Thursday, June 1, 2017

Deregulation and Nuclear Safety:

Understanding the Connection

In the last few years, the deregulation of the electricity markets in the U.S. has proven to have a major impact on utilities and on the nuclear power plants they operate.  It is interesting to look back to the early years of the 21st century, when widespread deregulation of the U.S. electricity markets was in its early stages, to see what the concerns were and how the anticipated spread of deregulation in the electricity markets was being viewed.

While today, we see a major impact of deregulation being the premature shutdown of some operating nuclear power plants, the earliest concerns were mainly the impacts of market deregulation on nuclear power plant safety.  In 2001, the Nuclear Regulatory Commission published a report (NUREG/CR-6735) analyzing the effects of deregulation on other industries in order to help understand the implications of deregulation on safety.  The report focused on the aviation and railroad industries, as well as the nuclear industry in the United Kingdom, all of which had already experienced significant economic and market deregulation.  (This NRC site has a link to the full report, and a press release on the report provides some further summary details.) 

Overall, the study suggested that economic deregulation need not compromise safety.  However, the study cautioned that safety after deregulation cannot be taken for granted.  They noted instances of financial pressures, mergers and acquisitions, increased use of contractors, and downsizing having some level of adverse effects on safety and safety culture. The study also noted that the magnitude and speed of changes can create challenges to the management of safety.  The 2001 study concluded that the review and understanding of the problems in other industries could help identify ways of preventing similar safety problems in the U.S. nuclear power industry.

Fast forward to 2017.  To date, safety of the nuclear power plants has been maintained, despite the fact that the deregulation of the electric power markets has spread, so the issues identified in this study, as well as other efforts to maintain safety in a changing environment, appear to have had a positive impact.

We can also see that the concerns over the effects of deregulation of the electricity marketplace continue.  In fact, if anything, they have broadened.  Today, we are also concerned about the impacts of the premature shutdowns of nuclear power plants on the grid reliability and overall electricity supply.  In light of this, NRC continues to monitor the state of the industry to assure that nuclear safety, as well as decommissioning requirements, can continue to be met