Public Policy

Chairman Barton, Ranking Member Boucher and distinguished members of the Energy and Air Quality Subcommittee, my name is Randy Hutchinson. I am the Senior Vice President for Nuclear Business Development for Entergy Nuclear. 

Entergy is a large electric utility with 2.5 million customers in Arkansas, Mississippi, Louisiana and Texas, has more than 30,000 megawatts of generating capacity, and is a large national nuclear operator.

We’re seeing a nuclear renaissance for three reasons:

First, performance of the nation’s nuclear plants has improved dramatically. Plants have continued to operate safely. Capacity factors have improved from approximately 65 percent in the late 1980s to about 90 percent today. That increase in output from the 1990s to today is equal to adding twenty-three 1,000-megawatt nuclear plants to the nation’s power grid — enough to meet about 30 percent of the growth in demand during that period.

Consolidation in the industry is resulting in fewer and larger nuclear operators with far greater nuclear management focus and expertise. Five years ago, 46 operators operated the nation’s 103 nuclear plants. Today 24 operators do.

It is like buying a mutual fund — you can benefit from highly focused management and sharing of talent and expertise.

The second reason for the nuclear renaissance is higher natural gas prices. Nuclear’s production costs dropped to a record low in 1999 of 1.8 cents a kilowatthour, compared to 2 cents for coal, and 3-5 cents for oil and gas. Nuclear provides a hedge against large price swings in gas and oil.

Third, the environmental benefits of nuclear energy are being recognized. Nuclear does not produce any greenhouse gases, or any combustion pollutants.

The bottom line is the nation’s 103 nuclear plants are producing 22 percent of the electric power needed in this country in a safe, low cost and environmentally responsible manner.

What is the future of nuclear power? We are likely to see continued volatility in oil and gas prices. Nuclear provides an important diversity in our nation’s mix. So we are likely to see nuclear power plants around for a long time. Some things are in place to help ensure this.

The Nuclear Regulatory Commission has established a license renewal process to provide a mechanism for extending the license of existing plants for up to another 20 years. Several plants are now doing this. We have one of our plants in the license extension pipeline. The owners of two thirds of the operating nuclear plants today have indicated they intend to apply for license extension. This will help to ensure this important source of electric generation remains available for the future.

This is where you, as the nation’s policymakers, can help. It is critically important that this license renewal process remain in place, adequately funded, and continue to function in an effective and timely manner to act on these license renewal applications.

Will new nuclear plants be built? Yes, we think so. But only if and when we can bring some certainty to the industry. Several factors are pointing to some optimism:

1. Standard light water reactor designs have been reviewed and approved by the NRC, and are on the shelf.
2. The NRC has developed and has in place a new alternative licensing process for new plants, contained within 10 CFR Part 52.
3. An industry task force has been formed and is working to identify and recommend solutions to issues that would have to be resolved for the industry to move forward with new plant construction. Some issues are likely to be:
   • Confidence and certainty that the regulatory review process will be timely, efficient and dependable.
   • Confidence and certainty that a new plant can be built with a “time to market” of 36 to 42 months and at construction costs in the $1,000 per kilowatt range, to compete with natural gas at $4 to $5 per million BTUs (or million cubic feet).

We all look forward to the Department of Energy’s recommendation of the Yucca Mountain fuel repository and the President’s approval later this year.

No other source of electricity can provide large amounts of power reliably and at reasonable costs while enhancing our air quality.  With your help, nuclear will continue to be critical part of our nation’s energy mix. I assure you, nuclear will respond with safe, reliable and low cost energy. Today, and in the future.

I hope you find this information helpful. Thank you for inviting me today.