Public Policy

This testimony regarding consideration of Assembly Bill 555 by the Wisconsin State Assembly Committee on Energy and Utilities is submitted by the Nuclear Energy Institute (NEI), the Washington, D.C.-based policy organization for the nuclear energy industry, on behalf of more than 250 corporate and other members engaged in the beneficial use of nuclear technologies. These companies represent a broad spectrum of interests, including every U.S. energy company that operates a nuclear power plant. NEI’s members also include nuclear fuel cycle companies, suppliers, engineering and consulting firms, national research laboratories, manufacturers of radiopharmaceuticals, labor unions, law firms and 57 universities, including the University of Wisconsin.

NEI commends the Wisconsin State Assembly for its consideration of AB 555, legislation to end the moratorium on new nuclear plant construction in the state. The industry applauds Rep. Mike Huebsch and others for pursuing this important legislation to allow companies the option to build new nuclear power plants in Wisconsin to meet future electricity demand. Nuclear power is a clean, reliable and affordable source of electricity today for Wisconsin consumers and it should be one of the options for meeting the state’s future electricity needs.

The purpose of this testimony for the Committee is threefold:

1. recognizing nuclear energy’s value to Wisconsin and our nation
2. addressing nuclear energy’s importance in meeting our future energy needs
3. discussing the value of preserving a diverse portfolio of energy options for Wisconsin companies in the future.

America’s 103 nuclear power plants provide electricity for one in five U.S. homes and businesses. In Wisconsin, the Kewaunee and Point Beach nuclear plants likewise account for 20 percent of the state’s electricity. In addition, America’s nuclear plants are the safest, most efficient and most reliable in the world. The industry again last year set records for efficiency and electricity production—its fifth consecutive record-setting year. U.S. nuclear power plants produced a record 780 billion kilowatt-hours of electricity in 2002, an 11-billion kilowatt-hour increase over 2001. The nation’s nuclear plants operated 92 percent of the time to supply America energy around the clock—an efficiency rating far above any other fuel source.

Even with extensive conservation and energy efficiency programs, electricity demand in the United States is expected to grow 36 percent by 2020, according to the U.S. Department of Energy. Consumer demand in Wisconsin is expected to expand by about 33 percent over the same period. Meeting this rising electricity demand in our high-tech, digital economy will require additional sources of power. Nearly all of the power plants built in the past several years have been natural gas-fired plants because of the relatively low capital investment required and their quick time to market. As a result, the total U.S. capacity of natural gas-fired plants has more than tripled since 1990. However, there are disadvantages to this overdependence on natural gas-fired plants, as recent shortages and price spikes in natural gas markets have shown.

One of the strengths of the U.S. electrical sector is the diversity of domestic fuel supply for power generation. Half our electricity is generated using coal, followed by nuclear energy (20 percent), natural gas (18 percent), hydropower (7 percent), and renewables like solar and wind (2 percent). However, many industry experts—including some here in Wisconsin—say that an over-reliance on one energy source is likely to create serious risks in the future. Richard Abdoo, chairman and chief executive officer of Wisconsin Energy Corp, said earlier this year that, “Diversity of energy supply is absolutely critical. History has shown over and over again that if you put too many eggs in one basket, you’re going to find yourself regretting your decision at some point.” In the energy business, as in financial portfolios, diversification is essential to ensuring stable long-term performance.

Nuclear power plants provide many other benefits in addition to energy diversification. Nuclear energy is the largest source of emission-free electricity in the United States and is the only large-scale, emission-free source of power that is expandable. Avoiding the emissions that lead to acid rain, smog or that produce greenhouse gases has enormous benefits for the environment. In 2002, Wisconsin’s nuclear plants avoided carbon emissions equivalent to taking 2.5 million passenger cars off the road—nearly as many as are registered in Wisconsin. Nitrogen oxide, a key contributor to acid rain, avoided by the state’s nuclear plants in 2002 is equal to that of 1.2 million passenger cars. In addition, Wisconsin’s nuclear plants avoided 51,000 tons of sulfur dioxide emissions.

Nuclear energy produces nearly three-quarters of the electricity that is emission-free nationwide and has been a significant compliance tool to meeting Clean Air Act standards in the Midwest and Northeast states. Increased use of electricity from nuclear power plants since 1999 has resulted is significant reduction in emissions of sulfur dioxide and nitrogen oxides in the 22 states regulated by the Clean Air Act, according to a recent report by the Environmental Protection Agency.

