Money to shut nuclear plants falls short

Companies that run more than half of the nation's 104 nuclear reactors are not saving enough to pay for their dismantling and removal of radioactive materials when they stop operating, according to documents and interviews.

The companies that own almost half the nation's nuclear reactors are not setting aside enough money to dismantle them, and many may sit idle for decades and pose safety and security risks as a result, an Associated Press investigation has found.

The shortfalls are caused not by fluctuating appetites for nuclear power but by the stock market and other investments, which have suffered huge losses over the past year and devastated the plants' savings, and by the soaring costs of decommissioning.

At 19 nuclear plants, owners have won approval to idle reactors for as long as 60 years, presumably enough time to allow investments to recover and eventually pay for dismantling the plants and removing radioactive material.

But mothballing nuclear reactors or shutting them down inadequately presents the most severe of risks. Radioactive waste could leak from abandoned plants into ground water or released into the air, and spent nuclear fuel rods could be stolen by terrorists.

During the past two years, estimates of dismantling costs have soared by more than $4.6 billion because rising energy and labor costs, while the investment funds that are supposed to pay for shutting plants down have lost $4.4 billion in the battered stock market.

Not saving enough
The power companies have been hammered by the same declining market returns as colleges, companies and private investors. Industry critics say reactor owners weren't saving enough even before the financial collapse, and that federal regulators have not held the industry to a high enough standard.

Federal regulators are expected to release a report later this week that will describe shortfalls at 30 of the nation's 104 nuclear plants and ask operators for details about how they plan to resolve the problem.

The amount of money set aside for dismantling the plants has decreased at nearly four of every five reactors, according to an AP analysis of financial records provided every other year to the Nuclear Regulatory Commission. The government could force plant operators to set aside more money.

Plant owners say they have several ways to close the gap. In addition to idling the plants, the government can simply extend licenses to operate them. And investments could recover in the years to come. Industry officials say a 6 percent annual rate of return is a reasonable long-term goal.

Most nuclear plants will be operating for several more decades and will be able to recoup their fund losses, said Steve Kerekes, a spokesman for the Nuclear Energy Institute, a trade group.

'The funds are inadequate'
Nuclear power critics say those plans are not enough.

"No one at the NRC wants to acknowledge what is absolutely obvious to us, that the funds are inadequate and that the industry has bare assets," said Arnold Gundersen, a retired nuclear engineer and decommissioning expert.

Those critics say the industry is making assumptions about their investments that do not account for another market collapse, political obstacles to getting the licenses renewed and unforeseen safety problems that could make nuclear power less palatable.

Last week, British officials reported on a 2007 leak in a cooling tank at the decommissioned Sizewell-A nuclear plant. If the leak had not been promptly discovered, officials said, nuclear fuel rods could have caught fire and sent airborne radioactive waste along the English coast, harming plant operators or the public.

The average cost of dismantling a nuclear reactor is now estimated now at $450 million. The average plant owner has about $300 million saved up for the job. Typically, the money is raised through a small surcharge on electric rates.