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Big Bucks Saved If Aging Hanford Nuclear Plant Closes

Bill DiBenedetto | Monday December 16th, 2013 | 19 Comments

CGS_NRCGovRatepayers in Washington State could save a cool $1.7 billion over 17 years if the Columbia Generating Station (CGS) nuclear power plant at Hanford is closed.

A 212-page economic analysis released last week by McCullough Research of Portland, OR notes that the CGS on the Hanford Nuclear Reservation is the only nuclear facility that was actually completed out of the five plants begun there during the long and tangled history of Hanford. In addition, it contains a General Electric boiling water reactor that’s similar to those that were destroyed during the Fukushima Daiichi nuclear disaster in Japan.

But the study is not about the risks of nuclear generation; it focuses on the economics of the CGS and its possible replacement with other energy suppliers.

“Our conclusion, bolstered by many interviews with the project’s owners and operators, as well as with industry representatives throughout the region, is that CGS can be replaced at a significant cost saving to the region’s ratepayers,” says the report’s author, Robert McCullough.

The study is not recommending the immediate closure of the Hanford nuclear plant, rather it recommends that the Bonneville Power Administration (BPA) issue a request for alternatives, “to see if the unit can be replaced with long-term options that are less costly, less risky and better fitted to regional needs.”

BPA is unique entity: a federal nonprofit agency based in the Pacific Northwest that’s part of the U.S. Department of Energy, but is self-funding and covers its costs by selling energy products and services. BPA markets wholesale electrical power from 31 federal hydro projects in the Columbia River Basin, one nonfederal nuclear plant and several other small nonfederal power plants.

“We believe this report demonstrates clearly that aging nuclear reactors, in addition to having safety problems, are having trouble competing in the electric power market,” says Dr. Catherine Thomasson, PSR national executive director. The report was commissioned by a local affiliate chapter of the Washington and Oregon Physicians for Social Responsibility.

There are four main recommendations:
• “Displace” the plant by less expensive market solutions
• The BPA should request firm bids from suppliers on displacing the plant
• Displacement power should be purchased by plant owner Energy Northwest and supplied to BPA under an existing contract
• Energy Northwest should use a combination of training and employing current workers in plant decommissioning

McCullough says BPA paid $418.9 million to operate the plant in FY 2013. “If BPA had purchased the same energy from the Mid-Columbia market at Dow Jones daily on-peak and off-peak prices, it would have paid $218.5 million. In sum, BPA paid $418.9 million for $218.5 million worth of energy.” That would have been a savings of nearly 11 percent.

“The Columbia Generating Station (CGS) analyzed by McCullough is one of the most uneconomic of the aging regulated reactors,” said Dr. Mark Cooper, economist with the University of Vermont Law School.

The report also states that while the plant is considered “carbon free,” its owner, Energy Northwest, purchased nuclear fuel worth $700 million from a now-closed fuel enrichment plant in Paducah, KY. “The dirty carbon footprint of nuclear power is not as well-known as it should be,” says Susan Corbett, Chair of the Sierra Club Nuclear Free Campaign. “The fact that Energy Northwest served as the broker to run the dirty Paducah nuclear fuel plant for an additional year is a black eye for them and the industry as a whole.”

It’s not like Energy Northwest has no experience with other forms of energy supply. In addition to the CGS, it operates three other electricity generating facilities: White Bluffs Solar Station, Packwood Lake Hydroelectric Project, and Nine Canyon Wind Project.

Time to “displace” nuclear power from the portfolio.

[Image: Columbia Generating Station by NRCgov via Flickr CC]


▼▼▼      19 Comments     ▼▼▼

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  • Charles Scheer

    This article is not objective news. It is a misleading anti-nuclear message parading as news. The quotes in the article are all from prominent anti-nuclear campaigners, and the study was funded by an anti-nuclear group. As a substantive matter, the study appears to favor displacing nuclear with natural gas. A hint or two is made at renewables, but if you’re relying solely on economics and market dynamics, then natural gas is the favored source to replace nuclear. Either way, renewables are more expensive than both natural gas and nuclear – and going free market there is no reason to use renewables at least until the next century when fossil fuel sources begin to decline. Fossil fuels are less costly and less risky, so according to the study I guess we should just use them indefinitely. We should for sure never use solar or offshore wind until at least 2100 or later given their lack of market competitiveness compared to fossil fuels. I like how environmental groups are becoming super-fans of the free market.

