WASHINGTON, D.C.–The early signs of the crushing economic burdens which faulty nuclear power plants are placing on electric utilities portend greater trouble as the number of such plants coming on line increases.
Although utilities are not eager to concede these mounting costs, preferring to emphasize rising oil and coal prices instead, the following recent developments should be raising concern in the financial community:
-Boston Edison’s Pilgrim nuclear plant has been shut down for deficiencies since December of last year. The company admits to a cost of $300,000 per day to buy replacement oil.
-The Michigan Utility, Consumers Power Company, recently withdrew plans for a common stock offering. One significant reason was its Palisades nuclear plant which has been out of operation since last August, a breakdown that is costing the company five cents a share in earnings per month. The utility also announced a layoff of up to 5% of its workforce; the Palisades plant’s problems was one of the reasons.
-Consolidated Edison, the giant New York City utility, is now being questioned by the Atomic Energy Commission as to whether its serious financial straits permit sufficient funds to meet its safety responsibilities toward its two nuclear plants. One of these plants has been the subject of bitter disputes between ConEd and the reactor manufacturer over costly design deficiencies.
-Jersey Central Power and Light Company’s offering of 200,000 preferred shares was put off earlier this month due, in part, to a leakage discovered at the utility’s Oyster Creek nuclear plant.
As these developments unfold there will be greater pressure on the AEC to disclose more information about how much of a drain such plants are in utilities around the country. With 45 plants in off-again, on-again operation and 1,000 nuclear plants expected to be built by the year 2,000, the problems of managing these plants are only beginning. As fossil fuel costs level off – and the government could do much to bring down these prices imposed by the petroleum-energy monopolies – the nuclear plant factor as an economic burden will become clearer. Fuel adjustment clauses are automatically passing on higher oil prices to consumers but higher nuclear plant costs have to go through more traditional rate approval channels.
Hitherto, the controversy over nuclear power has centered on the catastrophic risks to health, safety and property should a plant have a major accident, releasing large amounts of radioactive gasses, or be sabotaged. Now two more fronts – the high costs and unemployment that result from trouble ‑ plagued reactors – are opening which should begin to concern the banks, other institutional investors and those labor unions which have been silent on the safety issue. Nuclear plants which lead to financially troubled utilities in turn affect safety maintenance should the pressed company start cutting corners.
Sir Alan Cottrell, the just-returned chief scientific adverse to the British government, pointed out the tough standards which must be maintained for the “light water reactors” used in the United States. In a current letter to the London Financial Times, he wrote: ” I hope that the safety of the public in this country will never be made dependent upon almost super‑human engineering and operational qualities. There are plenty of examples, including recent ones, from various fields of activity where most carefully designed and maintained engineering projects have gone disastrously.” Westinghouse and General Electric insiders know very well the telling truth of Sir Alan’s warning as they struggle against the tide of design defects in the reactor systems which they manufacture.
Serious safety hazards, lack of plant reliability leading to frequent shutdowns, the worry of sabotage, theft of weapons grade materials, and transportation crashes involving deadly radioactive materials are spreading unease through sections of the nuclear establishment inside and outside of government.
In Congress, the Joint Committee on Atomic Energy, led by the two retiring nuclear hawks, Chet Holifield and Craig Hosmer, is trying to quickly push through an early ten year extension of the Price Anderson Act. This infamous law, which would ordinarily expire in 1977, severely limits the amount of money damages which would be paid to victims of a nuclear plant holocaust covering hundreds of square miles. So massive, in terms of hundreds of thousands of casualties and billions in property losses, would be the result of such a big nuclear plant accident or sabotage, that private insurance cannot be obtainedbeyond a fraction of one percent of a big accident’s devastation.
Outraged over the Joint Committee’s power play, Senators Hubert Humphrey and Walter Mondale have pledged to fight the bill on the Senate floor. It could be the first lengthy debate on nuclear power dangers before the full Senate – a commentary on how long it has been overdue.