Hydropower accounts for 25 percent of emission-free generation, but this is not an expandable resource. Renewables represent the remainder of our emission-free electricity. While developing additional solar and wind energy is important to our nation’s energy diversity, they are expanding too slowly to change the energy landscape significantly in the near future. Hence, nuclear energy will remain the primary source of emission-free electricity for many years to come.

Nuclear energy also plays a vital role in the Bush administration’s voluntary greenhouse gas reduction strategy announced earlier this year. The nuclear energy industry has pledged to reduce greenhouse gas emissions by adding 10,000 megawatts through increasing capacity at existing nuclear plants and restarting the Browns Ferry 1 nuclear power plant. This reduction will meet one-fifth of the Bush administration’s goal of reducing greenhouse gas emissions by 100 million metric tons by 2012 beyond the reductions that otherwise would occur.

In addition, improved safety and efficiency have made nuclear plants more economical to operate and resulted in lower electricity costs for consumers. Since 1990, efficiency and production gains have added the equivalent of 26 new large reactors to our electricity grid—one of the most successful energy efficiency programs in the nation. The increased efficiency lowered production costs, so that nuclear energy is the lowest-cost, major electricity source in the United States.

The nuclear energy industry’s safety record—the linchpin of our public credibility—continues to be outstanding by any measure. The number of “significant events” at nuclear power plants has decreased dramatically in recent years, from an industry average of 0.45 events in 1990 to 0.03 events in 2001. Significant events, as classified by the U.S. Nuclear Regulatory Commission, are those events that may result in the degradation of important safety equipment, result in a reactor shutdown with complications, involve plant operation outside of NRC-approved specifications or degradation of reactor fuel integrity. Nuclear power’s industrial safety record is unmatched by any other manufacturing sector in the country. In fact, the nuclear energy industry has a higher worker safety rating than the finance, insurance and real estate industries, according to U.S. Labor Department statistics.

The industry’s excellent safety and economic performance has resulted in a growing trend toward extending operation at U.S. nuclear power plants by 20 years. NRC approved the renewal of the first nuclear plant license in 1990 and a total of 23 reactors—nearly one-fourth of those operating nationwide—have been approved for an additional 20-year license since then. Companies seeking license renewal must demonstrate to the NRC that the plants will continue to operate safely and protect the environment. There is tremendous public support for renewing the licenses of reactors that continue to meet federal safety standards—83 percent of adults favor license renewal, according to an October survey of U.S. adults by Bisconti Research Inc./RoperASW.¹

A growing recognition of nuclear energy’s environmental benefits, low cost and reliability also has sparked a renewed interest in building new nuclear plants. The nuclear energy industry’s strategy for future growth—Vision 2020—is to add 50,000 megawatts of new nuclear generating capacity by 2020 to meet rising electricity demand and protect our environment, along with the 10,000 megawatts of expansion from existing plants. However, even if the industry achieves this goal, the percentage of electricity generated by non-emitting sources in 2020 still will remain largely unchanged at 30 percent.

The U.S. Department of Energy also is implementing Nuclear Power 2010, which aims to put an advanced reactor into service by the end of the decade. The program provides support for U.S. energy companies engaged in testing new, more efficient regulatory approaches for bringing new nuclear plants to market. As part of this program, three electric companies—Dominion Energy, Entergy Corp. and Exelon Corp.—recently filed applications for early site permits, which would lay the groundwork for site approvals for new nuclear plants in Virginia, Mississippi and Illinois, respectively. The early site permit process allows a company to pre-approve a plant site, and use that site if the company decides to build a new reactor in the years ahead. DOE is seeking volunteers for its new combined construction and operating license demonstration project, the next step in testing the new licensing process for new nuclear plants.

Many leading policymakers have advocated reexamining nuclear energy and the benefits it provides our country. Federal Reserve Chairman Alan Greenspan has advocated reexamination of nuclear energy for nuclear plant construction. In testimony before the U.S. Congress this past June, Greenspan said, “I’ve always testified in favor of re-examining what I think is a policy which is mistaken, namely our views toward nuclear energy. I do think that the technologies have improved immensely, and the advantages that they obviously have, I don’t have to get into them, I’m sure you know them far better than I.”

