any of the fossil-fuel alternatives. In 1990 dollars, Van Brunt says, it will cost APS 5.3 cents for every kilowatt hour cranked out by Palo Verde, compared to a cost of approximately 7 cents for every kilowatt hour produced by Cholla-4, a coal fired plant that will come on line this year. The skeptics, noting the above uncertainties and omissions, have remained unconvinced. ---------- The Palo Verde utilities have also had to wrestle with a different set of numbers, and here, too, it's been rough going: how much electricity will Arizonans need, and how best to meet that need? If our nation's currency has been buffeted by inflation, energy demand estimates have been equally subject to sharp dislocations, caused partly by changing migration patterns and partly by changes in energy use. When Palo Verde was still only an idea, for instance, APS was predicting the first unit would have to be on line by 1981. Five years ago, when voters had to decide on an initiative which, in effect, would have ended further construction, APS was warning that the measure's success would cause power brownouts by the summer of 1982. Today the utility acknowledges neither forecast was accurate -- but neither were they scare tactics, according to Mark De Michele, APS vice president of corporate relations. The problem APS and every other utility has faced, De Michele explains, is the long time -- now estimated at 13 to 14 years for nuclear plants and about 10 years for coal-fired ones -- required to bring a new facility from the planning stage to completion. When APS made its first estimates, in 1971 and 1972, the Arab oil embargo and the sharp drop in energy consumption that it caused had not yet occurred. And in 1976, he adds, APS estimated it would need only 10 percent of Palo Verde's Unit 1 -- but that 10 percent might as well have been 100 percent, in terms of completing the unit. Since 1976, De Michele says, an agressive load management program and continued changes in energy use, "both necessitated by the dramatic increase in fuel costs," have pushed back the need for Unit 1 another year. A look at the figures APS has used in the past illustrates just how dramatic those changes have been. When Palo Verde was in the conceptual stage, utility planners were looking at an average increase in demand of almost 9 percent a year; by 1979 APS was projecting a growth rate of 5.7 percent a year of the next decade. Today, De Michele says, that projection has been scaled down still further, to an annual growth of 4.2 percent a year -- or less than half of what was expected a decade ago. Changing demands, when contrasted with generating capacity, have laid the utility open to frequent charges of building too much excess capacity. Completion of Cholla-5, for instance, has been delayed until 1990, although money has already been spend on its construction; Cholla-4, after several delays, will be going on line this year -- but part of its capacity will be sold to other utilities for the next seven or eight years. And two years before Palo Verde's first unit is finished, APS is already planning to sell some of its share of the power. Although so much excess capacity may seem embarrassing, APS officials insist it is not as bad as it seems. Russ Hulse, vice president of resource planning, says excess power is simply sold to other utilities -- with those other utilities therefore paying "for the heavy front end of the depreciation costs of that unit until APS needs the extra capacity. And when that happens, he added, "what we end up with is a 1989 unit at 1981 prices." The alternative, Hulse says, is to build insufficient plant capacity and be caught short in the future -- at inflated construction prices. He believes this is happening in California, where an adverse regulatory climate has resulted in a virtual freeze on new power plant construction. "I think the California people who have blocked construction, they're going to be hit with some hard realities in a few years," he adds. There is another side to this equation, too -- a side that caused a lot of trouble for APS last year, when it approached the Arizona Corporation Commission with a request for a rate increase. A major part of the utility's construction fund is raised through stock sales; stock holders, if they are to invest in APS, must be offered a competitive return. So every time APS issues more stock it has to raise its earnings -- and that means higher rates for its customers. In essence, critics of Palo Verde have charged, today's consumer is also paying for some of tomorrow's generating capacity. That isn't fair, they say, and the argument has received at least a partially sympathetic ear: when APS requested a rate hike of 19.2 percent, the corporation commission's chief hearing officer knocked it down to only 4.9 percent, saying the company's load projections have been "excessive". APS's response was a familiar one to jaded ears. It would have to sell up to half of its interest in Palo Verde, it said, if it didn't get what it requested -- and that would result in additional fuel costs to its customers of $1 billion over the next 10 years. The commission, apparently unimpressed, finally approved an increase of 6.5 percent, boosting APS's annual income by $37.4 million instead of the $112 million it had said it needed. (APS has since been granted an emergency rate hike and a new rate hearing will be held later this year.) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Future items in this series: Background pieces on the history and operation of nuclear power plants. More arguments over nuclear power, with emphasis on safety. ------------------------------ Date: 21 May 1981 0936-PDT From: LEWIS at SRI-AI (Bil Lewis) Subject: Enviromentalists & anti-technology types To: energy at MIT-MC Just what impelled Andy to lump us in with "anti-technology" is beyond me, but I resent it. They are the ones that are afraid of change, and opting for a return to the "good old days" (that never really existed I suspect). The folks I work with, up here in the AI center are some of the ones who are most responsible for that change, and 80% of us consider ourselves enviromentalists. I suppose that one definition of an enviromentalist is a group of people that are keeping their eyes open, to ensure that what turns a dollar today doesn't kill us tommorrow. So what if (and this is an absurd example, but I want an extreme one) we discover that some of the waste products from the shuttle are carcinogenic, and that 10,000 people will contract a cancer after every launch? Would you just dismiss this as being anti-technology and assure us that everything has its cost, and that plus the fact five times that number get killed in cars every year? Excuse the intensity, Andy just struck a tender spot, what with Watt & Koop being Reagan's top men. I suspect that he and I are using vastly different definitions of "enviromentalist." -Bil ------- End of energy digest ******************** ----------------------------------------------------------------- gopher://quux.org/ conversion by John Goerzen of http://communication.ucsd.edu/A-News/ This Usenet Oldnews Archive article may be copied and distributed freely, provided: 1. There is no money collected for the text(s) of the articles. 2. The following notice remains appended to each copy: The Usenet Oldnews Archive: Compilation Copyright (C) 1981, 1996 Bruce Jones, Henry Spencer, David Wiseman.