    • patrioticus

      I notice most of the articles on any subject by this “publication” are highly verbose structures, lacking for the most part, in truthful and objective fact and are vehicles constructed and created solely for pushing left agenda.
      Easily countered with minor research that the simplest layman is capable of doing-

      • Charles Scheer

        Yes, agreed – simple layman here. :-)

  • Energy Northwest

    In late 2012 the Bonneville Power Administration and Energy Northwest came together to analyze the financial value of Columbia in light of low energy prices in the wholesale electricity market and historic low fuel costs for natural gas-fired power plants. The agencies studied three scenarios and overwhelmingly concluded that Columbia’s continued operation is the most cost-effective option for consumers – to the sum of billions of dollars.
    Read more here:
    http://www.energy-northwest.com/ourenergyprojects/Columbia/Pages/Regional-Value.aspx

  • Chuck from PDX

    This report reflects the facts of electric power generation in the Pacific Northwest currently. Some people may object to tax incentives for wind generation, but they seem to forget about the billions of dollars that were sunk into nuclear power plants that we are still paying off. Bonneville Power Administration now pays 21% of its annual budget for two nuclear plants that were cancelled in the 1980s and the one that was completed – just for their construction. Operating the plant is another 14%. This supplies 10% of Bonneville’s power. So, if you are going to count wind subsidies, you need to count the total nuclear power cost, including construction and all of the federal subsidies it receives. Once wind is built, it does not take a rocket scientist to understand that it is very cheap to operate – much cheaper than nuclear. That is why the combination of the rapid expansion of wind and the cheap price of natural gas is killing aging coal and nuclear plants around the country. The CGS nuclear plant on the Hanford Nuclear Reservation is uneconomical and should be closed.

    • Energy Northwest

      James Conca, in his Forbes post, does a great job of explaining the shortcomings of the PSR report. To wit:

      “The (PSR) report supposedly is an economic argument that gas is cheaper than
      nuclear, which it is at present by a very small amount (see cost
      figure). But if economics were the main substance, than I don’t see why
      the report doesn’t recommend phasing out wind and solar which are many
      times more costly than nuclear or gas.”

      Read the full post here: http://www.forbes.com/sites/jamesconca/2013/12/15/irresponsible-physicians-oppose-nuclear-energy/

      • Chuck from PDX

        Here is what James Conca, a Hanford contractor, had to say to a WA state legislative committee about the situation in Japan after the tsunami:

        “Conca added: ‘I’m very happy that Japan has 26 percent nuclear because
        those will not be the problems. When you see the pictures things burning
        [in Japan], it won’t be nuclear, it’ll be the gas-fired power plants
        and things like that. Nuclear is no problem at all.'”

        Interestingly enough, Japan now has zero percent of its electricity coming from nuclear.

        Here is the source of Conca’s quote:
        http://www.seattlemet.com/news-and-profiles/publicola/articles/nuclear-is-no-problem-at-all

        Here is the quote in context:

        After representatives of the nuke industry touted the industry’s safety
        record—working at a nuclear plant is “safer than working at Toys ‘R’
        Us,” Hanford lab director Jim Conca told the committee—committee
        members asked the industry reps whether they were confident that all the
        safety systems they’d just praised would hold up in Japan.

        Asked specifically about the nuclear situation in Japan, Nuclear Energy
        Institute public affairs director Jim Colgary reassured Rep. Deb Eddy
        (D-48) that the safety systems in place at the nuclear reactors
        “absolutely” would come through. “It’s a conservative safety system,”
        Colgary said.

        “Now, there are some issues with cooling
        water systems, and they’ve brought in diesel generators on trucks to
        make sure that they’re able to keep the reactors cool. It’s not that the
        reactor is a problem, it’s that all this metal is very much heated up
        and hot, so you have to cool that down. … Yes, I’m adequately sure
        that the safety systems in place work.”

        Conca added: “I’m very happy that Japan has 26 percent nuclear because
        those will not be the problems. When you see the pictures things burning
        [in Japan], it won’t be nuclear, it’ll be the gas-fired power plants
        and things like that. Nuclear is no problem at all.”

