SAN FRANCISCO -- Conventional wisdom says California is a lousy place to bet on new nuclear power.
In Berkeley, the city government won't buy services of any kind from a company that refuses to sign a "nuclear free" disclosure. In Sacramento, a moratorium against new reactor construction has held since 1976. And statewide, energy developers have a hard enough time securing permits for massive power plants run by renewable energy, much less finding enough political daylight to launch a multibillion-dollar nuclear project.
The reality is California has become a kind of a nuclear junkyard, with reactors in Rancho Seco, San Onofre and Humboldt County shuttered before their prime over the past three decades, as momentum behind discontinuing the power source persisted in the wake of the 1976 ban. Today, two nuclear stations are operating in a state nearing 40 million residents.
But an outsider is challenging conventional thought.
Areva SA, a power developer whose majority shareholder is the French government, launched what might seem like a fantastical pursuit last month in signing an agreement with the Fresno Nuclear Energy Group to build new reactors in California's Central Valley.
The idea behind the pact, which was promoted as a letter of intent, is to start the political drumbeat behind ending the 1976 moratorium. To the Areva executives behind the arrangement, a thaw in that ban is inevitable because California has no other choice.
"It makes sense for California to reconsider its moratorium," said Jared Adams, an Areva spokesman based in Charlotte, N.C. "When you look at the need to cut carbon emissions, and California is in the lead in that department, you have to consider nuclear power."
Adams said renewables like solar and wind will only get California so far. The state has a climate law on the books, A.B. 32, that goes into full effect in two years that aims at cutting greenhouse gas emissions to 1990 levels by 2020. To get there, and to the more stringent 2050 targets, Areva and the Fresno group insist California will have to replace thousands of megawatts in baseload power now generated by coal-fired facilities in Wyoming and other nearby states.
"What they need is baseload, a baseload source of power," said Adams, noting that solar and wind account for about 3 percent of California's total power load. "It's the eighth largest economy in the world, after all."
But others think Areva's gambit is as uninformed as it is aggressive. The moratorium, they argue, is as unbending as ever. That is because the law ties new nuclear power construction to the federal government establishing a means to either dispose or reprocess the nuclear waste that is currently housed in more than 100 locations across the United States. To change that standard, the California Legislature, which is dominated by Democrats, would have to intervene.
And as any observer of the nuclear waste debate will tell you, Congress is no closer to building a nuclear repository -- in Yucca Mountain, Nev., or elsewhere -- today than it was 20 years ago. That means California is predisposed to have a simple answer for Areva: No thanks.
"Until the waste issue is resolved or there is a change in the moratorium, nuclear facilities cannot be considered," said Susanne Garfield of the California Energy Commission.
Not 'country bumpkins'
Even so, those close to the process in Sacramento appear to regard the Areva attempt to break the ice as the most serious effort in years, if not decades.
Jim Metropulos, a veteran legislative expert at Sierra Club California, said the Areva pact with the Fresno group, under which the parties agreed to work together to bring the company's "European pressurized reactor," or EPR, to market, is well-organized and genuine.
The EPR technology is built and marketed for a new generation of nuclear potential and insecurities. For one, it employs a double-layer concrete dome to protect against a terrorist attack. And Areva insists it is far safer and more economical than reactors built in the past century.
Moreover, the Fresno group, which is led by a connected Central Valley utility commissioner, John Hutson, is well-financed and appears intent on attacking the political challenge from the ground up. The investment group, according to sources, has enlisted B.B. Blevins, a former executive director at the California Energy Commission and appointee of Gov. Arnold Schwarzenegger's (R), to help navigate the state government and lobby on its behalf.
To Metropulos, this means interest groups aligned against nuclear power (which is Sierra Club California's official position) should heed the Areva agreement as something to be taken seriously, despite the entrenched political reality.
"I don't think these people are country bumpkins as some people in the media have portrayed them, or even rabid pro-nuclear people," Metropulos said in a phone interview. "I certainly believe that the Fresno group is very serious, and maybe they have a chance regardless of the law in California."
