Platts - Monday, November 07, 2005
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Former US EPA chief urges utilities to help shape air policies

Hollywood, Florida (Platts)--7Nov2005

US investor-owned utilities need to get involved early to help shape
state or federal regulations on carbon emissions and climate change and
abandon its opposition to any changes in current policy, former Environmental
Protection Agency administrator Christine Todd Whitman told a meeting of
industry executives Monday before a group of investor-owned power utilities.

"It's important not just because it's the right thing to do, but it makes
good sense for business," Whitman said at the Edison Electric Institute's
Financial Conference in Hollywood, Florida. "It's not an easy task," she
added. "You're standing at a time of real uncertainty in the utility industry
and the government is sending a host of mixed messages."

While legislation on carbon emissions and clean air have had mixed
successes in Congress and lawmakers seem ambivalent about imposing national
environmental standards, those standards still are on the precipice of change
and that change is starting to occur with the states, Whitman said. "If the
states are a laboratory, we are moving toward a national carbon policy,"
Whitman said.

There are 45 programs in 30 states addressing climate change and
the carbon emissions that could lead to it. Eighteen states have policies that
require a percentage of energy be produced from renewable sources and many
states are joining together in regional groupings to reduce greenhouse gas
emissions.

But the states' leadership in adopting stringent environmental standards
in the absence of a national standard causes its own problems for the
industry. "The lack of harmony makes it difficult to make long-term
investments," she said.

Whitman added that the best way to go would be to support a national
standard, an action that could prompt some states to back off developing their
own standards. "I do sense there will another run at [national environmental
standards] and it's going to be bipartisan," so electric utilities will have
to come to the table and try to help establish environmental standards or a
cap on carbon emissions the industry can live with, she said.

"The best way to protect yourself is to be proactive and act now to
strengthen your position as responsible environmental leaders," Whitman said.
"When legislative and regulatory language is being drafted, you want to be
there."

Environmental policies can have a very negative impact on the electric
utility industry's bottom line, but it's the clearest example of the need for
utility companies to be actively engaged in the discussion, Whitman said.

Although the US hasn't signed on to the Kyoto Protocol and passage of any
clean air legislation remains up in the air, most politicians accept that the
climate is changing and people have an impact on that change, she said. The
public also has reached a broad-based consensus that climate change is an
issue. It isn't to the extent of the environmental movement of the 1970s, "but
climate change is definitely on people's minds," Whitman said.

And it is on investors' minds as well. Some investor groups are
persuading power companies to adopt environmental goals ahead of government
action.

Despite this, the public doesn't rank the environment as its highest
priority. Their concern, Whitman said, "hasn't affected their sense of
urgency. They know they're concerned, they just don't know how concerned to
be."

One force that may be resulting in what Whitman called a "patchwork
quilt" of state regulation is public ambiguity regarding environmental
concerns. While they are unsure how concerned they need to be over the
environment, they become very concerned when a liquefied natural gas terminal
or a nuclear plant is proposed near where they live.

"One thing about Americans, we are very good at saying no, and that's
part of the problem," she said, noting that the public tends to oppose new
nuclear plants despite changes that make the fuel far safer than it was in the
1970s. She added that the future of energy is a fuel mix, because renewables
will never make up more than 20% of that mix. "We ought to do it quicker and
do it more, but it will never be 100%," Whitman said.

Nuclear, from an environmental point of view is the cleanest, Whitman
said, "but the reality is public perception that the technology hasn't
changed. "I don't think we'll see a broad-based shift to nuclear unless we
educate people better."

---Valarie Jackson, valarie_jackson@platts.com

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UK manufacturers, lawmakers push for expanded role for nuclear

London (Platts)--7Nov2005

Challenges to the ruling U.K. Labor Party's attitudes toward new nuclear
construction were raised last week in two influential venues, with assertions
that nuclear deserves to be given the same status as renewable energy sources
and that new reactor designs could be brought on line in half the time
predicted.

