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Economics 101, Real-World Events Belie Public Citizen’s Claims About Nuclear Energy's Competitiveness

WASHINGTON—Simple economics and real-world business and political developments belie new claims from an anti-nuclear group about the future competitiveness of nuclear power, the Nuclear Energy Institute (NEI) said today.

Contrary to Public Citizen conjecture that deregulation of the electric utility industry could cause nearly all nuclear power plants to close prematurely, competition offers tremendous incentives to extend the operating licenses of nuclear plants, said NEI Senior Vice President Marvin Fertel.

"In a deregulated environment, with the rate base eliminated, earnings will be based solely on the difference between a plant's going-forward costs and the market price of power. Fully depreciated plants will have enormous earnings potential and, for well-run, efficient nuclear power plants, the profits could be handsome. In fact, many utilities will extend nuclear plant licenses for another 20 years," Fertel said.

Baltimore Gas & Electric Co. and Duke Power Co. already have filed license renewal applications with the Nuclear Regulatory Commission (NRC) to extend operations at five units. Entergy Corp. has announced plans to seek a license extension for one of its units this December. Several other utilities already have notified the NRC they likely will seek to renew operating licenses within the next few years.

"The difference between the anti-nuclear conjecture and the events that actually are taking place as deregulation unfolds could not be more striking," Fertel said.

As the nation's need for additional electric generating capacity increases, basic economics will prove Public Citizen's new projections wrong, Fertel said. The estimated cost of nuclear power plant license renewal is $10 to $50 per kilowatt. The cost of building the closest non-nuclear alternative comes in around $440 per kilowatt.

"The math speaks for itself, even before one factors in nuclear energy's value as our nation's largest source of emission-free electricity," he said. "Policymakers on all levels-including the financial community-recognize that nuclear energy's value relative to other electricity sources is increasing in a competitive environment."

Low operating costs at nuclear power plants-dozens of the industry's 103 operating units produce electricity for less than two cents per kilowatt-hour-provide utilities with a financial incentive to run their nuclear units even if they do not fully recover the investment costs associated with construction of the plant, Fertel said. Great Britain's experience with deregulation shows that nuclear power plants can thrive in a competitive setting, he added.

Critics' claims about decommissioning funding shortfalls are similarly baseless, Fertel said.

"Decommissioning is a public health and safety priority, and the Nuclear Regulatory Commission, among others, will see to it that decommissioning is fully funded." He added that states are responsibly addressing decommissioning funding as part of deregulation and investment cost recovery. He said the industry is confident that federal restructuring legislation properly will address the issue as well.


The Nuclear Energy Institute is the nuclear energy industry’s policy organization. This news release and additional information about nuclear energy are available on NEI’s Internet site at