Dan Kammen, a professor of energy at University of California, Berkeley, agrees. He said Areva could be placing its bet at just the right time, and not just in California. Just as likely is serving the largest state in the West with nuclear sources through neighboring states.
"There is certainly a chance that the legal prohibition will be lifted," said Kammen, who advised President Obama on energy policy during the 2008 campaign. "It is also important to consider the potential for 'nuclear by wire.' Just as California imports coal and hydro power from out of state, the prospects for nuclear power to be imported via transmission is also a candidate that industrial groups are exploring."
Areva's sales pitch -- that nuclear would help California meet its climate goals -- is hard to counter, Metropulos admits, because the consequences of nuclear fission (i.e., radioactive waste) are not as apparent to the average consumer as the carbon emitted from a typical coal-fired power plant. And others who support the effort are bound to argue that decentralized waste storage is hardly a perfect solution.
"This situation [in California] is pretty grim without some source of new power," said C. William Ibbs, a professor of civil engineering at University of California, Berkeley. "We have 104 nuclear power plants operating in the United States, and each of them is storing their waste at a local site. You can't tell me that's safer."
Daylight in Sacramento?
Still, Metropulos believes that Californians, who have been trending toward supporting new nuclear projects in recent polls, have a long memory and won't forget accidents like Three Mile Island or the waste problem. He suspects those memories would reappear if a fledgling idea to put the nuclear question on the statewide ballot in November gains momentum in the months ahead.
"The process still involves nuclear waste, and we're even farther away under an Obama administration from having a repository," Metropulos said. "People have a long memory of some of the problems with nuclear, so it's not a slam dunk."
In Sacramento, several lawmakers have tried and failed in recent years to end the moratorium. The most recent attempt came from Assemblyman Chuck DeVore, a Republican who is running for his party's nomination to unseat U.S. Sen. Barbara Boxer (D) in November.
DeVore ditched a campaign to put the moratorium on the statewide ballot in November 2007, several months after a bill he had drafted failed to get out of the Assembly's Natural Resources Committee. He tried again last year, but with Democrats still in control, that attempt also fell short at the committee level.
A DeVore aide said the assemblyman has no plans to bring it back this year. A ballot measure, however, is not out of the question.
Ibbs, who has worked as a consultant for Areva and supports ending the ban, said he would advise the Fresno group to wait and make its case before the state Legislature, not through the ballot initiative process. But Ibbs made that point on principle, admitting the ballot measure could turn in quicker results.
"We've got so many referenda on the ballot that it really leads to confused government," Ibbs said. "I'd rather the Legislature take the lead on this. I think they would come up with a more comprehensive and intelligent position."
And the waste problem? "It certainly is a 'Catch-22' situation," Ibbs said.
Areva's global ambition
As Kammen pointed out, Paris-based Areva has not limited its sights to California.
The company is also talking to officials in Arizona and is working with Duke Energy Corp. on plans for building a massive 1,600-megawatt nuclear station in Piketon, Ohio. Other U.S. companies, including Constellation Energy Group Inc., PPL Corp. and Ameren Corp., have also expressed an interest in developing EPR reactors.
Farther afield, Areva has moved closer to completing its first EPR projects in Olkiluoto, Finland. But that project has run into severe cost overruns and delays, prompting some critics to question whether the French firm has the goods to bring the new reactors online.
The cost of the Finnish project, according to the Financial Times, has soared to €5.3 billion, from an original estimate of €3 billion. And the project is more than three years behind schedule.
John Geesman, a former commissioner at CEC, said the delays and financial trouble have spotlighted the risk of financing nuclear power projects. Executives like Duke Energy CEO Jim Rogers, he said, have taken note and continue to push for high-cost loan guarantees in Congress to spur the industry.
To Geesman, that policy debate -- which has been playing out in the context of federal climate legislation -- is the key issue when it comes to the possibility of building new nuclear power. Without federal financing, the industry could be stuck in the United States, California moratorium or not.
"So the role to be played by Areva, which is 91 percent owned by the French government, in the U.S. nuclear renaissance is still to be determined," Geesman wrote recently on his blog "Green Energy War." "But the role of the American taxpayer may be coming into focus."
Correction: Metropulos' name was misspelled in an earlier version.