Texas Going Nuclear With Greenpeace Founder's Backing

By Michael Janofsky

STNP nukes

Dec. 17 (Bloomberg) -- Melting icecaps, rising seas and the push to slow global warming are helping Texas utilities push construction of the next generation of nuclear power plants, 30 years after environmentalists stalled the first of them.

Over the next decade, Texas may become the biggest U.S. builder of nuclear generating plants. NRG Energy Inc., Energy Future Holdings Corp., Exelon Corp. and a new utility in Amarillo have proposed eight reactors, a quarter of the planned U.S. total, according to the Nuclear Regulatory Commission.

The industry is taking advantage of new state and federal incentives and is bolstered by a new set of allies: A generation of environmental activists inspired by Al Gore's Oscar-winning documentary, "An Inconvenient Truth" and growing concerns over the impact of climate change. Patrick Moore, 60, a founder of the global conservationist group Greenpeace, is a leading proponent.

"Public opinion has clearly shifted," says Moore, who is a paid spokesman for the nuclear industry-funded Clean and Safe Energy Coalition. He argues that atomic power is a cleaner alternative to coal-fired electric plants, which produce greenhouse gases linked to climate change. "The stigma of nuclear power in North America has largely dissipated."

Even such organizations as the Natural Resources Defense Council and Environmental Defense say nuclear power would be acceptable if solutions are found for the risks that have impeded its development for years: disposal of toxic waste, security against terrorist attack and misuse of radioactive material for weapons.

Gore's Position

For his part, Gore "is not reflexively anti-nuclear," Kalee Kreider, a spokeswoman, said last week in an e-mailed response to questions. Gore believes that nuclear generators won't be "a major solution," citing reservations that include what to do with spent fuel, nuclear proliferation and the large size of reactors, she said.

The Texas generators would be part of a global nuclear construction surge. While countries such as China and Russia need energy for expanding populations, developed countries are being asked to lower production of gases that contribute to global warming. Delegates from 187 countries agreed at a United Nations conference last week in Bali on a framework for two years of negotiations on reducing the emissions.

Through October, 439 reactors were operating in 30 countries, including 104 in the U.S., according to the World Nuclear Association, based in London. An additional 316 were under consideration in 24 countries that already have nuclear energy and in 10 that don't. The new reactors would almost double today's atomic-plant output of 372,000 megawatts, 18 percent of the world's electricity.

Global Warming as 'Excuse'

Nuclear power in Texas still has skeptics, who recall the 1979 radiation leak at the Three Mile Island generating plant in Pennsylvania, the cinematic near-meltdown the same year in the Jane Fonda film, "The China Syndrome," and the real meltdown at Chernobyl in Ukraine in 1986.

"The problem we see is people using global warming as an excuse to do nuclear power while ignoring the need to address the other issues", says Ken Kramer, Texas director of the environmentalist Sierra Club.

Tom Smith, the Texas director of Public Citizen, a national consumer advocacy group, helped force safety upgrades that delayed the opening of four reactors by more than a decade in the 1970s. Smith still sees safety threats in nuclear plants and vows to oppose any new construction, advocating wind and solar power and conservation as better alternatives.

"We're fighting on a second front that we didn't have the first time," he says, recalling late nights sending faxes and arguing against atomic plants on FM radio. "Within the environmental community, there's a great deal of confusion about whether nuclear power should be an option."

Coal Plants Canceled

In Texas, led by Republican Governor Rick Perry, opposition to the proposals so far is barely above a whisper. With mounting energy needs, a surge in population and persistent air pollution in Dallas and Houston, its biggest cities, the state is doing all it can to attract nuclear development.

Texas ranks first in producing and consuming energy, according to the U.S. Department of Energy. Its population will grow 45 percent to 33.3 million by 2030, according to the U.S. Census Bureau. Houston and Dallas failed to meet federal clean air standards for the last five years, the U.S. Environmental Protection Agency says.

