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 pleas.¹

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 order.

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.

Notes:

1. The Chicago Tribune, Problems Keep Piling on for ComEd, June 39, 1998
2. U.S. Department of Energy, Annual energy Review 1996
3. The New York Times. Government Planning to Privatize Uranium Enrichment Operations, June 30, 1998