Calls for new perspectives to be taken on the nuclear issue were made Oct. 24
by the U.K. manufacturers' federation, which claimed that energy is now the
top issue troubling British manufacturers. Also, during a Parliamentary House
of Lords' energy debate Oct. 27, a number of peers warned the U.K. has no
secure technology for future baseload requirements but nuclear.

After more than four hours of debate by the peers, U.K. government Science
Minister Lord David Sainsbury conceded to the debate's inaugurator, Baroness
Detta O'Cathain, that "nuclear is a renewable" because of its
carbon-emission-free status.

O'Cathain had noted the U.K. government's continued denial that nuclear could
be categorized as a renewable. She had pushed for the debate, she said,
because of the peers' "deep concern about future energy supplies."

O'Cathain, an economist with wide commercial expertise, said "question after
question" had been directed by the House of Lords to the government over the
country's lack of policy about long-term energy security. "We have been fobbed
off time and time again," she said. She likened government officials to a
bunch of ostriches unable to face up to the seriousness of the situation.

Rather than new energy "proposals" in 2006 promised recently by Prime Minister
Tony Blair, she said, energy security policy decisions are needed now. The
government should face up to the matter with a sense of urgency, she said.

Domestic electricity demand has increased by 20% since 1990, she noted, with
the U.K. this year becoming a net importer of natual gas. Gas and renewables
were the government's chosen electricity generating fuel sources following the
2003 energy white paper, which set out a policy of merely keeping new nuclear
construction open as an option.

By 2015, existing coal and nuclear stations that currently supply more than
50% of the country's electricity demand would be "well along the way" to being
phased out, she said. The resultant supply deficit is expected to be filled by
a natural gas, much of it from "somewhat politically unstable" countries. Such
import reliance does not exactly "produce a comfort-zone feeling," she said.

"Of course, we are all aware of the great drive towards renewables?wind
turbines, onshore and offshore; photovoltaics, and wave power to mention but a
few. Again, I fear, I do not get much of a comfort-zone feeling from that
list."

O'Cathain acknowledged renewables were likely to be a very important component
of any future energy supply mix. "But there is no quick-fix from them?at least
not from the current categorization of renewables as defined by government,"
which "staunchly" denies that nuclear is a renewable resource, she said.

The full version of this story was published in Platts Nucleonics Week.
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Swedish spent fuel program 'not modern,' prime minister says

Stockholm (Platts)--4Nov2005

Sweden's program for dealing with spent nuclear fuel is "not modern" and
Sweden should go on looking for something to replace it, the Nordic country's
prime minister said Oct. 29.

Speaking at a press conference during his Social Democratic Party's congress,
Goeran Persson said that "when you visit the (repository) laboratory, and see
the process, you feel instinctively that it's not modern."

Sweden and Finland are among the countries the furthest along with plans for a
final repository. Both countries have chosen the KBS-3 method, in which spent
fuel would be put into copper-steel canisters that would be moved to a final
repository about 500 meters (1,640 feet) deep in bedrock.

As a concession to critics of the system, the Swedish government has said the
spent fuel should be retrievable in the event of a problem or if better
disposal technology were developed. In practice, however, retrieval would be
prohibitively expensive.

Persson said that his doubts about the handling of spent fuel have made him "a
committed nuclear opponent."

Nonetheless, the Swedish government last month approved continued operation of
the Ringhals nuclear plant and power uprates at two of the units, in a
landmark decision. An environmental court had asked the government to review
the plant's application for continued operation under Sweden's new environment
law. One of the court's concerns was spent fuel because, the court said,
Sweden does not have a final repository.

In its decision, the government said that it believes "there is an effective
system for handling of spent fuel," in the interim, and that work on a final
repository is progressing well.

The government noted that both the Swedish Nuclear Power Inspectorate (SKI)
and the Swedish Radiation Protection Authority (SSI) regularly review progress
on the repository plans and that SKI has said that it feels the repository
program developed by the Swedish Nuclear Fuel & Waste Management Co. (SKB)
meets the requirements of the new environmental law. SKB is jointly owned by
the country's nuclear utilities.

