The Magazine

Nuclear Proliferation

An industry rises from the dead.

Jun 5, 2006, Vol. 11, No. 36 • By WILLIAM TUCKER
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"NUCLEAR POWER PLANT TOWER IMPLODED," blared a headline on last week, sounding overtones of another Three Mile Island. In fact, the cooling tower on the Trojan reactor north of Portland, Ore., abandoned 13 years ago, was being brought down by a demolition crew. Oh well, false alarm. As the press was out hunting the next nuclear accident, however, the real news was coming out of San Francisco, where the nuclear energy industry was celebrating its looming revival.

"We expect proposals for as many as 20 new reactors from 12 companies may be before the Nuclear Regulatory Commission within the next two years," said Frank "Skip" Bowman, president of the Nuclear Energy Institute, opening the group's annual conference. "These will be the first efforts at new construction since 1974."

Although it may be a decade before these plants come online, the buzz is that a new day is here. "Once we get the first plants through the regulatory process, the dam will break," said Tony Earley, CEO of DTE Energy in Detroit. "There's going to be a flood of new applications."

Nuclear's remarkable comeback has flown beneath the radar of the major media. Eight years ago, the industry was given up for dead. Operating costs were skyrocketing, unplanned outages plagued the industry, and capacity (the percentage of time a plant is up and running) hovered around 65 percent. Under utility deregulation, nuclear plants had become "stranded investments"--huge white elephants that would make it difficult if not impossible for their owners to compete in an unregulated market. The Department of Energy's Energy Information Administration predicted nuclear's share of electrical generation would decline from 18 percent to 7 percent by 2020. In 1998, the Department of Energy started phasing out nuclear research for the first time since World War II.

"I went into nuclear waste engineering because I heard they were going to be closing down plants, and I figured there would be jobs in decommissioning," says Lisa Shell, who graduated from MIT with a master's in 1997. Today Shell heads North American Young Generation in Nuclear, a thriving organization of young professionals who "believe the industry is alive and kicking." Opportunity is rife, since half the aging workforce will be retiring in the next decade. "We're thrilled there's going to be new construction," she says.

If there was a single turning point, it probably came in 1991, when Don Hintz, CEO of Entergy Nuclear in New Orleans, dispatched his vice president, Jerry Yelverton, to Russellville, Ark., to take charge of Arkansas Units 1 and 2. These had just been designated the second-and tenth-worst-run reactors in the country by Ralph Nader's "Nuclear Lemons" award. "My assignment was either to shut the plants down or sell them," says Yelverton. Instead, he became obsessed with the idea of making nuclear reactors fulfill their promise.

"Most of the utility industry was treating nuclear as an extension of the fossil fuel industry," says Yelverton. "With coal, you run the plant until something breaks down, then you shut it down and fix it. You have to give the boiler a rest anyway, so it doesn't matter. That philosophy had carried over to nuclear. In the Navy, however, they run reactors for more than a year without shutting down. I decided to bring that kind of discipline to the commercial industry."

Concentrating on upgrading equipment, Yelverton soon had the capacity factor at the Arkansas plants rising toward 90 percent, an unheard-of figure. "We found most of the problems had very little to do with the nuclear side," says Gary Taylor, who replaced Yelverton as CEO of Entergy Nuclear in 2003. "It was things on the electric side--turbines and transmission--that were always breaking down. With coal it didn't matter that much. Now we realized nuclear could be held to a much higher standard."

Aware of Yelverton's success, Oliver Kingsley, a former Navy commander, took over nuclear operations at Chicago's Commonwealth Edison in 1997. He found six of the company's twelve reactors shut down while the others were producing at 47 percent. "I told people, if you want to play for Coach Kingsley, you'll have to measure up to new standards," says Kingsley. Within four years, he had all 12 reactors operating at close to 90 percent. In 2000, Commonwealth Edison spun out Exelon, which now owns 17 reactors, the nation's largest fleet.