Financial doubts mushroom over nuclear industry

Whatever its outcome, the planned confrontation at the Diablo Canyon nuclear power on the central California coast is just one chapter in a far bigger story: the saga of nuclear power and its uncertain future in the United States.

It remains to be seen whether plans for a human blockade of the power plant, scheduled to begin test operations later this month, will fizzle out for lack of support. But even if the nuclear power industry comes out a clear winner in this latest antinuclear protest, it still faces a bleak future.

Confronted by high interest rates, an unexpected, sharp drop in the growth of demand for electrical power, a lead time of 12 to 15 years to build and license a plant, and a nuclear wariness on the part of many consumers in the wake of the 1979 Three Mile Island accident, utilities across the country have been reluctant to order new nuclear power plants -- and have, in fact, canceled 28 projects between 1978 and 1980, according to the Edison Institute's Electric Power Survey. The cancellation figure given by a nuclear industry body, the Atomic Industrial Froum Inc., was even larger -- 35 plants.

There is, however, a bright spot on the industry's horizon -- an administration in Washington that not only has been highly vocal in its support of nuclear power, but also has put its money where its mouth is. Although President Reagan slashed alternative energy programs, he raised the nuclear development budget from approximately $900 million to $1.3 billion. In addition , the President is committed to hacking away some of the regulatory thicket that sprang up in the wake of Three Mile Island (TMI).

Spokesmen for the nuclear industry argue, too, that the recent plant cancellations and other negative trends are only temporary setbacks.

"In the '80s, orders will resume as common sense prevails and the economy improves," predicts Eugene Gantz, a spokesman for the Atomic Industrial Forum Inc., a 600-member international trade association. "the need is there."

"It's a common mistake to say that nuclear power is finished becuase there've been no orders for nuclear plants [since TMI]," he says. "The fact is, utilities are reluctant to make any orders for plants. That's the fact, and nuclear is just a detail of that fact."

According to the Edison Electric Institute's power survey. 10 coal-fired plants were canceled during the same three-year period that saw the cancellation of 28 nuclear power plants. By comparison, however, 45 new coal-fired plants were ordered during that period, while no orders were placed for nuclear power plants.

The industry's financial dilemma has not been overlooked by antinuclear activists, who have seized upon the slowdown as evidence that nuclear power has no future, in terms of new plants, in the US.

"The fight now is not whether any new plants will be ordered," says Jim Harding, energy director for Friends of the Earth and part of the antinuclear movement for the past nine years. "It's whether those plants under construction or about to be finished will ever operate," he says, referring to the 20 new plants scheduled to be ready for licensing by the end of 1982.Nationwide, 74 nuclear plants are currently under construction, and permits have been issued for five more.

Increasingly, Mr. Harding predicts, the antinuclear battle will be waged at a state instead of a federal level. Although the federal government's Nuclear Regulatory Commission has sole authority to determine issues of nuclear power safety, it cannot interfere with state public utilities commissions (PUCs), which have the right to deny permission to build nuclear power plants on the economic grounds that a plant is not needed by consumers or that it is a risky financial undertaking.

Lobbying efforts aimed at discouraging nuclear power plants at the PUC level include pushing for regulations that require "ratepayer's insurance" (utility guarantees that in the event of any plant accidents, damage costs would be paid by company stockholders and not utility customers) and stipulate that utilities be allowed to pass along to customers only the cost of the original estimate of building a new plant rather than tacking on the substantial cost overruns that frequently occur.

Other efforts include voter intiatives -- such as one on the ballot this November in Washington, D.C. -- that would require voter approval of bond sales of $200 million or more for any new plant generating 250 megawatts or more, a measure that would, in effect, be a public referendum on new nuclear power plants.