Nuke companies have a lot to gain

Benjamin Grove

Friday, Jan. 11, 2002 | 11:14 a.m.

WASHINGTON -- Nuclear power companies may see noticeable long-term stock gains after Thursday's announcement by Energy Secretary Spencer Abraham that Yucca Mountain is "scientifically sound and suitable" for a national nuclear waste dump, analysts said.

But stocks have not immediately spiked at the news because savvy investors are familiar with the political, legal, regulatory and waste transportation hurdles that remain for the proposed nuclear waste repository, said David Schanzer, utilities analyst for Janney, Montgomery and Scott.

"I would certainly think that over a period of time, if Yucca Mountain approaches being more of a reality, if in fact it materializes, it will be a beneficial aspect for some companies," Schanzer said.

Schanzer said that if the Yucca project continues to meet important milestones it could even pave the way for new nuclear plants to be constructed in the United States as early as 2006 -- the first new plants commissioned since the late 1970s.

Nuclear power companies on Thursday welcomed the announcement as solid financial news, Prudential Financial Services associate analyst Mike Catanzaro said.

"It provides a real boost to the industry and shows that the administration is behind nuclear power," Catanzaro said. "It answered a big question around the nuclear industry -- what to do with the waste."

Catanzaro predicted President Bush would give the site the green light and that Congress would act quickly mid-year to override official objections filed by of Nevada. "I don't think Congress is as nuclear-phobic as it once was," he said.

Aides to the Senate's leading Yucca advocate, Sen. Frank Murkowski, R-Alaska, declined to say what strategy pro-Yucca lawmakers would use in the narrowly divided Senate to override an official Nevada objection.

But in a written statement, Murkowski said, "Now more than ever the case for Yucca Mountain is clear. Nuclear waste is best kept in a secure, central facility where we can concentrate all of our resources to keep it safe. Without such a repository, waste today is instead kept at sites scattered across the country on our shores and in the midst of our communities."

After two decades of Energy Department research at Yucca, Abraham's action was "the right scientific thing to do," said Joe Colvin, president and CEO of the Nuclear Energy Institute. NEI is the top pro-Yucca lobby and nuclear industry trade group in Washington and for years has prodded presidents and lawmakers to complete Yucca.

"Scientific consensus supports disposal of this material in a facility that provides multiple layers of protection for the public and the environment," Colvin said.

By law, the federal government was supposed to haul waste away from the power plants by 1998. But delays have plagued the Yucca project and plants continue to store waste on-site at great expense.

The Prairie Island nuclear plant in Minnesota is a good example.

The plant produces about 20 percent of the state's electricity. But the plant's waste storage pool is full, and plant operator Xcel Energy is now storing overflow in 14 dry cask containers. State law limits such on-site storage and the plant may be forced to shut down by 2007 if waste cannot be shipped to another state.

"Utilities have had to make significant accommodations to continue running their plants," Prairie Island director of nuclear assets Scott Northard said.

Constellation Energy, which operates two reactors in Maryland, also has filled its waste pools, plus about 60 percent of its dry-cask storage. Ratepayers have paid twice to store waste -- once into a fund to pay for Yucca Mountain and an additional $25 million for the high-security dry-cask bunkers on the plant property, said Constellation spokesman Karl Neddenien.

Abraham's action was "a major milestone in developing a permanent solution to our existing problems," Neddenien said.