While the government in its decision also called spent fuel "one of the most
dangerous types of waste mankind produces," it did not explain why it was
willing to approve uprates that will result in more spent fuel.

Saida Laarouchi Engstroem, who is in charge of SKB's environmental impact
assessment for the repository, noted that the government has consistently
approved SKB's research and development plans for a repository, based on SKI's
and SSI's recommendations. She said the company plans to continue with the
program, as directed to by the government's decisions.

"Those decisions say to me that we're going in the right direction," she said.
"The prime minister's comments don't change anything." she said.

She added that SKB's goal "is to find and use the safest method, not
necessarily the most modern. We don't want to use something that was developed
yesterday, just because its 'modern.' Our method has been tested and developed
for 30 years."

Goeran Bryntse, head of the Swedish Antinuclear Movement, said that he was
glad Persson had spoken out but added that Persson's position is inconsistent
given the government's approval of Ringhals.

He added that the repository program should be administered by an agency that
is independent of the nuclear industry. Allowing SKB to run the program "is
like setting the fox to guard the hen house," Bryntse said.

Parliamentary opponents of Persson's minority Social Democratic government
also questioned his comments.

Christian Democratic member of the Riksdag (parliament) Mikael Oscarsson filed
an interpellation Nov. 2 that asks Persson whether he will try to stop the
repository program; what he plans to do to ensure spent fuel and nuclear waste
are handled in the safest possible way; and what other, more modern method he
would chose over KBS-3.

Persson must go to Riksdag within two weeks to reply to the query.

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NRC staff wants to end fire protection rulemaking

Washington (Platts)--4Nov2005

A proposed fire protection rule should be withdrawn and the rulemaking process
terminated, NRC staff told the agency's Advisory Committee on Reactor
Safeguards (ACRS) at a meeting today. The staff said that adverse public
comments and the prospect of the industry filing hundreds of exemption
requests with the NRC persuaded it that the proposed rule on post-fire
operator manual actions, noticed March 7 in the Federal Register, should not
be adopted. The staff is requesting an ACRS letter supporting the
recommendation, which must be approved by the commission. Alexander Marion of
the Nuclear Energy Institute said at the meeting that the industry opposes key
elements of the proposed rule in its current form, but not the rulemaking
itself. The industry is developing guidance on the subject that it will submit
for NRC approval in December, Marion said.

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Following US, Russia aiming for more nuclear commerce with India

New Delhi (Platts)--3Nov2005

In the wake of the July 18 agreement between India and the US for future
nuclear cooperation, calling for compromises to exempt India from some
domestic and global nonproliferation restrictions, the Russian Federation is
likewise preparing to intensify nuclear cooperation with India, Indian and
Russian officials said.

Natwar Singh, India's minister for external affairs, met with Russian Foreign
Minister Sergei Lavrov in Moscow on Oct 28. According to an official statement
issued by the Indian government after the meeting, "the Russian side indicated
that cooperation between India and Russia could be expanded."

Diplomatic sources in Vienna said that officials from India's Department of
Atomic Energy (DAE) have discussed with counterparts from Russia's Federal
Atomic Energy Agency a roadmap for extending future nuclear commerce,
including more power reactor sales by Russian industry. A similar outline has
been sketched out for bilateral nuclear trade between the DAE and Canadian
industry, they said.

During a meeting of the Nuclear Suppliers Group (NSG) in Vienna two weeks ago,
Russia made a statement firmly backing the position taken at that meeting by
the US to grant an exception to India from NSG rules. Since 1992, these have
barred nuclear trade by the NSG's 35 members, which include Russia, with
states, including India, which are not parties to the Nuclear Nonproliferation
Treaty or which do not have full-scope IAEA safeguards in place.

Since 1992, during NSG meetings Russia has argued that a bilateral protocol
with India from the late 1980s over supply of VVERs should be fully
grandfathered, allowing Russian industry to sell power reactors to India
indefinitely. Other NSG members, including the US, have until now objected to
any further Russian sales beyond two units now under construction at
Kudankulam in Tamil Nadu state.