        • Energy Northwest

          Not sure what that has to do with his comment on PSR not advocating phasing out wind and solar because of its cost compared to natural gas.
          Can you comment on that specifically?

        • Chuck from PDX

          Just curious as to why you would use this person of questionable knowledge on nuclear matters as a keystone for your arguments for keeping your nuclear power plant open.

          As to favoring phasing out wind and solar, we would not favor that at all, which should be obvious. We are concerned about both the dangers of nuclear power and global climate change. We, therefore, favor phasing in energy conservation, wind, and solar energy to replace nuclear, coal, and natural gas. McCullough’s study was our attempt to find out what the cost to the region would be to close the plant. It turns out that it would be a significant savings. Closing the nuclear plant would not be the end point of the discussion, but it would be an excellent start.

        • Guest

          “We, therefore, favor phasing in energy conservation, wind, and solar energy to replace nuclear, coal, and natural gas.”
          The overwhelming focus of the report was about replacing energy from Columbia with natural gas. Is there another analysis of the savings to replace Columbia with only conservation, wind and solar?

        • Chuck from PDX

          The study which PSR commissioned was for the impact on the region of closing the CGS nuclear power plant. It was not a theoretical study of best outcomes, but a study of likely outcomes. We felt this was what utilities would need to make this decision. The likely outcome is that a combination of wind resources, which are mandated to increase in Oregon, Washington, and California in the coming years, and existing natural gas plants that are currently underutilized could supply the power provided by the CGS nuclear plant at cheaper cost than the plant is able to operate. McCullough’s recommendation is that an RFP be put out by Bonneville to see if this would indeed be the case.

          Better long-term outcomes will occur as we continue to advocate for truly green and sustainable resources to replace nuclear and carbon, as is aggressively being pursued in such industrialized nations as Germany.

        • Energy Northwest

          Germany, as you know, is seeing its electricity prices skyrocket because of its move away from well-running nuclear plants. They are also seeing their carbon footprint rise, as is Japan, as is California.

          See what the Tri-City Herald editorial board thought:

          “PSR has failed to make its case. Shutting down a reliable source of energy — which produces enough electricity to power the city of Seattle — doesn’t make economic sense. Given Energy Northwest’s production record, there’s no case to shut it down for safety concerns either.”

          http://www.bellinghamherald.com/2013/12/18/3379093/our-voice-anti-nuclear-groups.html

        • Chuck from PDX

          Interestingly, Germans were so satisfied with their government’s decision to turn away from nuclear and toward solar and wind that they reelected Chancellor Angela Merkel and her Christian Democratic Party to run their government for a third term this fall. Prices for industry have been held harmless, though residential customers have seen increases in rates due to their extremely aggressive increase in solar and wind resources – now topping 20% of Germany’s annual electricity production. Stay tuned. This could be the model for going beyond nuclear and coal. Germany remains the strongest, most stable economy in Europe.

          Japanese citizens are, understandably, not willing to allow nuclear power to continue to operate in their country. Reopening nuclear plants requires the approval of provincial governments, which fear a backlash from their citizens. Do we really want to support a form of energy that can go from a major building block of the electric grid to a smoking pile of toxic rubble in an instant? As the Japanese discovered, all it takes is one bad day to ruin 30 years of safe operation.

          As for California? Well, Southern California Edison only has themselves to blame for shutting those two reactors down. They tried to uprate their steam generators too high and ended up destroying them within one year of replacement, due to vibration. The public was not willing to let them experiment with running these crippled reactors and they had to close them permanently.

        • RegTuffin

          It must be frustrating to deal with a person like Chuck from PDX.

          He is apparently from Physicians for Social Responsibility, yet doesn’t say so up front.

          A post is made about rising electricity rates in Germany and he talks about an election.

          A post is made about rising carbon dioxide and he plays the blame game instead of dealing with the issue put forth.

          A post is made on the economics of his study and he answers with a ramble about fukushima and something the guy said two years ago.

