[ News Article ]
Duane Morris Partner Rides Second Wave of Nuclear Power
By Meredith Hobbs
August 22, 2007
Fulton County Daily Report
Nuclear power is making a comeback, and Charles W. "Chuck" Whitney is a believer.
Six months ago, Whitney, the Atlanta managing partner of Duane Morris, started a nuclear power practice for the Philadelphia-based firm.
There has not been a contract signed for a new nuclear power plant in the United States in 30 years, but now the time is right, said Whitney, 61, who is a veteran of the Georgia Power team that finally got the Plant Vogtle reactors built in the late 1980s. Costs are down, and concern over global warming means people are looking for alternatives to fossil fuels as power consumption continues to increase, he said.
He said several power plant suppliers and contractors interested in building nuclear power reactors have become clients, but declined to name them.
In the United States, the nuclear power industry was written off as dead around 1987, following the Chernobyl disaster the year before, Whitney said. Chernobyl confirmed many people's fears about the safety of nuclear power in the wake of the 1979 accident at Three Mile Island, where a reactor had a partial core meltdown.
But Whitney said the enormous cost overruns for the last wave of nuclear power plants, not safety fears or anti-nuclear protesters, were what killed off the U.S. nuclear power industry. He spent the latter half of the 1980s getting the Plant Vogtle reactors built amidst massive construction delays and skyrocketing costs, first as a lawyer for Troutman Sanders, then in-house at Georgia Power, which he followed with a decade as an executive for the utility and its parent, the Southern Co.
Times have changed. Last month, Georgia Power received permission from the state Public Service Commission to build two additional nuclear reactors at Vogtle, near Augusta, and is expected to apply for the necessary license from the Nuclear Regulatory Commission.
This year and next, the NRC expects to receive 27 license applications for new nuclear plants.
The last U.S. nuclear power reactor to go online was Watts Bar Unit 1, near Spring City, Tenn., which finally began operation in 1996, almost 23 years after construction started. Security concerns caused delays, and design changes midway ratcheted the cost up to $6.2 billion, making it the most expensive nuclear reactor ever built.
In a sign of the times, the Tennessee Valley Authority decided Aug. 1 to complete Watts Bar Unit 2, which it had abandoned half-built in 1985. The TVA shut down its entire nuclear power program that year amidst runaway costs, safety concerns, whistleblower actions and anti-nuclear protests.
Still, the United States has more nuclear power plants operating -- 104 -- than any other country. Nuclear energy supplies 20 percent of our electricity, a distant second to coal, which supplies about 70 percent. Locally, Georgia Power's energy mix is about the same.
Many other countries have continued investing heavily in nuclear power. China, India, Japan and Finland have been building plants and developing reactor technology, to name a few. The European Union gets 30 percent of its electricity from nuclear power. France, which has very little fossil fuel, relies on the highest proportion, with a whopping 80 percent of its electricity coming from nuclear.
The newer generation of plants is far cheaper to build and safer to operate because of improvements in their technology and manufacturing, Whitney said.
GLOBAL WARMING
Growing worries about global warming have intensified interest in alternatives to fossil fuels, including nuclear. Nuclear power is clean, emitting heat as a byproduct of power generation instead of carbon dioxide the way coal and gas plants do. In addition to greenhouse gases, coal-fired plants produce smog-making nitrogen oxides and particulate matter as well as mercury and sulfur dioxide, which creates acid rain.
"People are concerned. A lot of former nuclear opponents have come out in favor of nuclear power -- not because of the economics but because it makes better environmental sense," Whitney said.
But cost is the trump card for nuclear power, he added.
Time is very big money in building reactors, he said. Since the capital costs are very high, any delays can quickly escalate financing costs, as happened in the 1980s. These days, a reactor can typically be built in a mere four-and-a-half years, according to the Nuclear Energy Agency.
A 1,000-megawatt unit, about the size of the ones at Vogtle, costs $1.5 to $2 billion, compared with about $1.2 billion for the same-size coal-fired plant with scrubbers, Whitney said.
Nuclear plants still cost more to build, but the fuel cost is a lot cheaper. As capital costs continue to decrease, the price per kilowatt hour is approaching that of coal, he said.
In the United States, which has not ratified the Kyoto Protocol, the environmental and health costs of burning carbon are not factored into the price of coal and gas, he added. If the country institutes a carbon tax, it would add a significant cost penalty to burning fossil fuels.
