News & Events

Introduction
Good morning. This is my first official day on the job as president and CEO of the Nuclear Energy Institute.

It’s a great opportunity—because there simply hasn’t been a better time to be in the commercial nuclear energy industry than today.

And because I believe so strongly in the mission of this industry, I’m encouraged by the strong leadership we’ve seen in here in Washington—most recently from President Bush himself. The president is as convinced as we are about the role nuclear energy plays today and the tremendous future opportunities it brings for our country.

In the Congress, there are allies on both sides of the aisle—like Sens. Craig and Domenici, who are joining us at this conference, and Sens. Mary Landrieu and Blanche Lincoln. So many on the Hill now understand the energy independence and the environmental benefits that come with nuclear energy.

We’re looking at an emerging world with more competition for fossil fuels and a greater need than ever for affordable, reliable electricity.

And we’re looking at a world where there are growing challenges to our environmental quality, notably the quality of our air.  Nuclear energy can help answer these needs and challenges.

But will we have the conditions that can bring that about?

We can. Many of the conditions are falling into place right now. And today, I’ll focus on four of them. For each, I’ll review the success we have achieved to date, and look at the challenges that lie ahead.

Condition One: Solid Performance
Every day, we are doing the things necessary to ensure the continued operational excellence of today’s reactors. With almost 3,000 reactor-years of experience, nuclear energy’s performance over the past 10 years is virtually unparalleled in American industry.

If we look at lost-time accident rates, nuclear plants are also among the safest places to work in the entire industrial sector.

In 2004, U.S. nuclear plants operated at almost 91 percent efficiency and, along with coal plants, were the lowest-cost electrical power generators.

By a large margin, nuclear energy remains America’s primary source of emissions-free electrical power, accounting for 70 percent of the clean electricity in the country. At the same time, nuclear is essential for a strong and vibrant economy, as it relieves pricing pressure on other sources of electrical generation, and could help restore jobs in the chemical industry that have moved off-shore due to the high cost of natural gas.

We’ve had an astonishing record of growth over the past 10 years. Between 1994 and 2004, nuclear plant production increased by the equivalent of 18 1,000 megawatt plants operating at 90 percent capacity—primarily due to increased efficiency.

In the last four years, we’ve seen 2,300 megawatts in power uprates approved, with another 1,100 megawatts in uprates under NRC review.

The challenge in this area is obvious. We must continue to remain constructively dissatisfied with our 10-year success. We must challenge all the assumptions. We must continue to pursue excellence in training and maintenance practices, pushing the envelope on new efficiencies and spreading best practices among the industry. We must continue to anticipate and address small problems before they become large problems. We must continue to lead. America demands no less of us.

Condition Two: Regulatory Stability
Regulation for today’s reactors has experienced a sea change over the past five years. First thought to be unworkable, safety-focused regulatory concepts are now commonplace in this, the sixth year of the NRC’s revised reactor oversight process.

Today, three-quarters of U.S. reactors are in the NRC green category, the top level of regulatory performance. Meanwhile, there are relatively few “white” inspection findings and performance indicators—the next level of increased regulatory attention—across all plants.

That’s an admirable level of performance—one we ought to be proud of. Equally important for the future will be changes made to the licensing process in general, removing bureaucratic, counterproductive hurdles and replacing them with common-sense objective criteria.

I applaud those companies demonstrating and testing the new licensing processes for new plants, those pathfinders who are testing the early site permitting process, and also those companies pursuing new cost-sharing arrangements to test the combined construction and operating license process. 

Our challenge is to continue this safety-focused approach to regulations and oversight in all areas of the nuclear power industry. Stability in these regulations allows the industry to make required investments in a planned, steady way and achieve the goals and requirements.

We must guard against shifting the objectives after goals are achieved. We must apply the highly successful safety-focused and stable regulatory process that evolved in the reactor oversight area to all facets of nuclear power regulation.

