Nuclear Power Sees Itself in New Light

Ever since a reactor at Three Mile Island had a partial meltdown some 20 years ago, the nuclear-power industry has endured abuse from comedians and critics who claim it is one of the deadliest safety hazards facing the United States.

But today, this much-maligned industry is filled with a new optimism.

Buoyed by two recent developments, the nuclear-power industry - which has not had a new plant ordered since that 1979 mishap - sees better prospects ahead. Indeed, many existing nuclear plants are much in demand in the newly competitive electricity business, and at least one expert says he expects to see a new order for a nuclear plant within five years. The developments that have heartened industry officials:

* A ruling by the US Court of Federal Claims Oct. 30 could pressure the government to create a central disposal site for spent fuel rods and other highly radioactive nuclear waste.

* The tightening of domestic clean-air regulations, and the greenhouse gas reduction pact that the US endorsed at the environmental conference in Kyoto, Japan, last year are making nuclear power more appealing. Nuclear-power plants, unlike gas- or coal-fired plants, do not emit sulphur dioxide or other air pollutants.

Skeptics of a nuclear-power resurgence abound, saying the cost of building nuclear plants is prohibitively high. But some in the industry remain positive.

The outlook is "extremely good," says Marvin Fertel, a top official at the Nuclear Energy Institute, an industry-sponsored group in Washington that promotes the nuclear business.

Mr. Fertel says he hopes the recent court decision will prompt the government to build a waste-storage facility, clearing the way for more nuclear power plants. The ruling holds that the US Department of Energy (DOE) has violated a legal commitment to remove used radioactive fuel from commercial nuclear plant sites. "It is very difficult to see a new plant being built in this country without a place for its waste," Mr. Fertel says.

The DOE was supposed to open a storage facility by last January, and has collected $14 billion from commercial nuclear plants since 1982 to fund the search for and construction of a site. But when the deadline passed, with no such facility in place, nuclear-power companies filed their lawsuits.

The industry estimates it could win $50 billion to $60 billion in damages resulting from the government's failure to provide waste storage. And 13 other legal cases are under way in courts. "It could be the next savings and loan debacle," says Michael McCarthy of the Minnesota Department of Public Service. He says 96 utility commissioners from 32 states have asked the DOE to stop the fees, which cost consumers $600 million a year.

Meanwhile, the tightening of air-quality standards worldwide may be beneficial for nuclear power as well, some industry officials say.

"The issues associated with global warming will make our existing nuclear plants more attractive and encourage the development of new nuclear plants," says Michael Tuckman, executive vice president for nuclear generation with Duke Energy Corp. in Charlotte, N.C.

In fact, Duke is one of the first two utilities in the US to ask the federal Nuclear Regulatory Commission to extend one of its 40-year licenses. There are 105 nuclear plants still operating in the US. These churn out some 20 percent of the nation's electricity. Half are due to retire by 2015 as licenses expire.

But even if nuclear-power companies can turn their fortunes around, no one expects any orders in the immediate future. One reason: electricity deregulation. Officials say it will take a few years for the utilities to sort out the rules in the newly competitive game. And in the meantime, electricity companies are avoiding pricey projects, including nuclear power.

Yet some companies see existing nuclear power plants as great business opportunities. Philadelphia-based Peco Energy Co., in a partnership with British Energy Co., last month bought the undamaged twin of the two nuclear reactors at the Three Mile Island site in central Pennsylvania.

It got a bargain. It put up $23 million for a facility that its owner valued on its books at $600 million, plus $77 million for fuel for the reactor. The partnership is negotiating with other utilities for nuclear plants. And there is also competition for old nuclear plants from New Orleans-based Entergy Corp. and other companies.