An Industry Still in Disarray

By John S. DeMott

Four years after the big scare, nuclear power remains troubled

From the very beginning, the U.S. nuclear-power industry has suffered one setback after another. Electricity was produced from the atom for the first time in December 1951 at Experimental Breeder Reactor 1, a station near Arco, Idaho. Typically even for then, the switch was thrown several months behind schedule. Nonetheless the dream of the day was that nuclear-generated electricity was not far off and that when it arrived, it would be "too cheap to meter."

Last week, nearly a third of a century after that first surge of power and four years after the notorious incident at Pennsylvania's Three Mile Island generating station, the business of nuclear power in America was still in disarray, and it has turned out to be anything but cheap. The industry is plagued by searing cost overruns, unfinished plants, waste-disposal problems and environmental suits, shoddy workmanship, tricky technology, constantly changing safety regulations, disillusioned shareholders, weak political support and public mistrust.

Three Mile Island brought the nuclear industry, barely progressing before the incident, to a near standstill. There have been no new domestic orders for nuclear generating plants since 1978. After Three Mile Island, moreover, cancellations came in a flood tide. Work on 18 reactors was halted last year alone, bringing total cancellations since 1972 to 97. Half of those occurred after the Pennsylvania accident. Says Eric Van Loon, executive director of the Union of Concerned Scientists, a group critical of the nuclear-power industry: "Three Mile Island showed that a $2 billion investment could disintegrate in 30 seconds."

Still, 83 nuclear plants are licensed to operate, although not all of them were actually producing electricity last week because of assorted glitches. Fifty-nine more are in the works, 27 of which may open this year or next. By the end of 1983, nuclear energy will surpass water power and natural gas and move into second place, behind coal, as a generator of electricity in the U.S. Last year nuclear generators produced 12.5% of the nation's electricity. But that is far below the 25% that had been predicted by nuclear proponents in the 1950s and '60s. By the year 2000, some of those prophets were saying then, half the nation's electric power would come from nuclear reactors. Now the guesses for the end of the century range between 20% and 25%. Unglamorous coal-fired generators are still the chief source of power, producing a little more than half of America's electricity.

The big makers of nuclear paraphernalia--Westinghouse, Combustion Engineering, General Electric and Babcock & Wilcox--have scaled back their nuclear-equipment sales, but are doing a brisk business supplying fuel and repairing and retrofitting existing reactors. Much of the work involves upgrading the reactors to new federal safety standards passed after Three Mile Island, and simply replacing parts of older, worn-out reactors. Westinghouse, in fact, was sued by two California utilities last week over steam-generator breakdowns that have caused a 14-month shutdown of a 15-year-old nuclear plant near San Clemente.

The utilities industry has been bedeviled relentlessly by escalating costs. Because of environmental suits, high interest rates and construction delays, the cost of power from nuclear reactors went up so rapidly in recent years that, according to opponents of the new technology, by 1976 it was possible to produce cheaper energy from a new coal plant than from a new nuclear plant. Industry defenders contend, however, that power from nuclear plants is still less expensive overall: 2.7-c- per kwh, vs. 3.2-c- from coal-fired plants and 6.9-c- from oil. Detractors argue that the statistics give unfair weight to ultracheap power from old nuclear plants. For its part, the Department of Energy puts coal and nuclear neck and neck in price.

Stories of incredible cost overruns on nuclear plants abound. Long Island's Shoreham nuclear-power facility, about 55 miles from Manhattan, is 99% completed, but it is also six years behind schedule and, at $3.2 billion, ten times as costly as planned. It may be at least a year before power begins flowing. When it does, it could be the most expensive commercial electricity ever produced. Long Island Lighting Co. rates, already 60% higher than the U.S. average, could go up by about 40%, to 15-c- per kwh. But according to the plant's officials, without Shoreham rates would go up twice as much because Lilco would have to pay to scrap the nuclear operation and build an alternative plant.

In the West, not one of California's six nuclear-power reactors is functioning; they are victims of safety problems and faulty designs. Even more troubled is the Washington Public Power Supply System (WPPSS), aptly known as "Whoops." The utility owes $8.3 billion for five plants in various stages of construction, two of which it has decided not to complete. In ten years, the project's cost has ballooned to $23.8 billion from original projections of $4.1 billion. Long rich in hydroelectric power, the region has a surplus and may not need the atomic juice anyway.

Indeed, slowing demand for electricity all over the country has become the biggest deterrent to nuclear power, even more so than burdensome regulation and community fears about safety. Buoyant assumptions about industrial growth, in vogue when most nuclear plants were conceived, have not held up. Smokestack industries--autos, steel, chemicals--that were expected to consume more and more electricity from the atom are waning in importance in the American economy as imports grab bigger shares of U.S. markets. Demand for electricity by what was supposed to be an ever more affluent, wasteful society has fallen off sharply. U.S. consumption of electricity declined 2% or so last year after rising at an average rate of 5% during the 1970s. Consumption fell 4% during the first quarter of 1983, even as the economy was reviving.

Electricity use in Michigan, for example, has dropped during the past three years as the auto industry has fallen on hard times. Critics now question the necessity of two reactors being built in Midland by Consumers Power and Detroit Edison's Fermi 2 plant nearing completion in Monroe County. Fermi 1, the first plant to sprout from Company Chairman Walker Cisler's vision, was problem plagued from its conception in the 1950s. It was shut down in 1972 after running only 300 days in six years.

Supporters of the nuclear industry assert that the worst adjustments to rising costs and new regulations could be over. The 59 reactors under construction or awaiting licensing will turn out to be the "hardened survivors," says Carl Walske, president of the Atomic Industrial Forum, a trade group for nuclear energy. Those plants could pump out an extra 65,000 megawatts of power.

Not all the new nuclear plants are in jeopardy. Forty-four percent of the power provided by Chicago's Commonwealth Edison comes from smoothly running nuclear reactors. Some plants abuilding are close to schedule, in Berwick, Pa., and St. Lucie County in Florida. In Port Gibson, Miss., the Grand Gulf nuclear plant, owned by Mississippi Power and Light, will come on stream this year. Cost: $2.8 billion, with Bechtel as contractor. Construction has pumped $28 million into the economy of Claiborne County, which has been hurt by unemployment.

The U.S. is not expected to order any new plants much before the 1990s, in contrast to England, France, West Germany, the Soviet Union and Japan, which are rapidly increasing their nuclear-generating capacity. In part, this is because planned and existing U.S. facilities should more than meet energy needs into the next decade. But after that, a shortage could develop. By then, some experts believe, electric power will supply as much as half of total U.S. energy, vs. about a third now, as more electricity is used to replace combustion in transportation and heating. Given the likelihood of rising costs of other sources of electricity (including a rebound in the price of oil), nuclear power may yet play an ever larger role. Behind schedule and over budget, of course.

-- By John S. DeMott. Reported by Christopher Redman/Washington and Bruce van Voorst/New York

With reporting by Christopher Redman/Washington, Bruce van Voorst/New York This file is automatically generated by a robot program, so viewer discretion is required.