Bloomberg News

Toshiba Reactor Unites Feuding U.S. Nuclear Regulators

December 20, 2011

(Corrects date for Scana’s second reactor in 15th paragraph.)

Dec. 15 (Bloomberg) -- Toshiba Corp.’s Westinghouse Electric won majority support for the design of its AP1000 reactor from the U.S. Nuclear Regulatory Commission, even as the members were feuding publicly over the panel’s leadership.

The NRC issued a notice yesterday that the third of five commission members voted to certify the design that Southern Co. and Scana Corp. plan to use for new units at existing U.S. nuclear plants.

The action opens the door for a new generation of U.S. nuclear plants, Dale Klein, a former NRC chairman, said yesterday in an interview. The AP1000 also has the potential to become a “very dominant player in worldwide nuclear activities,” according to Klein, associate vice chancellor for research at the University of Texas System in Austin.

Commissioner William Magwood voted Dec. 6 to certify the design for the AP1000, the commission said. Approval by NRC Chairman Gregory Jaczko and Commissioner George Apostolakis had been announced earlier this month.

“It is a very encouraging first step on a lengthy road to the operation of new energy facilities,” Steve Kerekes, a spokesman for the Nuclear Energy Institute, a Washington-based industry group, said in an e-mail.

The full commission hasn’t scheduled a vote on the final certification rule, a step before companies can win licenses to build the AP1000 reactor designed by the unit of Tokyo-based Toshiba. The NRC hasn’t issued a construction license for a U.S. nuclear plant since a partial meltdown at the Three Mile Island facility near Harrisburg, Pennsylvania, in 1979.

‘Extreme Behavior’

Magwood, who joined Jaczko in backing the AP1000, told a House committee yesterday that the chairman had engaged in “extreme behavior” by verbally abusing female employees. Jaczko bullied staff and created a chilled work environment at the agency, all four of the chairman’s colleagues told the House Oversight and Government Reform Committee that’s examining discord within the agency.

“Many of these instances that they’re referring to have been misconstrued,” Jaczko, 41, told lawmakers. “I’ve listened very carefully to the concerns of my colleagues.”

Jaczko also has said the commission’s majority “loosened the agency’s safety standards” over his opposition.

Some of the strife has concerned what steps may be needed to improve the safety of U.S. reactors after an earthquake and tsunami in March triggered meltdowns and radiation leaks at Tokyo Electric Power Co.’s Fukushima Dai-Ichi nuclear plant.

Possible Changes

Jaczko and Magwood voted to move ahead with the AP1000 while reserving the option of requiring added safeguards later.

“As we develop a regulatory response to Fukushima, it is certainly possible that some changes may need to be made to the AP1000 or at least to any” license using the design, Magwood said in comments attached to his vote.

Major changes probably won’t be required because the AP1000 design already incorporates safety features singled out by an NRC task force that examined U.S. plant safety after Fukushima, Andrew Levi, a New York-based utilities and power analyst with Caris & Co., said in an interview.

“I don’t view them as a big risk at all,” Levi said of requirements that may be placed on Southern and Scana as the NRC seeks to prevent cascading failures that doomed Fukushima’s three reactors.

Southern Co. of Atlanta still expects its two new reactors to begin commercial operation in 2016 and 2017, Steve Higginbottom, a company spokesman, said in an e-mail. Scana’s reactors are on schedule to start producing power in 2016 and 2019, Rhonda O’Banion, a spokeswoman for the Cayce, South Carolina-based company, said in an interview.

Design Changes

The NRC must vote final approval for design changes to the AP1000 reactor, whose concrete-and-steel shell was strengthened to withstand aircraft strikes, before issuing construction and operating licenses to the utilities.

Southern has dug foundations for a $14 billion project to add two reactors to its Vogtle plant, about 26 miles (42 kilometers) southeast of Augusta, Georgia. Scana plans to build two reactors for its Virgil C. Summer plant about 26 miles northwest of Columbia, South Carolina.

The companies, which have already spent billions of dollars to lay groundwork for the new plants, can’t begin construction on buildings to house the new reactors without federal licenses.

License This Year?

Southern expects the NRC to hold a public vote certifying the AP1000 soon, and the company “remains confident” that the agency will issue its license “shortly after” the vote, Higginbottom said.

Scana anticipates “receiving our combined construction and operating license this year or early 2012,” O’Banion said.

To do so, the other commissioners would need to override Jaczko’s opposition for the licenses’ expedited approval, which Southern and Scana requested earlier this year.

The companies “must accept the risk of potential delays” in the NRC’s rule-making process, Jaczko said in comments attached to his Dec. 6 vote.

NRC commissioners choose whether to make their votes public, and individual members of the panel determine when the votes are released, Scott Burnell, an agency spokesman, said in a phone interview.

Jaczko had said May 20 that Westinghouse would need to provide more information about the ability of the AP1000’s shield building and containment structures to withstand accidents. NRC staff said Aug. 9 that the design is safe.

Standardized Design

The nuclear industry and investors will be watching closely to see if Southern and Scana can deliver the four new reactors on time and on budget, breaking with costly overruns that plagued nuclear plants built during the 1970s and 1980s, Levi said.

Unlike the earlier generation of power plants, Southern and Scana have the benefit of a standardized reactor design developed by Westinghouse and lessons learned by Chinese counterparts who are constructing the first two AP1000 reactors.

“No doubt there’s risk, but it’s manageable,” Levi said.

‘Wobbly Limb’

The AP1000’s design is inadequate to withstand potentially high pressure inside the reactor, according to a November report commissioned by the environmental groups Friends of the Earth, based in San Francisco, and the North Carolina Waste Awareness & Reduction Network. The environmental groups have vowed to block the AP1000’s construction in the courts unless the NRC reconsiders the design.

If the NRC issues licenses to Southern and Scana, the AP1000 reactors will need to be corrected at a cost to taxpayers and utility customers, Jim Warren, executive director of the Durham, North Carolina-based organization, said in a phone interview.

The NRC “is sticking them out on a very wobbly limb if they try to move forward,” he said.

--Editors: Larry Liebert, Steve Geimann

To contact the reporters on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net; Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net


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