"With feasible design and construction -- and a carbon tax -- it's a no-brainer," he concluded.
Whitney acknowledges the obvious problem with nuclear power -- namely, what to do with the spent fuel. At present, spent fuel rods, which are 18 feet long and two inches across, are stored in underground pools or above-ground casks on reactor sites.
WASTE REPOSITORY NEEDED
"The idea was to keep them there a couple of years until the Feds built the central spent fuel repository that they promised back in 1971," said Whitney. "Can you spell Yucca?"
Yucca Mountain, Nev., the proposed site of the repository, is at least a decade from being operational -- if ever. Whitney noted that anti-nuclear activists strongly oppose a central radioactive waste facility, because they think it's an accident waiting to happen as well as a prime target for terrorists.
To meet the demand for more electricity, nuclear power opponents advocate investing in energy conservation and renewable fuels. To get its proposal for two more nuclear reactors approved by the PSC last month, Georgia Power also included modest plans to increase energy conservation (by encouraging consumers to use low-wattage lightbulbs, insulate water heaters and the like) and produce more power from renewable sources such as solar, wind and biomass.
But the small scale of renewable power plants and their intermittent operation, which depends on the wind blowing or the sun shining, comes nowhere close to meeting the increasing demand for electricity. They can add spot electricity to the power grid, but can't make up the core power supply, Whitney said.
Georgia Power produces 18,000 megawatts of electricity. The Vogtle reactors generate 1,200 megawatts apiece, compared with only perhaps 30 megawatts for a typical renewable plant.
"We need power, and we need big baseload power plants. Nuclear is the best way. It's not perfect, but it's the best of the imperfect choices," Whitney said. "The technology is good. We can think our way into an energy-secure and environmentally sane future -- and it won't be with windmills or dams."
Whitney said he got into nuclear power through "an accident of time and place."
In 1980, he was a third-year associate at Troutman Sanders when he was asked to handle whistleblower complaints for Georgia Power on the Vogtle reactors then under construction. The utility asked him to work exclusively on the problem-plagued Vogtle project in 1984, handling construction issues, just before he became a partner at the firm. Construction had been shut down for design modifications, such as redoing all the wiring, to address safety concerns after Three Mile Island, he said. A couple of years later, he left Troutman Sanders to work directly for Georgia Power on-site at Vogtle. Unit 1 started operating the next year, in 1987, followed by Unit 2 in 1989.
After getting Unit 2 going, Georgia Power stopped building nuclear power plants. Whitney spent another 10 years in senior management for the Southern Co. "I got to refinance all the debt we took on with Vogtle," he said.
In 1998 he returned to lawyering, this time at Jones Day, and a year later he opened the Atlanta office of Duane Morris.
When one of his clients asked if he would be around in 2016 when its planned nuclear plant would be licensed and ready to build, Whitney said no, but it got him thinking.
"If you'd checked in with me in 1989 and asked when the next wave of nuclear plants would start, I would have said, 'When hell freezes over,'" he said. "We never thought we'd do another one of these. All the guys who did them are gone -- retired."
The same is true of the nuclear plant engineers and builders. "Those guys are all in Florida, getting the early-bird special in Naples," he said with a laugh.
By 2016, Whitney also plans to be retired, possibly in Florida, so he started thinking about putting a nuclear group together to handle the coming wave. He's kept his hand in over the years, he said, by working on operating and regulatory enforcement issues for existing plants.
He e-mailed Duane Morris' roughly 650 lawyers to find out if anyone had worked on nuclear plants. "I got 30 or 40 responses. Of those, 10 or 15 guys had driven by a nuclear plant on their way to the courthouse to try another case," he said.
From the rest, he's put a 27-lawyer group together. A lot are in San Francisco, where they litigated construction matters for Bechtel in the last wave of nuclear power. Four are nuclear engineers who do intellectual property work. Almost all of them are in their late 50s to mid-60s.
Whitney is targeting nuclear plant engineers, contractors and equipment providers as clients, explaining that owners like Southern Co. or TVA already have longstanding relationships with law firms.
He said that the only reason he's still around for the second wave of nuclear power is because he rode the first wave when he "was young and in over [his] head." Now he's hoping the same will happen for his firm's younger lawyers.
Reprinted by permission of law.com