Paul Holmes 01 Jul 2001 // 11:00PM GMT
On March 28, 1979, a nuclear reactor at Three Mile Island overheated, leading to the worst nuclear incident in the history of the United States. The crisis did not claim a single human life, but if it didn’t actually kill the nuclear industry in this country it at least sent nuclear power into a lengthy coma—not a single nuclear power plant has been built in the 22 years since Three Mile Island made headlines.
But events over the past six months suggest that the time may be right for a resurrection of nuclear power. The portents have never been better. They include an energy crisis in California, an administration in Washington that is sympathetic to the industry’s case, the growing concern over global warming caused by fossil fuels, and steady recent improvement in the operation of existing nuclear facilities.
But the industry’s effective public relations efforts—sustained over two decades, even when the atmosphere was as hostile toward the nuclear industry as it is toward tobacco today—have also played a significant role in its recovery. Until recently, individual companies preferred to hide behind their trade association rather than taking the heat associated with support of being out front on such a controversial issues. But over the past 12 months, a handful of power generators have stepped forward to advocate for nuclear technology and new nuclear facilities.
“If I had talked about building new nuclear plants two years ago, you would have died laughing,” says David Roberts, a lobbyist for Progress Energy, an electric utility holding company. “Last year, you would have chuckled. This year, no one is laughing.”
The watershed event in the turnaround was a meeting in March between seven senior nuclear industry executives and senior White House officials, including Karl Rove, the president’s top political aide; Lawrence Lindsey, the senior economic advisor; and Andrew Lundquist, executive director of vice president Dick Cheney’s energy task force. The next night, the vice president discussed nuclear fuel as an alternative to fossil fuel in an interview on CNBC. “If you want to do something about carbon dioxide emissions,” Cheney suggested, “then you ought to build nuclear power plants because they don’t emit any carbon dioxide and they don’t emit greenhouse gases.”
All of that is not to say that nuclear utilities do not still face considerable obstacles. Opposition to nuclear power among environmental groups remains strong, even though nuclear is being touted as a cure for global warming; not-in-my-backyard attitudes are as strong as ever; and there are still serious questions about how to dispose of nuclear waste.
Those issues won’t deter the handful of utilities that see nuclear as part of their future.
In October of last year, two of the country’s largest utilities made the biggest bet to date on the resurgence of nuclear power. Peco Energy of Philadelphia and Unicom—parent of Commonwealth Edison in Chicago—came together to form Exelon Corporation. Each company had significant nuclear holdings; together they had 15 reactors, and they quickly acquired two additional plants, including the surviving unit at Three Mile Island, giving the new company almost one-fifth of the nation’s 103 nuclear facilities.
In a meeting with the Nuclear Regulatory Commission in January, Exelon explained its plan to seek licensing in the U.S. for the pebble-bed modular reactor, which the company says will be smaller, simpler and safer than any reactor in operation. “It answers every criticism but long-term waste disposal. There is no conceivable way you get a Three Mile Island accident out of that design,” says chairman Corbin McNeill.
Meanwhile, New Orleans-based Entergy Corporation—the second largest operator of nuclear power plants in the country, with five—is poised to begin the licensing process for a new plant for the first time in 25 years, and expects to choose a potential site by the end of the year. “The regulatory climate is better,” says Entergy Donald Hintz. “It helps that gas prices are much higher. When you take those things together, it leads to the conclusion that new nuclear plants need to be considered.”
Exelon president Oliver Kingsley agrees. “We have been working in the industry for years to make nuclear power a viable option and it looks like now that is going to happen,” he says. “California has provided the catalyst or the warning that we do need a national energy policy. And nuclear can play a very active and very significant role in providing the energy needs of the future.”
Utility industry executives are unanimous in their belief that the industry has come a long way since the dark days of the late 70s and early 80s.
“In some ways, what happened at Three Mile Island 20 years ago was a wake-up call for the entire industry,” says Donald Kirchoffner, vice president of corporate communications for Exelon. “It made the entire industry more rigorous. It imposed regulatory requirements on the industry that were both stringent and appropriate. It forced everyone to look at safety and efficiency and to improve performance.”
In the 1980s and 90s, nuclear plants were frequently shut down because of equipment failures. The industry as a whole has increased its output by 25 percent over the past 10 years, and Exelon has done even better, In 1997, when Kingsley took the helm at ComEd, six of the company’s 12 nuclear plants were down and those that were operational were at a miserable 47 percent efficiency. In four years, Kingsley—a former Navy commander—doubled their electricity output. Today, Exelon’s 17 facilities operated at 94 percent efficiency.
That turnaround—combined with concerns about greenhouse gases and global warming—has given the industry a platform from which to communicate.
For the past two years, the Nuclear Energy Institute has been running ads in opinion-leader publications ranging from The Washington Post to the New Yorker touting nuclear power as a “clean air” alternative to fossil fuel electricity generators. One recent ad features a young girl riding a scooter and talking on a cellular telephone below a caption that reads, “Clean air is so 21st century.” A new radio ad, meanwhile, points out that today’s generation uses lots of energy, but expects clean air as well. “Don’t tell them you have to sacrifice the environment for technology,” says a voice-over. “That’s why nuclear is so important to America’s energy future.”
