The Federal Energy Regulatory Commission appointed Bud Earley policy advisor on electric matters. Earley most recently served as director of the electric policy division of the FERC's Office of...
All Nuclear Power Plants Are Not Created Equal
could be. If this premise is correct, O&M costs hold the promise for significant savings.
About 80 percent of O&M costs are labor-related; any reduction implies a drop in staffing levels. In fact, Figure 3 shows that staffing reductions have already begun. O&M plant labor (contractors plus utility employees) has fallen 10 percent over the past five years. The number of utility employees rose 20 percent over the same period, suggesting that utilities are replacing private contractors with payroll employees.
Nevertheless, this approach cannot continue indefinitely. For 20 years, contractors represented nearly 50 percent of the nuclear labor force. In the last five years, however, this ratio has dropped to 25 percent. Further reductions are possible but will be limited because some cyclical jobs, such as major maintenance and refueling outages, do not justify hiring permanent staff.
Utilities seeking to trim labor costs face the difficult task of cutting back their own employees. The big question is: What specific labor categories can be reduced without jeopardizing safety and efficiency? Too many engineers is inefficient; too few heightens the risk of downtime from mechanical or regulatory problems.
Plant Variations: Crucial to Analysis
The number of people required to operate a plant depends on the type of plant in question. The old custom of using raw industry averages, or even "peer group" averages, to ascertain correct staffing levels can lead to severe economic or regulatory problems. Furthermore, the current vogue of trying to emulate the practices of the economically most-efficient plants could put some plants in jeopardy. Trying to get a Geo Metro to travel as fast as a Corvette makes no sense; neither does expecting a Corvette to get the gas mileage of a Metro. This example may be extreme, but it does expose a flaw inherent in nuclear plant benchmarking.
What staffing levels are appropriate for which plants? Our most important finding indicates that the optimal number of employees is related to a plant's size and age and vintage and number and type of reactors. Furthermore, these relationships, which can be predicted to within plus or minus 5 percent, vary significantly among labor categories. Cost and staffing levels achieved by the most economic plants will not work for a plant with unfavorable characteristics; doing so will almost certainly lead to severe long-term problems. Even a plant with the best characteristics may not be able to achieve the economies of a plant near the top of the industry.
For many years, the industry assumed that because every plant in the U.S. was different, they could not be compared with one another. In recent years this bias has reversed. Now, the implicit assumption is that good management practices can somehow overcome all differences. The truth lies between these extremes. Certainly, management can significantly influence plant economics, but some plants have far greater potential for improvement than others. Which plants? What benchmarks should be used?
Unlike in France, no two U.S. plants are of identical size and vintage and have the same number and type of reactors. However, the wide variation in physical characteristics of