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Numbers That Make Sense: Gauging Nuclear Cost Performance

Fortnightly Magazine - June 15 1996

the next higher size range. This phenomenon is associated with every single one of the 29 performance criteria studied, with the exception of utility wage rates.

The capacity factor analysis shows that as plant size increases within each group, capacity factors fall proportionately. In other words, increasing plant capacity within any of the three groups will significantly increase the absolute cost of operations without increasing electrical output. Thus "stretching" plants within each group has proved very uneconomical (see sidebar).

5. Findings Related

to Vintage

Vintage, as measured by OL date, also shows somewhat unexpected behavior. Intuitively, one would assume that age would render a plant less efficient and more costly to operate (em like the family car. This is not the case.

s The most efficient plants came on line prior to 1974 and after 1982. Those plants that received OLs from the time the NRC was formed to a few years after TMI are appreciably more expensive to operate today than other plants.

s Difference in vintage accounts for as much as 20 percent in administrative costs, 75 percent in engineering costs, and more than 100 percent in safety system failures and capital additions (year in and year out).

The reasons behind these large percentage differences are not known. The heavy hand of regulation is a suspect, both during construction and in current operating requirements. Can this be mitigated over the remaining life of these plants? The industry would do well to study this area to seek generic solutions and possible regulatory relief.

6. Findings Related

to Region

Once the effects of the other variables such as size, type, and vintage have been accounted for, strong and consistent regional patterns become obvious.

s Regional differences vary by as much as 50 percent for total labor requirements, 80 percent for O&M costs, and 250 percent for capital additions, year in and year out.

Whether these patterns reflect natural characteristics such as climate, demographics such as urbanization, or different regional regulatory interpretations cannot yet be determined. The differences are both real and large. They are not due to wage rate differences, which are impressively consistent across the industry.

Plants in areas with high spending patterns could learn a great deal from plants located in the most efficient regions. Such knowledge would allow the development of realistic and achievable staffing standards for any plant, based on U.S. experience. However, U.S. plants would still need further improvements before they could compete successfully against foreign reactor programs.

* * *

Until recently, utilities did not possess a quantifiable basis on which to estimate operating costs or what energy output to expect. Our new findings cast an entirely new light on the U.S. nuclear industry. Nevertheless, these findings only show us "what" is happening to the industry in terms of cost behaviors. They do not explain "why."

The U.S. nuclear industry has survived an amazing gauntlet of problems unparalleled in the global experience within nuclear energy. We need to place into context some of the problems faced by the industry in relation to the findings from its