Exelon unable to quantify quake costs

By Reuters
Posted March 24 at 3:31 p.m.

The U.S. nuclear industry will see a “significant” increase in operating and regulatory costs following the Japanese nuclear emergency, but the magnitude won’t be known for several months, the head of the largest fleet of U.S. nuclear reactors said on Thursday.

John Rowe, chairman of Chicago-based Exelon, told investors that U.S. nuclear plants remain safe, but the industry is preparing for changes in several areas of regulation following investigations of the partial meltdown and radiation release unfolding at the Fukushima Daiichi plant after the March 11 earthquake in Japan.

“This is going to impose significant costs, perhaps material costs, before we are done,” said Rowe. “We just can’t put a number on it.”

Exelon operates seven of the 23 General Electric Co Mark 1 boiling water reactors operating at U.S. nuclear power plants that are similar in design to one of the crippled Daiichi reactors. They are located in Illinois, Pennsylvania and New Jersey.

On Thursday, Exelon executives said the units remain safe to operate, citing U.S. regulatory requirements to modify the plants over time, changes they do not believe were made in Japan.

Rowe and other Exelon executives said modifications made to similarly designed reactors in the U.S. and emergency planning procedures reduce the likelihood of a Fukushima event here, but the industry will need to learn what it can from the accident and be prepared for possible regulatory changes.

Rowe said he expects regulators over the next five to six months to closely scrutinize adequacy of the Mark 1 containment system and maintenance procedures for spent-fuel pools, particularly for fuel left in the pools after the required five-year cooling period.

He also expects regulators to take a hard look at emergency planning zones around existing nuclear plants and seismic standards for all plants.

Overall, however, Rowe downplayed the need for major operational changes at existing reactors.

“There is nothing obvious to us that needs to be changed,” he said.

Rowe said he expects the Department of Energy — which is responsible for the industry’s spent fuel — to pick up part of any increased cost stemming from a regulatory change in spent-fuel management.

“I intend to suggest if something changes in the rules for spent-fuel management, the cost of that should come from the money the industry has already put into the fuel-disposal fund,” Rowe said, adding such a change might require legislation.

Exelon will continue to spend $500 million this year for an ongoing “uprate” program to install equipment at certain reactors to increase the electric output, Rowe said.

Future work involving more costly equipment, will be reevaluated in light of nuclear economics when more is known about any changes related to the Japanese crisis.

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