By: David Weisman
He wasn’t wearing a red suit or sporting a full white beard, but Santa Claus did drop into Fresno last December. Adopting the more recognizable form of John Hutson, he stepped from his nuclear-powered sleigh, ready to bestow on a downtrodden Fresno a cornucopia of gifts: thousands of jobs, hundreds of millions in tax revenues and vast quantities of electricity and desalinated water. All this generosity would be powered by a French-built nuclear reactor.
It sounds fantastic, but much like the myth of Santa Claus — and the truth that becomes evident to children of a certain age — it is all make-believe.
Announcing that Fresno Nuclear Energy had signed a letter of intent to begin development of a nuclear reactor in the Central Valley, CEO Hutson added that site selection would begin in 2010 and construction of the project might begin by 2017.
There’s only one problem with the plan: California has a moratorium on the building of any new nuclear power plants until there is a proven and demonstrated federal solution for dealing with the high-level radioactive waste. That decision is ultimately made by the California Energy Commission (CEC) and has been reaffirmed with great vehemence in recent months as the only federal option for nuclear waste disposal — the Yucca Mountain site in Nevada — has been pulled from consideration.
This is not Hutson’s first attempt to jump-start his nuclear fantasy. He announced it in 2006 with great fanfare and found an ally in Assemblyman Chuck DeVore (R–Orange County). DeVore tried twice to use the California legislature to overturn the state’s moratorium on nuclear power, but both bills failed to leave committee. DeVore then considered a craftily worded ballot initiative, but when the attorney general translated it into language the public would understand, DeVore’s own polling on the issue caused him to withdraw the measure. The project seemed dead on arrival until this Christmas surprise.
There are a number of reasons why this reactor project is a questionable enterprise. Of his chosen partner, Areva Nuclear of France, Hutson says, “They’re the largest builder of nuclear power plants in the world…For them to want to sign with us is a pretty big deal.”
Pragmatically, the monopolistic French vendor has had little success building its first example of the “next-generation” European pressurized reactor that it is offering to Fresno. Currently, the two under construction are suffering from massive construction delays and ballooning budgets.
To promote its flagship project, the Olkiluoto Reactor in Finland, Areva offered a fixed-price bid to the Finnish utility. Grossly underestimating the supply chain, workforce issues and the fastidiousness of the Finnish regulators, the project is now at least three years behind schedule and almost $3 billion over budget — nearly double the original estimate.
As World Nuclear News reported on September 1, 2009, “Yesterday the Paris-based company said it has put aside an extra €550 million ($782 million) and now expects a result of negative €2.3 billion ($3.2 billion) once the reactor is complete.”
The Financial Times simultaneously reported that Anne Lauvergeon, the Areva chief executive, said that “it was impossible to determine the final cost of the Finnish project, raising concerns that there could be more charges to come. The project, originally due to come on line in 2009, is already three years behind schedule.”
According to Reuters, “The French oil company, Total, has opted not to invest in Areva after the French nuclear company lost a bid to build two new reactors in Abu Dhabi, United Arab Emirates. Total’s director general also questioned whether it was possible to make the EPR — Areva’s flagship new reactor — less expensive without compromising safety.” That’s the real question.
The economics of the proposal also have a fantasy-like aura. In his press release, Hutson estimates the cost of his Fresno reactor at a mere $5.5 billion. It would make the Fresno nuke cheaper than the yet-to-be-completed Areva project in Finland. There are no details on the derivation of this number or a cost per kilowatt hour of its product. This price also bears no resemblance to the estimates of other proposed nuclear projects in the United States.
In December, it was revealed that City Public Services of San Antonio, which was negotiating to build a new, similarly sized Toshiba reactor on the Texas coast, had received a “lowball” bid. Originally estimated at $12 billion (or double Hutson’s guess), the true price was leaked to the press before the City Council was scheduled to vote on approving the project. At a revised cost of $16 billion, not only has the city bowed out but there were also resignations and firings within the utility. According to the San Antonio Business Journal (January 4, 2010), the utility “is seeking actual and exemplary damages of $32 billion” from the project sponsors.
Given Fresno’s current fiscal predicament, these are controversies the city could ill afford. In short, Fresno has no idea if its residents — the hundreds of thousands who won’t have the good paying jobs at the nuclear plant — will be able to afford the electricity it generates.
Veterans of the Central Valley may have a bit of déjà vu: Back in the 1970s, a coalition of farmers, labor and concerned citizens joined to fight the very real threat of the San Joaquin Nuclear Power Plant proposed by the Los Angeles Department of Water and Power.
At the heart of that dispute was the right to water — the most precious resource. Nuclear power plants need lots of water to keep them cool, and in September 2007 Hutson received exclusive permission from the Fresno City Council to begin studying the suitability of the city’s wastewater resource for cooling. Those tests were supposed to take four years but are not mentioned in the recent press releases.
In August 2008, the Fresno Bee reported that “Fresno Nuclear Energy Group LLC on Tuesday signed a letter of intent with the Westlands Water District to discuss the possibility of building two 1,600-megawatt nuclear power plants on 500 acres in the district.”
As Hutson is unlikely to attract any private financing for his reactor, and the existing government loan guarantees have already been doled out to others, one can only speculate about his intentions for the exclusive rights he received for a piece of the city’s water supply.
Finally, what is Hutson’s commitment to the project? For example, the Web site, www.fresnonuclearenergy.com, has not been updated in three years. Even the latest press release promoting the Areva agreement does not appear there. Why would a multi-billion dollar international corporation become involved with an entrepreneur who is unable to maintain something as simple as a modern Web site?
If Fresno’s future were truly of concern to Hutson — as it should be to Fresno’s leaders — he would be working to attract world-class development in solar energy and take maximum advantage of the Valley’s most abundant and consistent natural resource. And the nuclear fantasies could be tossed back into Santa’s sleigh along with other quaint — and less risky — childhood illusions.
David Weisman is the outreach consultant for the Alliance for Nuclear Responsibility (www.a4nr.org).