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All Nuclear Power Plants Are Not Created Equal

Fortnightly Magazine - April 1 1998

three vintage groups. The first group contains plants licensed by the Atomic Energy Commission before the formation of the Nuclear Regulatory Commission in 1974. The second group includes plants whose construction was disrupted by the ever-changing regulatory requirements imposed after passage of the NEPA, and following the Browns Ferry fire and the TMI event. The last group includes those plants that came on line during the progressively more stable regulatory environment that prevailed after 1982.

Like plant size, 95 percent of all U.S. plants fall into one of the three intervals shown in the figure. The 15-30 percent cost increase for plants that came on line between 1975 and 1982 is due primarily to higher maintenance costs and capital additions. Since plants of newer vintage exhibit cost characteristics more closely akin to the older group, the relationship between cost and vintage can be seen as remaining relatively constant. The cost variation must be due far more to issues associated with the time when a plant was built than to the plant's chronological age.

As one would expect, dual-unit plants (plants with two reactors placed in close proximity) appear consistently more economic than single-unit plants. However, since the late 1980s, there has been a steady deterioration in the economics of dual-unit plants: They were once 30 percent cheaper per unit than singles, now they appear to be only 15 percent cheaper. Also, plants with pressurized water reactors (PWRs) are consistently more economic than those with boiling water reactors (BWRs). This advantage currently ranges from operations costs that are 15 percent lower, to requirements for annual capital some 30-percent lower than for singe-unit plants.

Finally, some small savings are evident at those utilities that operate more than one plant.

Geography and Staffing Levels

Today, the annual cost of operating a nuclear plant in the United States (excluding fuel and amortization) ranges between $50 million and $250 million. While the four physical plant characteristics already discussed explain 80 percent of this variation, another major factor exists: the region in which the plant is located. Understanding this influence offers potential for significantly improving the overall economics of U.S. plants. For instance, staffing levels in the most efficient parts of the country should act as benchmarks for the rest.

Figure 6 shows the residual impact on plant costs once the effects of plant size, age and number and type of reactors have been removed. The most expensive plants are located in the Southwest and Northeast, which is not surprising since, overall, costs are higher in these areas. What is interesting is the degree to which they vary.

For example, operating a plant in California costs almost twice as much as an identical plant would cost in the Carolinas. This result is not due to differences in wage rates. Analyses show that utility wage rates vary by less than 15 percent across the country. Thus, an identical plant in California requires approximately 50 percent more people to operate it than in the Carolinas. Presumably both plants are equally safe, so why are the additional people needed?

How much