Exelon, meanwhile, has been running a $10 million print and television advertising campaign focused on innovation and produced by Philadelphia-based Tierney Communications, a unit of True North. As part of an integrated effort, Tierney also handled public relations surrounding Exelon’s launch, raising awareness of the new brand and four core values—boldness, creativity, accountability, and commitment—that will be key to its success in the nuclear arena.
“The old ComEd was a classic example of what I would call an outlier,” says Kirchoffner. “We had 12 units but the fact was they weren’t running very well. We also had high management turnover. It wasn’t a safety issue, but the problems gave the impression that there was no discipline in the process, so it was hard to talk about the benefits.”
Inefficient operation meant the one benefit nuclear power had promised—cheaper energy—had failed to materialize. As a result, doubts about the technology’s safety lingered—if utilities couldn’t keep plants online, how could they be expected to guarantee their safety—and the industry’s public relations messages were undermined.
The company has been particularly active at the grassroots level. Says Kirchoffner, “We have been very active in our attempts to reach out to the communities where we operate. We hold open houses for the public and we have held media roundtables for those who cover the industry, and we think we have been very successful in educating people about improvements in the technology and in building the credibility of the industry.”
Exelon’s efforts have even won over some critics. “Exelon has been doing a good job running nuclear plants for the last two years, and we think existing plant licenses should be extended if Exelon can prove that it can continue to run them safely and reliably,” says Martin Cohen, executive director of the Citizens Utility Board, who stops short of endorsing plans for new plants.
The nuclear industry has won support from some powerful business customers in California. Craig Barrett, chief executive of Intel, recently declared that “nuclear power is the answer” to the state’s current woes, while Sun Microsystems CEO Scott McNealy, in a speech at the National Press Club, agreed that “in terms of environmental and cost and competitiveness and all of the rest of it, I just don't see any other solution.”
Exelon has also been paying attention to the investor community, which remains skeptical about nuclear after getting badly burned by cost overruns in the 70s and 80s. Lehman Brothers recently offered Congress a list of requirements that nuclear companies would need to meet before Wall Street would underwrite new plants. Lehman says companies will be expected to invest plenty of their own money, plants will need to be built quickly and on budget—and the public must be on board.
Support for Exelon’s stance has been evident in the performance of its share price. Last year the average industry stock was up a little more than 50 percent, while Exelon’s almost doubled. They closed the year at $70.21 and while they have since slipped back to around $63, the company is outperforming its competitors.
Meanwhile, the general public’s opinion of nuclear energy is shifting too. In October 1999, 42 percent of those polled by the NEI said the “definitely agreed” that more nuclear power plants should be built. In March of this year, 66 percent agreed. And in a poll commissioned by the Associated Press, 50 percent said they supported nuclear power, compared to just 33 percent who were opposed. Two-thirds (65 percent) said they felt U.S. nuclear plants are safer now than they were 10 years ago. And of those who supported the industry, 55 percent said they would support construction of a nuclear plant within 10 miles of their home.
“Public opinion is shifting,” says Kirchoffner. “The latest study shows that more than half the public has a favorable opinion of nuclear power, and the closer people live to a nuclear plant the more favorable their opinion is. There’s still a lot of opposition out there, but there’s less negative feeling than there was a few years ago.”
But it’s in Washington that the industry has enjoyed its greatest success. The ongoing public relations campaign has made headway with opinion leaders in Congress, including some who were previously mistrustful. Senator Bob Graham, a Florida Democrat concerned about the potential for flooding in his state if global warming continues, was won over by a Nuclear Regulatory Commission study showing that if the U.S. used nuclear power to the extent France does—80 percent of its electricity is generated by nuclear plants—it could achieve the goals of the Kyoto treaty, which calls for a reduction of CO2 emissions below 1990 levels.
According to Graham, “The technology exists to make nuclear power—already one of our cleanest energy sources—also one of our safest, most reliable and least expensive.” That’s why he agreed to co-sponsor a bill to expand the use of nuclear energy and support research into technology to minimize nuclear wastes, introduced by Senator Pete Domenici, New Mexico Republican.
Under the circumstances, industry leaders can be forgiven if they sound more optimistic about the nuclear than they have in years. “If I had talked about building new nuclear plants two years ago, you would have died laughing,” says David Roberts, a lobbyist for Progress Energy, an electric utility holding company. “Last year, you would have chuckled. This year, no one is laughing.”
But some environmentalists are not convinced by the nuclear industry’s green claims. They point out that nuclear fuel will primarily be substituting for natural gas—which emits less carbon dioxide than any other major fuel source—and won’t do anything to reduce emissions from cars, for example. Moreover, fossil fuels are burned in mining and preparing nuclear fuels and in building reactors. So no one is pretending that getting new plants built is going to be easy.
The “not-in-my-backyard” syndrome is likely to be significant, as is the waste disposal issue. The federal government has been trying for 20 years to build a permanent dump for radioactive waste at Yucca Mountain in Nevada. But environmental groups and local officials say the site is unsafe and the state of Nevada has pledged to do whatever it takes to fight the project.
But the industry is in a stronger position than it has been in more than two decades. Improved performance, concern over global warming, the perception of an energy crisis, and the industry’s long, sustained public relations effort have combined to create an atmosphere in which the construction of new nuclear plants is no longer unthinkable.