          I looked up James Conca and found this:

          I have been a scientist in the field of the earth and environmental sciences for 31 years, specializing in geologic disposal of nuclear waste, energy-related research, subsurface transport and environmental clean-up of heavy metals. I have found that important societal issues involving science and
          technology are rarely made on the basis of science, but on people’s perception of science. Science is necessary but insufficient. It seems to be more important to understand Fareed Zakaria than Stephen Hawking, although you
          better understand both if you want to solve issues like sustainable energy development. Prior to my present position, I was Director of the New Mexico State University Carlsbad Environmental Monitoring and Research Center, the
          independent and academic monitoring facility for the Department of Energy’s WIPP site, a little-known deep geologic nuclear repository for bomb waste. I
          came to NMSU from Los Alamos National Laboratory where I was Project Leader for Radionuclide Geochemistry and its input into the Yucca Mt Project. Before that, I was on the faculty at Washington State University Tri-Cities. At the
          California Institute of Technology, I obtained a Ph.D. in Geochemistry in 1985 and a Masters in Planetary Science in 1981. I received a Bachelor’s in Science in Geology/Biology from Brown University in 1979.
          ______________________________
          So Chuck from PDX, what are your qualifications to talk authoritatively about nuclear energy or energy in general?

        • Chuck from PDX

          Hi Reg,
          Because I have posted here before in an unofficial capacity, the system seems to recognize me as Chuck from PDX and I am not sure how to make it not do that.

          My name is Charles K. Johnson and I am the director of the Task Force on Nuclear Power for Oregon and Washington PSR. You can find our website here: http://www.psr.org/chapters/oregon/environmental-health-/nuclear-power.html

          My credentials for talking about nuclear energy or energy in general is that I have done a great deal of reading over several decades. I am not a nuclear scientist like Dr. Conca. Nevertheless I did not testify in the following way during the beginnings of the Fukushima accident in a WA state legislative hearing, as James Conca did :

          “I’m very happy that Japan has 26 percent nuclear because those will not
          be the problems. When you see the pictures things burning [in Japan],
          it won’t be nuclear, it’ll be the gas-fired power plants and things like
          that. Nuclear is no problem at all.”

          http://www.seattlemet.com/news-and-profiles/publicola/articles/nuclear-is-no-problem-at-all

          Oops. Or should I say “WPPSS?”

          It is this kind of cocksure attitude that got the Japanese nuclear industry in trouble and could end up doing the same here. We don’t believe that continuing to operate these clearly defective GE BWR reactors, such as the one we have on the Hanford Nuclear Reservation along our Columbia river, makes sense.

          If you are interested in the economic issue, I suggest you read the McCullough Research study – http://www.mresearch.com/reports.html

          McCullough has a strong reputation as someone who knows what he talking about and says what he thinks. That is why we sought him out. He is not anti-nuclear. He is just a good economist.

        • RegTuffin

          So you’ve READ a lot? I’m sorry to say that I don’t base my support for something based on the opinion of someone who has simply “read a lot.” That does not qualify you to offer anything other than an opinion that carries the same weight of every other Tom, Dick and Harry. Which is to say, not much.

          Your diss of Mr. Conca is completely unwarranted, it appears.

          On the other end of the scale, your dismissal of all things nuclear seems just as wrong-headed, no? And if not, maybe you can explain the reasoning.

          From what I can tell, Mr. Conca does not run a nuclear plant so his “attitude” is irrelevant. How would an attitude taken by the Japanese affect the American nuclear energy industry? Can you explain that?

          You use a lot of “coulds” and “mights” and “maybes” but ask readers to make firm decisions that have long-term consequences. I’m sure the good people of the northwest have a higher standard for taking action.

        • Chuck from PDX

          Okay, Reg.

          Mr. Conca is also not an economist, so his opinions on Robert McCullough’s study carry about the same weight as every other Tom, Dick, and Harry. In fact, because of his seemingly unrealistic faith in nuclear power technology’s invulnerability to acts of God, his opinions carry less weight than an average citizen.

          Here are Robert McCullough’s qualifications: http://www.mresearch.com/qualifications.html

          Now that I have told you who I am and revealed my qualifications, such as they are, along with the much more extensive ones of the person we hired, please tell us on what basis you assert your strong opinions on this topic.

          Thank you.

        • Charles Scheer

          The information you are presenting about Germany is inaccurate. Irrespective of renewables, they are increasing coal use substantially and plan to continue to do so. I believe they have a good number of new brown coal plants under construction across the country, including ten new plants coming online by 2015. This information has been widely reported in the business press.

  • http://sanjose.fortuneinnovations.com/ Steve Wampler

    Good post I like it very much Thank you very much for sharing it Thank you,,