U.S. Nuclear Power Survival Part 2

Issue 1 and Volume 7.

Mary Jo Rogers   By Mary Jo Rogers, Ph.D., Partner, Strategic Talent Solutions

The Washington D.C.-based Center for Strategic and International Studies (CSIS) recently released a paper on the economic and national security imperatives that should compel lawmakers to enable the U.S. nuclear industry to be more competitive in the global nuclear energy arena and thereby maintain a crucial leadership role. In Restoring U.S. Leadership in Nuclear Energy, the CSIS explains how state and federal mandates for renewable energy have created market distortions in the electricity sector. Combined with sustained low natural gas prices, direct and indirect renewable subsidies have made nuclear power uneconomic. In addition to current economic disadvantages, the other major challenges to U.S. nuclear leadership are export market impediments and domestic challenges. Domestic challenges include excessive capital costs for new construction, waste management uncertainties, gaps in public acceptance, and regulation.

“Regulation” – in particular, self-regulation – is the one area in which the industry has the ability to make improvements directly. Although the authors only briefly discuss the impact of compounding regulation (NRC) and self-regulation (INPO), they express concerns about added regulatory requirements that lack commensurate safety benefits that, in turn, contribute to financial pressures and potential additional plant shut-downs. This concern is not academic, in that regulatory issues have been cited in recent plant closure announcements, such as the SONGS shutdown in California.

There is widespread recognition that the nuclear power industry has benefitted from the diligence and high standards of the NRC and INPO, which have helped raise overall plant performance to high levels. Nonetheless, there is also now an acknowledgement that cumulative regulation has become notably burdensome to the management of nuclear facilities across the U.S.

Both the NRC and INPO have started looking at the cumulative impact of regulation and possible ways to address it. The Nuclear Energy Institute (NEI) is working with the NRC on ways to assess the effects of regulation and potential tools for managing the totality of regulatory actions. Initial NEI presentations on the subject include 22-page and 30-page slideshows replete with flow charts, spreadsheets and tables, plus multiple appendices with additional information. NEI has proposed pilot projects on cumulative impact at plant sites next year, but the NRC commissioners would have to be involved in any pilots and the NRC is moving at a slower pace.

The NRC is working on an initial paper on regulatory efficiency due next July, and it is working on another paper on cumulative impact that will not be complete until 2015. While you would expect and want potential changes impacting nuclear power regulation to be detailed, comprehensive and not rushed, I fear that the industry and the regulator are over-engineering and broadening potential solutions to the problem of low-value regulatory burden.

INPO has had teams working on cumulative impact and recently shared with its members the first report on “short-term” actions. The INPO report, which focused on four initial areas, is 92 pages long. It provides excellent problem definitions, lists of insights on how the problem evolved, desired end state descriptions as well as actions. It is exhaustive. The section on “Initial Improvement in Management and Leadership” alone includes over 35 behaviors and responsibilities for supervisors and managers. It is not surprising that there have been grumbles in the industry that the activities to address cumulative impact are creating additional burden.

I don’t mean to be critical of the efforts of people who have worked hard to understand cumulative impact and identify ways to reduce regulatory burden. My main concern is that INPO’s ability to lead the industry in reducing regulatory burden may be significantly constrained by its own mental models and by how it has historically addressed any problem. INPO’s mission is “to promote the highest levels of safety and reliability—to promote excellence—in the operation of commercial nuclear power plants.” In speaking to the BP Oil Spill Commission in 2010, Jim Ellis, then CEO of INPO, stated that INPO has strongly and successfully resisted any efforts over the years to alter its mission.

Recall that the industry’s most significant gains in safety and reliability performance began in the late 1990’s, when a number of utilities started participating in de-regulated electricity markets that put great pressure on plants to perform. I suggest that true innovation in the efficient management of nuclear energy in the future will need to come from outside the institutions that are currently so tightly interwoven to protect the industry from lapses in safety.

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