[BETA] Fortnightly

Last year was pivotal for nuclear power. On May 13, 1994, the board of directors of the Washington Public Power Supply System (WPPSS) voted 9-4 to terminate reactors WNP-1 and WNP-3, triggering a dismantling of the two mothballed reactors, both about 70 percent complete. For ratepayers in the Pacific Northwest, the decision offered no relief from bills for construction of the two plants (em recently estimated at about $350 million per year for the next 24 years1. In many ways, WPPSS and its troubled history is a microcosm of the U.S. nuclear industry, now largely brought to a halt.Meanwhile, other nations continue to build nuclear reactors, such as France, Japan, Korea, and China. Still others are planning to start nuclear programs, including Indonesia, Thailand, and Turkey. This contrast between domestic and foreign nuclear experience remains largely hidden from view in America.

So what went wrong?

Common journalistic lore tells us that the WPPSS default was a case of bad management (em of farmers acting as nuclear construction contractors, of reactors built when they weren't needed. In fact, there were management problems; past managing director Bob Ferguson has said so. The public has also been told there were labor problems. And yes, labor leaders concede that too. But what the public has not been told is the tremendous impact of regulatory agencies upon the domestic nuclear industry.

A recent study indicates that 60 to 80 percent of the nuclear cost overruns in the United States are attributable to regulations,2 not to management or labor. That large power plants were built in the United States in the early 70's for $150 million suggests the magnitude of the subsequent regulatory costs as well. A quick look reveals that the problems encountered at WPPSS mirrored those from around the country. They fall within five broad categories:

s Rules. Exploding regulations boosted construction and operating costs by 500 percent and more.

s Backfitting. With continual changes in regulations, low bidders on construction contracts could expect to make millions from change orders.

s Stubbornness. Reluctant to share and learn from each other, utilities forfeited their collective knowledge.

s Secrecy. Media relations failed to communicate effectively with the public.

s Bad Press. An unholy alliance between critics and journalists soured public opinion.

Only recently have utilities opened up to discuss nuclear power. Ken Harrison, president and chief executive officer of Portland General Electric, owner of the recently terminated Trojan

reactor, acknowledged that poor communication played a big part in forcing the plant's closure. He stated:

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"People were not prepared. We didn't lay the groundwork to help them, help allay the skepticism, the uncertainty, the uneasiness . . . . We know we have all the technical expertise. We know how to build these things. We know what's most economic. Just let us do it and stay out of our hair."3Historically, the public has been frightened of the technology. A few more regulations, good or bad, promoted under the concept of greater safety, would appear reasonable to most persons. But the direct relationship between regulation and energy costs still