Special Subcommittee on Energy


Minutes of the<MeetNo1> 5th Meeting

of the 2015 Interim


<MeetMDY1> October 16, 2015


Call to Order and Roll Call

The<MeetNo2> 5th meeting of the Special Subcommittee on Energy was held on<Day> Friday,<MeetMDY2> October 16, 2015, at<MeetTime> 9:00 AM EST at the Emerging Technology Center, West Kentucky Community and Technical College, Paducah, Kentucky<Room>. Representative Gerald Watkins, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Gerald Watkins, Co-Chair; Senators Dorsey Ridley, Brandon Smith, and Robin L. Webb; Representatives Tim Couch, Will Coursey, Jim Gooch Jr., Martha Jane King, Jerry T. Miller, Tom Riner, Dean Schamore, and Brent Yonts.


Guests: Senator Danny Carroll; Representative Richard Heath; Dr. Barbara M. Veazy, President of the West Kentucky Community and Technical College; Bob Leeper, McCracken County Judge Executive; Gayle Kaler, Mayor of Paducah; Donald Shively, Superintendent of the Paducah Public School System; Casey Allen, Superintendent of the Ballard County School System; Sandra Wilson, President of the Paducah Area Chamber of Commerce and Paducah City Commissioner; and Matthew Crozat, Senior Director for Business Policy, Nuclear Energy Institute.


LRC Staff: D. Todd Littlefield, Janine Coy-Geeslin, and Susan Spoonamore, Committee Assistant.


Representative Gerald Watkins stated that he has been a part of the West Kentucky Community and Technical College (WKCTC) for 25 years. WKCTC has finished in the top 10 out of 1,200 two-year community colleges in the United States, and last year WKCTC finished second.


Dr. Barbara M. Veazy, President of the West Kentucky Community and Technical College, said the Emerging Technology Center has allowed the community to move forward with partnerships in industries and in the recruitment of business. As part of the build smart project, the Paducah School of Design will open in 2016.


McCracken County Judge Executive Bob Leeper welcomed everyone to the meeting. The closure of the Paducah Uranium Enrichment facility is in the clean-up phase, which members will see on the tour.


Economic Outlook for the Nuclear Industry

Matthew Crozat, Senior Director for Business Policy, Nuclear Energy Institute (NEI), explained that his job consists of overseeing economic analyses and works on market policy issues as it effects the nuclear industry. Prior to joining NEI, Mr. Crozat spent 9 years at the Department of Energy (DOE). His last position with DOE was Senior Policy Advisor in the Office of Nuclear Energy. Mr. Crozat presented information on the current status of the nuclear industry, technology, and issues for the Commonwealth.


Nuclear power provides 19 percent of the electricity in the U.S. We have 99 nuclear reactors in the U.S. fleet. There are 5 reactors under construction today with the first of these expected to come on line later this year – not too far from here in Tennessee. Nuclear power provides 24/7 electricity. These plants were originally licensed to operate for 40 years, but over three-quarters of the reactors have received license renewals to operate another 20. Most of the remaining plants either have or are in the process of seeking renewals or will begin that soon. Some of the units are even looking at subsequent license renewals to operate beyond 60 years.


Mr. Crozat stated that nuclear power plants are anchors of regional economies. During construction, employment at the site will be approximately 3,500 people. Once the plant is operational each reactor will require between 400 and 700 employees to run the plant regularly. The average salary at nuclear plants is about 35 percent higher than the areas in which they operate. Mr. Crozat presented an example of the Davis-Besse plant in Oak Harbor, Ohio on Lake Erie. There are 700 employees working directly at the site. But the economic activity produced by those employees in the operation of the plant supports another 2,500 jobs in the county itself and another 2,100 in industries across Ohio. The economic output – the value of that effort is on the order of $800 million dollars a year plus another $1.1 billion or so for the rest of the state. Mr. Crozat represented that these plants are important generators of economic activity within the regions they operate.


Mr. Crozat spoke about the economic, technological, and policy issues faced by the nuclear industry. Because of improved technology in hydraulic fracturing, competitive production of has changed how the electricity sector operates. Incentives for the deployment of renewable technologies have led to increased supply and depressing market prices as well. These issues will not likely impact Kentucky because Kentucky’s system follows a long-term planning for the infrastructure needs of the state rather than responding to the short-term market pressures.


Safety is a big concern for the nuclear industry. There are layers upon layers of safety barriers – physically separated safety systems overseen by a Nuclear Regulatory Commission (NRC), which is an independent agency of the U.S. Government. NRC sets the standards and conducts the inspections to make sure that these standards are being met. Mr. Crozat said the nuclear industry sees safety as the great hallmark of success in the U.S. nuclear industry, and the strong safety record speaks to the safety culture throughout the workforce. Having operated the Paducah Gaseous Diffusion Plant for so long, this safety culture is understood by the workforce in Paducah.


There are new reactors being built in the United States and abroad, such as Finland, France, and the United Kingdom. Mr. Crozat spoke about how small modular reactors are changing the paradigm for the manufacturing industry. These modular concepts have the potential for increased manufacturing and decreased construction time. He mentioned Babcock and Wilcox in Indiana and NuScale in Oregon. You can put several small modular reactors now and add more power later.


Mr. Crozat spoke about fuel cycles and how spent fuel is stored currently. Fuel cycles for the nuclear plants tend to run on 18 or 24 month cycles. Approximately, one-third of the fuel in a reactor will be removed every year and a half to two years. Used or spent fuel is hot and radioactive, so it is stored cooling pools at the reactor site. Cooling pools are built with reinforced concrete and stainless steel linings with no drains anywhere. The spent fuel will stay in these pools for about at least 10 years while it cools down. After 10 years, the fuel rods are usually put in dry cask storage, and the air continues to cool them in concrete and steel lined containers on site.


