Today's Opinions, Tomorrow's Reality
The End of Government's Nuclear Monopoly
WASHINGTON, DC, June 30, 1998 --
The near collapse of Chicago's electrical generation
system during the weekend heat-wave marks a new low for Nuclear Power
in the United States. Six of the twelve nuclear plants owned by Commonwealth
Edison-a Midwestern electric monopoly-sat idle as a surge in air conditioner
usage brought power usage to near record levels. Massive blackouts were
averted thanks only to consumers who heeded ComEd's whimpering conservation
At the time of the crisis, ComEd had two permanently closed nuclear
reactors and another two temporarilyclosed for safety violations. A severe
storm in Western Illinois forced the closure of two additional reactors
at the Quad Cities Nuclear Power Station.
The failure of ComEd to provide basic service has enraged Chicago residents.
The local press has blamed the crisis on the monopoly's inept management.
But it is undeniable that ComEd's problems have been exacerbated by its
massive dependence on nuclear power. Over 60 percent of ComEd's peak power
output comes from nuclear plants, compared with about 20 percent for the
U.S. as a whole. This dependence has led ComEd to suffer like no other
power company from the rising costs of operating nuclear power plants.
The 1979 accident at Three Mile Island forever changed the issue of
nuclear power. Public fear skyrocketed, as did federal regulation. Political
pressures have since made construction of new plants a controversial issue
in the United States. Increased regulation and declining subsidies have
made existing reactors far more expensive to operate than those powered
by fossil fuels.
The future prospects for nuclear power appear very bleak. Total production
peaked in 1995 and has started to decline as first-generation reactors
have been taken out of service. 2 Today, no new nuclear plants are on
The nuclear power industry is dying.
To progressive thinkers, this is a mixed blessing. The nuclear industry
began as an overbearing government attempt to absolve itself from the
sins of World War II. The horrific images of nuclear victims in Japan
were brushed aside by the hopeful prospect of a new and unlimited source
of energy. This malignant beginning has saddled the commercial nuclear
power industry ever since. Nuclear plants have been woefully dependent
upon government assistance, central planning and regulation.
It didn't have to be this way. While today's nuclear industry is terribly
inefficient, there are no technical reasons why nuclear power can't be
economically competitive with other forms of energy. Sadly, the rise of
nuclear power from 1945-1979 happened to coincide almost precisely with
the peak of government power. This caused the industry to develop with
a near absence of competitive influences.
That may be about to change.
Yesterday, the federal government announced plans to privatize one of
the cornerstones of the nuclear industry. The United States Enrichment
Corporation, the sole U.S. producer of enriched uranium for nuclear plants,
will hold an initial public offering managed by Morgan Stanley Dean Witter
and Merrill Lynch.3
Because of depressed prices of enriched uranium, this will have little
practical effect for the nuclear industry as a whole. But the sale marks
the beginning of the end of government control in the nuclear industry.
With deregulation of electric utilities looming on the horizon, 1998 may
prove to be as important to the recovery of nuclear power as 1979 was
to its decline.
While the nuclear industry epitomized by Commonwealth Edison will certainly
die, a new generation may rise from its ashes. Competitive pressures could
offer increased efficiency of operations, more market-oriented designs
and a less centralized approach to nuclear energy. A new generation of
nuclear reactors, freed from the shackles of government dictates, could
prove a valuable asset to a rapidly developing world.
1. The Chicago Tribune, Problems Keep Piling on for ComEd, June