Leading U.S. scientists agree that nuclear energy should play a significant role in our future energy policy, which is inextricably linked to environmental policy on the state and federal levels. A recent study by Harvard and the Massachusetts Institute of Technology concluded that “the nuclear option should be retained, precisely because it is an important carbon-free source of power that can potentially make a significant contribution to future electricity supply.” The study was co-chaired by MIT Professors John Deutch and Ernest Moniz, both former U.S. undersecretaries of energy.

Similar opinions about nuclear energy are being voiced in Wisconsin as well. The Milwaukee Journal Sentinel, in its Oct. 31 editorial, said, “We also remain convinced that the best answer for the state's energy puzzle is a diverse supply from natural gas, coal and nuclear plants as well as alternative and renewable sources.” And in the LaCrosse Tribune, retired engineer Del Butterfield wrote in his Dec. 2 opinion-editorial article that “energy security … require[s] a new commitment to carbon-free energy sources. In Wisconsin and nationally, it’s time to seize the benefits of emission-free nuclear power. I believe the time has come to pass legislation in Wisconsin that would overturn a 20-year ban on nuclear plant construction. At the very least, the Point Beach and Kewaunee plants should be allowed to renew their operating licenses and continue generating electricity if the NRC determines they are safe.”

The U.S. Congress has indeed demonstrated its bipartisan support for nuclear energy. Last month, it approved $156 million in nuclear research and development funding for fiscal year 2004, the highest level of federal R&D funding since 1994. Congress also approved the highest level of funding to date for the Yucca Mountain project, the national repository for used nuclear fuel in Nevada.

Progress on national policy for used fuel management is another reason the state assembly should repeal the moratorium on new nuclear plants. The president and Congress last year approved Yucca Mountain, Nev., as the site of a national repository—a significant step forward toward fulfilling the federal government’s obligation under the Nuclear Waste Policy Act of 1982 to manage used nuclear fuel from the nation’s commercial nuclear power plants. DOE is working on a license application for the nation’s largest public works project that it plans to submit to the NRC in December 2004. This license, if approved, will enable the department to begin building the underground repository, which is scheduled to begin accepting used reactor fuel in 2010. Given this schedule, a federal repository would be available when new nuclear power plants are built in the United States.

Although no new nuclear plants have been built in the United States since the mid-1990s, new plants are under construction in Finland, Japan, South Korea, China and elsewhere. Given recent energy shortages and curtailments and a growing recognition of the nuclear energy industry’s safety, reliability and environmental benefits, there is growing policymaker and public support for building advanced nuclear power plant designs in the United States. In a recent nationwide poll of adults conducted for NEI by Bisconti Research Inc./RoperASW, 60 percent of respondents said they favor nuclear energy as one way to produce electricity, and seven out of 10 said they favor keeping the option open to build new nuclear power plants.²

Consumers are particularly concerned about future energy production in the face of energy supply disruptions or shortages. The peak of recent nationwide public support for new nuclear plants coincided with the energy shortages in California two years ago. In March 2001, 66 percent of those polled said we should definitely build more nuclear power plants—the highest figure to date. This year, the August blackout left 50 million without power in the Midwest and Northeast. Soon thereafter, a nationwide poll showed support for nuclear energy in the Midwest increased to 66 percent, an increase of 11 percentage points from the previous survey in July. Support in the Northeast surged by 18 points after the blackout.³

Nuclear power’s distinct economic and environmental benefits are generating increasingly broad support for nuclear as a desirable source of electricity for their communities. Including nuclear power as one alternative to meet Wisconsin’s growing energy demands will help ensure that an important source of reliable, emission-free electricity remains available in the state.

The nuclear energy industry supports the AB 555 and its aim of ending Wisconsin’s ban on new nuclear plant construction. Nuclear energy is an essential component of the state’s energy mix today and is poised to play an even greater role in supplying energy in the future. Given the industry’s exemplary safety and reliability record and the federal government’s progress on a repository for used nuclear fuel disposal, nuclear energy clearly deserves consideration as a possible future energy option for Wisconsin.

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¹ Survey of 1,000 adults nationwide by Bisconti Research Inc./RoperASW, Oct. 3-5, 2003, margin of error is ±3 percent.

² Ibid.

³ Ibid.