With coal-fired power plants losing favor because of their greenhouse gas emissions, Texas electricity suppliers are looking for cleaner sources, including wind and solar. Environmentalists forced the cancellation of plans for eight coal-fired plants before they would support the $45 billion February acquisition of TXU Corp., the state's biggest electricity producer, by the investment groups Kohlberg Kravis Roberts & Co. of New York and TPG Inc. of Fort Worth.

Texas Incentives

While nuclear reactors may cost as much as $6 billion each, they are more reliable than wind or solar energy. The total cost of electricity is comparable to coal and wind, according to the Department of Energy: 5.4 cents for one kilowatt-hour from coal, 6.8 cents from wind and 5.9 cents from atomic power. Solar electricity costs 25.5 cents

Congress set up tax credits and loan guarantees in 2005 to encourage building of nuclear plants. Texas enacted three measures this year creating additional incentives, including reduced local property taxes and state guarantees for decommissioning and decontaminating nuclear plants when they are closed. A third law creates a tax exemption for adding pollution- control devices, which lawmakers say may include nuclear plants.

The central issue for investors is "regulatory certainty," says Governor Perry, 57, a former lieutenant governor who succeeded George W. Bush after the 2000 presidential election. He signed the inducements into law.

South Texas, Comanche Peak

"Companies invest when they are assured that the rules will not change midstream," Perry said in an e-mailed response to questions.

Moore, the Greenpeace founder, met with academics, business leaders and utility company executives last week in Austin, the state capital.

"We're gradually ramping up the efforts," Moore said. "Texas is a key state, a can-do state, and what it decides to do gets done."

In September, Princeton, New Jersey-based NRG became the first company to seek a license to expand its nuclear generating complex southwest of Houston. NRG's South Texas Nuclear Generating Station is one of two atomic sites operating in the state.

Exelon, Amarillo

The other is the Comanche Peak Nuclear Generating Station southwest of Dallas, operated by Energy Future Holdings, formerly TXU. Energy Future Holdings proposes to expand Comanche Peak by two units.

Both lumbered to life in the face of community and environmentalist opposition. South Texas came on line in 1988, 12 years after construction began. While construction of Comanche Peak started in 1974, it didn't open for more than 15 years after an NRC probe found more than 100 potential safety violations.

In 2006, the two plants supplied 10.3 percent of the power on the Texas grid, according to the Energy Department. Natural gas accounted for 50.4 percent, the most of any state, and coal, 37 percent.

Exelon, a Warrenville, Illinois-based company that is the biggest U.S. operator of nuclear generating plants with 10, is considering two locations in Texas. One site would be near the NRG complex and the second, further inland near the Guadalupe River.

Bird Feeder at Door

A fourth project has been proposed for the Texas panhandle, near Amarillo. George Chapman, a local cattleman and real estate developer, notified the NRC in March of his plans. His partner in the new entity Amarillo Power LLC is Constellation Energy Group of Baltimore.

For now, Amarillo Power is based in Chapman's brick ranch house in a suburb south of downtown. It may be the only power company in the country with a bird feeder at the front door.

"I don't like to talk about what I'm going to do until I've done it," he said a brief telephone interview. "But this is really going to open some eyeballs."

Phil King, a Republican lawmaker who led the statehouse push for pro-nuclear legislation, says he expects all four of the projects to proceed.

"This is the best place in the United States to get them done," King says. "The first one to break ground with an operating permit and finances opens the door for a lot of others."

'Old, Bald Men'

Public Citizen's Smith, now 57, says he is "re-energizing the old troops" to fight the new projects, though "they're mainly old, bald men now."

"It's going to be an incredibly hard struggle," says Karen Hadden, 50, executive director of the Sustainable Energy and Economic Development Coalition, an Austin-based citizens group. At the same time, she and other opponents promise a fight.

"Over the past 30 years, there's been a lull in action against nuclear power in general," says the Sierra Club's Kramer, 60. "Now that we have serious applications for nuclear power plants, you're going to see fast-growing opposition."

To contact the reporter on this story: Michael Janofsky in Los Angeles at mjanofsky @ bloomberg.net.

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