According to NSG sources, when the US announced this summer it favored
full-blown nuclear trade with India, the disagreement between Russia and other
NSG members over future Russian-Indian reactor sales had not been formally
resolved, and it was anticipated that Russia would renew efforts in the NSG to
obtain support for sale of more VVERs to India.

Indian and Russian officials said that future talks between the DAE and
Russian industry could result in a memorandum of understanding for sale of two
to four more VVER-1000s to India. The process may move forward, sources said,
when Indian Prime Minister Manmohan Singh visits Russia in early December.

When the Indian cabinet on Sep 22 approved sites for eight new reactors, that
plan expressly included room for two more 1,000-MW PWRs at Kudankulam and two
more at a new site in Maharashtra state.

According to diplomatic sources, during meetings in Moscow last week, Lavrov
urged Singh to support Russian efforts to delay reporting by the IAEA Board of
Governors of Iran's safeguards violations to the United Nations Security
Council. Both Russia and India are members of the IAEA board.

Sources said the prospect of bilateral nuclear commerce with Russian industry,
as well as desire for natural gas from Iran, may prompt India to support the
Russian position; however, India will remain under pressure from politicians
in the US to support US efforts to have the IAEA report Iran to the Security
Council. The text of the Indian communique on this point did not exclude the
possibility of a future Security Council referral: "On the Iran nuclear issue,
the two sides agreed that this matter should be discussed within the IAEA and
that the situation should not be allowed to escalate to a point where the
process of dialogue is stopped."

Sunil Saraf, New Delhi; Mark Hibbs, Bonn

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Dominion's third-quarter nuclear capacity factor at 98.5%

Washington (Platts)--3Nov2005

The seven-unit Dominion nuclear fleet's 98.5% capacity factor in the third
quarter was "at or near company records," Dominion President and Chief
Operating Officer Thomas Farrell said today during a conference call with
analysts to discuss quarterly earnings. Millstone-3 and North Anna-2 each
refueled in 28 days during the quarter, he said. The Millstone-3 outage was a
unit record for short duration and the North Anna-2 outage was completed "well
ahead of schedule," Farrell said. Dominion Generation, which includes all of
parent Dominion's generating assets, reported third quarter earnings of
$204-million, down $7-million from a year ago. Dominion's earnings were
$373-million, down $27-million from a year ago, primarily because of higher
Virginia fuel expenses and the effects of hurricanes Katrina and Rita, the
company said.

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Sweden to delay decision on nuclear tax hike until Dec 10

London (Platts)--3Nov2005

Sweden's Social Democrat-led government is scheduled to make a decision
Dec 10 on a proposed hike in nuclear tax for 2006, a spokesman for Svensk
Energi the Swedish energy industry's representative body, said Thursday. This
date is later than had been expected.

The new Swedish budget, which proposes an 85% increase in nuclear tax,
will bring in an additional SKr1.39-bil ($170-mil) next year, based on current
installed capacity, bringing the expected total to around SKr3-bil, according
to recent government estimates. The Swedish government was due to approve the
proposal early October.

The profit tax charged to hydro power producers will also increase
sharply should the proposal go through. The property tax on hydro companies
will increase from SKr750-mil this year to SKr2.75-bil in 2006. These will
slice into windfall profits made by carbon-free power producers since the
introduction of carbon emissions trading. Meanwhile carbon tax on heat
production will be reduced to zero from January 2006.

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UniStar plans submittals in 2007/08 for potential new EPRs

Washington (Platts)--2Nov2005

UniStar Nuclear partners intend to submit a design certification application
in December 2007 to the NRC and a combined construction permit-operating
license application in June 2008, Constellation Energy and Framatome ANP
officials said today. Representatives of the two companies, which created the
joint venture UniStar in September, met with agency staff at NRC headquarters
to clarify their plans to develop, license, and deploy a fleet of Evolutionary
Power Reactors (EPRs). The UniStar business plan envisions Constellation as
the principal owner and operator of the EPRs built in the U.S. Under the plan,
the EPRs would be standardized from construction to operation, company
officials said.

