The Ohio Public Utilities Commission (PUC) has proposed regulations to allow electric utilities to use fuel-cost clauses to recover gains or losses from trading Clean Air Act emission allowances....
Numbers That Make Sense: Gauging Nuclear Cost Performance
Dwindling economic competitiveness has plagued the nuclear power industry for
some years. In the industry's early years, some reactors were completed for less than $100 million. Experience gained overseas (often in projects with American partners) provides sobering evidence that nuclear reactors can still be built at low cost in short periods of time. But not here in the United States, where rising construction and O&M costs have become industry bywords.
What lies behind this decline?
For the last 20 years, the U.S. nuclear industry has devoted the bulk of its energies largely to regulatory issues. We have not developed the types of economic analyses that would be taken for granted in the oil, securities, or automobile industries. True, certain notable power-plant improvements in recent years have trimmed fuel costs and boosted plant output. And other moves are now underway to reduce operating and maintenance (O&M) costs. But to prioritize and optimize these cost reductions, we need a better understanding of what has happened to costs in the U.S. nuclear industry.
In this article we present some cost findings drawn largely from publicly available data for 109 U.S. nuclear power reactors. The data sources include such agencies as the Nuclear Regulatory Commission, Energy Information Agency, Federal Energy Regulatory Commission (FERC), Utility Data Institute, Electric Utility Cost Group, and Institute for Nuclear Power Operations. The study applies multivariate, nonlinear regression analysis to O&M costs from 1975 to the present, and construction costs from 1966 through 1989.
Perhaps the most interesting finding concerns plant size. Rather than a single universe, with various cost trends showing positive or negative correlations to plant size, we found three separate universes that exhibit entirely different cost behaviors, each with its own "best" and "worst" of class.
Our study analyzes all of the U.S. nuclear power plants, ranging from the single-unit Ginna (New York) plant of 470 Mw(e) to the Palo Verde (Arizona) plant of 3 reactors of 1,270 Mw(e) each ("e" denotes electrical energy output, as opposed to thermal output). All of these findings are derived from analyzing the complete industry data itself, avoiding the historical sampling problems of analyzing subsets of the reactor data.
Instead, using data from every plant in the industry, our study isolates and precisely quantifies the factors that drive nuclear power plant operating costs and performance. It examines 29 different operating criteria in both costs and performance, including O&M, fuel, capital additions, capacity factors, thermal efficiencies, outage durations, labor requirements by major functional area, wages rates, and productivity. The study also analyzes safety-related criteria, such as SALP (systematic assessment of licensee performance) ratings and safety system failures.
Caveat: We do not claim any direct hands-on experience in operating nuclear power plants. Nevertheless, we see this lack as a distinct, dispassionate advantage. What the study has found are the true cost relationships derived from the actual operating data of all U.S. plants; these are not theoretical exercises, nor do they involve data sampling, so often abused in earlier studies. Moreover, the relationships are not complicated and, in fact, make intuitive sense.
Six key variables determine