New Plants on the Horizon?

By Daniel Eisenberg, Eric Roston

Protecting the nation's nuclear power reactors from attack may be a daunting challenge. But within the next decade, terrorists could have even more such targets in their sights. If the suddenly resurgent industry can convince wary investors that times have changed, the first new generation of nuclear plants launched in almost three decades could be running within 10 years.

More than a quarter-century after the Three Mile Island accident seemed to have sealed its fate, nuclear power has "a head of steam now that it hasn't had before," says Andrew White, head of General Electric's nuclear-energy business. Concerns about global warming and demand for electricity are growing, and prices for fossil fuels like natural gas are steadily rising. Even environmentalists like Whole Earth Catalog founder Stewart Brand, Greenpeace co-founder Patrick Moore and scientist James Lovelock have endorsed the once taboo energy source as a credible, clean alternative to coal- and natural-gas-powered plants. While most Americans still don't want a nuke plant in their backyard, some economically depressed areas, like Port Gibson, Miss., and Oswego, N.Y., are actively lobbying to be the home of a new reactor--and of all the jobs and tax revenue that come with it. Most important, the powers that be in Washington, including President George W. Bush and Republican leaders in Congress, are firmly behind nuclear's expansion.

The industry's recent relatively solid record of safety and efficiency has helped its image. In the past decade, electricity deregulation has ushered in a wave of nuclear consolidation, with major powers like Exelon, Entergy, Duke and Dominion Resources paying billions of dollars to buy up many of the nation's plants and squeeze more juice from them. Nuclear power now supplies about 20% of total electricity in the U.S., up from just 4.5% in 1973. At the same time, the Nuclear Regulatory Commission has given preliminary approval for three new modular, supposedly safer reactors, while simplifying the byzantine new-plant approval process. Three nuclear-generating companies have already started the process, and half the current reactors in the U.S. are applying for renewals of their soon-to-expire 40-year licenses.

Still, for all the talk about a coming "nuclear renaissance," the industry's growth prospects could easily experience a meltdown. Various pieces of the energy bill being discussed in Washington include the possibility of tax credits, loan guarantees and an extended government-insurance program in case of major accidents, all of which could help spur new construction. But most industry experts say it will take many more federal handouts to convince Wall Street that new nuclear power plants--which went way over budget in their first incarnation--can ultimately be economically competitive. The thorniest issue facing the industry is what to do with the 40,000 tons of radioactive waste being stored primarily at the same plants that produced it. The Energy Department's long-delayed plan to open an underground-storage facility in Nevada remains stalled by lawsuits and local resistance, and no alternative long-term solution has yet gained much traction. Critics say that is reason enough for the nuclear industry to be buried once and for all rather than resurrected. --By Daniel Eisenberg and Eric Roston