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NRC to issue rule revising core cooling requirements

Washington (Platts)--2Nov2005

The NRC will soon issue a long-awaited rule to risk-inform emergency core
cooling regulations, the agency said in a Nov. 1 press release.

The rule proposes "the voluntary use of risk information in refining
requirements for how nuclear power plants must safely handle loss-of-coolant
accidents (LOCAs) of various sizes," the NRC said.

"The proposed rule would divide all coolant piping breaks currently considered
in emergency core cooling requirements into two size groups: breaks up to and
including a 'transition' size, and breaks larger than the transition size up
to the largest pipe in the reactor coolant system," it said. "The transition
size was determined through input from an expert panel as well as
consideration of uncertainties in established pipe-break frequencies."

"Break sizes for each reactor type (PWR and BWR) were selected that
corresponded to a break frequency of 1.0E-05 per reactor year," resulting in a
range of values for the transition break size (TBS) "from approximately 6
inches to 10 inches equivalent diameter for PWRs and from approximately 13
inches to 20 inches equivalent diameter for BWRs," staff said in a March 29
paper (Secy-05-52) proposing the new rule. Determination of the TBS has been
the most controversial element of the rulemaking, so these ranges may well be
revised in the final rule.

An NRC staffer told Nucleonics Week that the rule would likely be published in
the Federal Register in "a matter of days."

In a statement, NRC's Jim Dyer said, "All the possible pipe breaks would still
be covered under this rule change."

Dyer, director of the NRC's Office of Nuclear Reactor Regulation, said,
"Breaks in the smaller group are considered more likely, and they'd be
analyzed using existing criteria for ensuring the reactor core stays cool
during and after an accident. Breaks in the larger group are considered less
likely and would be analyzed with less-stringent methods, but plants would
still have to show us they can mitigate the effects of those breaks and
maintain core cooling."

Under the rule, such LOCAs would be considered beyond-design-basis accidents
and subject to probabilistic risk assessments modeled on RG 1.174, the NRC's
regulatory guide for risk-informed decision-making at nuclear plants.

Determining a TBS that is acceptable to both NRC staff and industry has been
the most contested element of the new rule, which the NRC staff has been
developing for more than four years. Currently, federal regulations (10 CFR
50.46) require analysis of emergency core cooling system response to
large-break LOCAs involving a double-ended guillotine break of the largest
pipe in the reactor coolant system. Industry has pushed for a smaller TBS,
which it says would maximize both safety and economic benefits.

The industry contends that delaying activation of emergency diesel generators
in a worst-case small break LOCA might be possible under the proposed rule
without significant increased risk, reducing wear and tear on the generators
and improving reliability. Additionally, activation of containment sprays
during a LOCA could potentially be delayed on the order of hours, which could
conserve spray-water inventories and improve containment sump recirculation
performance.

The new rule could enable plants to make these and other changes?primarily
power uprates for PWRs -- that would have a net present value of $1.5- to
$12.9-bil (assuming a discount rate of 3%), according to NRC staff's
regulatory analysis released in April along with the proposed rule changes.

Steven Dolley, Washington

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Progress Energy seeks NRC approval for 2 dual-unit COLs

Washington (Platts)--1Nov2005

Progress Energy plans to seek approval of two dual-unit COLs, the company
announced today. Progress Energy officials told NRC staffers at a packed
meeting at agency headquarters in Rockville, Md. that they expected to file
the combined construction permit-operating license (COL) applications in late
2007 and hoped to have the new units on line by late 2015 or early 2016,
assuming the company eventually moves ahead with construction. Progress Energy
officials said they have not yet chosen the reactor technology or the
locations for the new units. Both decisions are expected to be made by early
2006. The company is considering Westinghouse Electric Co.'s AP1000, GE
Energy's ESBWR, and Areva Inc.'s U.S. Evolutionary Power Reactor. It will
choose one site in the Carolinas and another in Florida, company officials
said.

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