Former federal regulator: Plans for Fermi 3 nuclear reactor could lead to job loss

Construction of a new nuclear power plant in Michigan could cost the state jobs, according to Peter Bradford, a former Nuclear Regulatory Commissioner who toured the state last month.

“No state has ever succeeded in improving its jobs picture by building unnecessarily expensive power plants,“ he said in a phone interview. “The reason is the impact of high rates on the customers in commercial and industrial class.”

Branford, who served on the NRC from 1977-82, now teaches at Vermont Law School and serves as vice chairman of board of the Union of Concerned Scientists.

During his visit to Michigan, which was arranged by groups that oppose plans by DTE Energy to build a new nuclear reactor at it’s Fermi complex in Monroe County’s Frenchtown Township, Branford testified before the State Senate’s Energy Committee and gave a presentation to a community group in Monroe. His message centered around the economic dangers of new nuclear development.

While there is much focus on the potential construction jobs associated with new plant construction, the benefits from these jobs would be dwarfed by the overall negative impact on the local economy.

Bradford pointed to recent events in Missouri as “practical proof” that new nuclear plants are not in the interest of industry. Last week the AmerenUE company, which already operates one nuclear plant near the state capital in Jefferson City, canceled its plans to build a second when the Missouri legislature refused to pass a law that would have allowed company to pass on construction costs to ratepayers.

According to the St. Louis Post Dispatch, the project was dropped after large industrial customers including Noranda Aluminum, Anheuser Busch-InBev and Monsanto joined with AARP to successfully oppose the legislation.

Michigan law already allows utilities to pass on construction costs to ratepayers.

If DTE is able to get a “certificate of need” from the state’s public service commission, it can pass on the financing costs of the new nuclear plant before it is completed, according to Michigan Public Service Commission spokeswoman Judy Palnau.

And once the plant is constructed and ready to be used, DTE could pass on the full cost of the plant to ratepayers. There is no limit to how high the rates could go.

Critics of new nuclear power say this is an unacceptable burden and risk for Michigan ratepayers.

David Wright of the Ann Arbor-based Ecology Center points out that financing costs could amount to between a quarter and half of the price of the multi-billion dollar construction project .

Plus, with Nevada’s Yucca Mountain nuclear waste disposal site facing continued opposition locally and by the Silver State’s lawmakers in the nation’s capital, it appears that radioactive waste from Fermi’s spent nuclear fuel would have to be stored on site, which sits on the edge of Lake Erie.

“How can you estimate the cost of something when you don’t know how you are going to dispose of the waste?” Wright asked.

It’s unclear whether a new plant would be deemed necessary by the Public Service Commission. Michigan electricity use is declining as industry decreases, and state energy efficiency measures enacted last year could further reduce demand. Last week the chairman of the Federal Energy Regulatory Commission, Jon Wellinghoff told reporters at a U.S. Energy Association forum that the United States may never need another nuclear or coal plant.

“In the near term, nuclear power is likely to be one of the more expensive options for getting electric power,” said Greg White, a liaison with the Department of Energy, Labor and Economic Growth.

“Our policy in Michigan is to try and find the lowest-cost options first.”

In addition, he said, some of those lowest-cost options also deliver other benefits such as positive environmental effects and local manufacturing jobs.

Generally speaking, energy efficiency programs will reduce electric rates and renewable energy projects will stabilize rates, but, White added: “One of the challenges we face is that almost anything we do is going to have, in the near term, a cost increase.”

White said that before the Public Service Commission will grant a certificate of need for any new power project, it will evaluate whether the project is the most cost-effective manner of meeting the states power needs.

“If a company can get that certificate of need,“ he said, “… I think the public should have a high degree of confidence that this plant was actually needed.”