Nuclear power at crossroads
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July 31, 1996: 3:23 p.m. ET
Rising plant maintenance costs, deregulation change the business
From Correspondent Allan Dodds Frank
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"Wall Street's clearly putting a premium on companies either that don't have nuclear, or who've got a track record of operating their nuclear plants extremely well."
~ Steve Fleishman, utilities analyst, Merrill Lynch.
By the year 2000, more than half of the nation's reactors will be at least 20 years old. Some experts say the reactors could experience increasing maintenance costs as better technology reveals more potential safety problems.
Deregulation is also changing the economics of the business.
For utilities, this means emphasizing competitiveness, not excess capacity to handle peak loads.
"People are basically going to try to get more output from current plants, they're probably going to delay building new plants for some period of time, and you're going to see electricity move across the country --or at least across regions-- in a more aggressive way than we have in the past," said Marvin Fertel, vice president of nuclear economics at the Nuclear Energy Institute.
Experts say that -- in the absence of an oil or environmental crisis -- the political outlook for new nuclear plants remains bleak. That means utilities could turn to building gas fired generators which require relatively little capital, even though they are more expensive to fuel.
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