Originally, the federal government was to bear responsibility for the long-term management and disposal of used fuel. Every company who owns a nuclear plant has a contract with the federal government. For every kilowatt hour produced, owners would pay a fee, and in return the government will bear the responsibility for the long-term management and disposal of spent fuel. This plan was supposed to begin in 1998.


In 1987, DOE was directed to focus their attention on a geologic repository at Yucca Mountain in Nevada. In 2008, DOE submitted a license application to the NCR to move forward with the repository. Two years later the Obama administration decided that they wanted to abandon the licensing effort declaring the situation to be unworkable. The Blue Ribbon Commission of eminent scholars, businessmen and political figures was established to look at the idea of how the government should go about managing its program. And it came back with a number of suggestions. However, Congress has not agreed on management of spent fuel. The nuclear storage fund is approximately $35 billion dollars, and about one billion dollars per year is added in interest. Mr. Crozat said the nuclear industry is confident that the federal government will resolve its political issues and fulfill its responsibilities to remove and dispose of used fuel.


The U.S. Department of Energy’s Energy Information Administration forecasts its energy expectations and predicts about 10 percent growth in nuclear power over the next 10 years, 40 years, 25 years. Mr. Crozat said that if there are emission constraints under the Clean Power Plan nuclear power would provide headroom for coal to remain a key part of electricity infrastructure. He offered that nuclear could provide the emissions credits that would allow coal to operate as part of a diverse portfolio of electricity generation. He sees nuclear and coal as complementary pieces of a strategy for Kentucky’s future.


In response to Representative Jerry Miller, Mr. Crozat said the cost per kilowatt hour between nuclear and coal was 10 cents. Natural gas is closer to 6 - 8 cents per kilowatt hour and renewables would cost 8 – 12 cents per kilowatt hour depending on location. Mr. Crozat said the prices are gross but change considerably after subsidies.


In response to Representative Tom Riner, Mr. Crozat said security has become an area of intense focus since 911. He said that security staff, at nuclear plants, is now the largest class of employees at the facilities. In the wake of 911, the nuclear industry has been and is required to demonstrate to the NRC that the plants could withstand the impact of an aircraft. The facilities themselves are hardened in a way that very few structures in the world are. The opportunity for intruders to get close and or for projectiles has been a significant aspect of investment and concern. Mr. Crozat noted Representative Riner’s concerns and said he would provide more information to Representative Riner regarding safety and security.


In response to Representative Jim Gooch, Mr. Crozat stated that there is no data on job implications for modular units. One thing to consider would be the opportunity for some of the manufacturing to be done regionally.


Representative Gooch stated that if the construction of modular units was being considered for Kentucky, it might be easier to look at lifting the moratorium.


In response to Representative Martha Jane King, Mr. Crozat said explained that support for nuclear power tends to be highest in the immediate area round nuclear power plants. For those who do not work at a nuclear plant, they would probably be surprised that the employees do not consider it a risk. He said that the health effects experienced from Fukushomia and 3 Mile Island were not as dramatic as portrayed. The 3 Mile Island event might have contributed to maybe two extra cancers in the entire population. Mr. Crozat said the United Nations expected no premature deaths from the radiation released at Fukushima. It is agreed that Fukushima was a disaster that should never have happened.  


In response to Representative Dean Schamore, Mr. Crozat said that seismic concerns is a significant aspect of nuclear regulatory safety review. Unless there is confidence that the technology and construction would enable the facility to withstand an earthquake, then there would be no construction of a nuclear plant. Mr. Crozat explained that South Carolina and Georgia are in the process of building of what is called “Twin AP1000” nuclear reactors. There are two units and each can produce 1,100 megawatts. The smaller units have different configurations. Some designs go from 140 megawatts up to 220 megawatts. The new scale of modular units will allow you to put 6 to 12 units in the same plant and run as a complete set – each one producing 50 megawatts. Depending on how forward the industry goes, it could reach 1 to 3 gigawatts.


In response to Senator Danny Carroll, Mr. Crozat stated that coal and nuclear do complement each other. Coal provides the largest share of electricity generation in the United States, and nuclear power provides 20 percent. He said that the Environmental Protection Agency’s (EPA) rule regarding nuclear and new nuclear construction would allow those plants to generate emissions for credits. Those credits could be sold to provide other generation technology that has emissions. That would be create a chance for coal and nuclear to work together. Mr. Crozat also said that it could be possible to leave some of the coal plants in place since they have similar infrastructure that would be required for small modular reactors which would provide opportunities for maintaining power plants with different technologies. The removal of the moratorium would allow for those opportunities.


In response to Senator Robin Webb, Mr. Crozat said that he had not had the opportunity yet to research Minnesota’s review of lifting their moratorium. He would look into it and get back with Senator Webb. He said that the states who have regulatory protocol in place such as economic incentives allowing for reduction of costs during construction would be considered. He said that NRC, through their regional offices, can do inspections of individual sites. Many states have what they call “state compacts” that allow the NRC to help provide oversight. There is a need for each state to determine its needs in terms of oversight and independence.


Chairman Gerald Watkins stated that people in Paducah were very comfortable with nuclear power. Over the years, the plants have provided a lot of high paying jobs in the McCracken County area.


There being no further business, the meeting was adjourned.