Condition Three: Improved Support from Policymakers and the Public
Public opinion in favor of nuclear plants is strong and getting stronger. Americans are not accepting at face value the wild claims of the nay-sayers any longer, and are becoming fed-up with unstable foreign fuel supplies.

Put simply, Americans are becoming more aware and in favor of electricity generated by clean, reliable, secure and affordable nuclear energy—and therefore look upon it more favorably.

Polling statistics demonstrate that we’ve won the confidence of Main Street. Take the results of Bisconti Research and NOP World’s most recent public opinion survey conducted last October:

• 67 percent of Americans favor nuclear energy
• 80 percent say nuclear energy will be important in meeting America’s future energy needs. More people rate nuclear energy as a fuel for the future in the electricity sector than any other fuel source
• and a surprising contrarian trend: 62 percent would contradict the notion that new reactors won’t be built in “my backyard,” approving of a new reactor’s construction at the nuclear power plant closest to them.

This increased public support hasn’t escaped the notice of our political leaders. Only a few weeks ago, President Bush told the nation in his State of the Union address that his energy bill would encourage the production of reliable supplies of affordable, environmentally responsible energy, including “safe, clean nuclear energy.”

Forbes, Fortune, Business Week, The New York Times and the Chicago Tribune have all in the last six weeks carried major, positive articles on the prospects for growth in our industry.

Positive reports from Moody’s and Citibank, among others, make it clear that Wall Street also has growing confidence in the operation of today’s plants and in a role for new reactors.

The challenge? To seize the initiative. To take the leadership role in ensuring this wave of positive opinion grows. To ensure through the continued strong performance of the nuclear industry (condition 1) and stable, safety-focused regulations (condition 2) that thoughtful, unemotional citizens of this country will literally insist on this clean fuel alternative as a part of tomorrow’s energy mix.

Condition Four:  Obtaining Viable Financing for Baseload Power Plants
Perhaps the most significant challenge the electric utility industry faces is demonstrating the viability of financing large capital projects, such as large coal and nuclear power plants.

The conference report on national energy policy legislation passed in 2003 by the House of Representatives provided many of the investments that would take a major step forward in this area.

This step forward includes obtaining the appropriate level of government participation through the Energy Department’s 2010 program and through other provisions in national energy policy legislation. More precisely, the leading policy elements favoring nuclear energy should include:

• securing a menu of investment incentives for new nuclear plants, because utilities building new nuclear in regulated states have different needs than those building in an unregulated, merchant environment
• the menu should include tax and production incentives for new baseload power generation, including new nuclear plants, along with guaranteed loans for capital startup
• and in recognition of the security that comes with nuclear energy, the menu should include government investment in first-of-a-kind engineering for the first few projects based on new reactor designs not yet in operation.

The industry also must partner with state regulators to ensure that companies can count on investment recovery from nuclear projects that are well managed. We must demonstrate such a project is a creditworthy endeavor.

State regulators can also help by authorizing long-term power purchases that preserve the consumer’s interest in power supplies at stable prices.

NEI and the Edison Electric Institute are leading a new initiative to look at innovative financing for large projects, such as baseload power plants and new transmission systems. We need to demonstrate innovative financial concepts, including approaches under consideration today in some states:

• programs such as Wisconsin’s “Power the Future” program as a model of state/industry cooperation in building capital-intensive projects
• approaches adopted in states like Alabama, Mississippi and Indiana, where permits allow for various ways of recovering approved environmental costs. Iowa has legislation in place that permits pre-approval of recoverable construction costs.

The challenges are tough. We must work even harder in building the business case for debt and equity financing of nuclear. We must tie together the successes and challenges of the first three conditions I’ve discussed to build this business case more solidly. I aim to do just that.

Conclusion
I’ve argued today that the nuclear power industry is well-positioned to continue to serve America in delivering clean, secure, economical electricity to meet this country’s growing demand. I’ve suggested that our country’s energy security is linked to a viable nuclear industry and that the country’s energy security supports our physical security.

Stable, consistent, safety-based regulations have ensured safe operation of our nuclear plants and have led to record-breaking production and, in turn, to a new zenith in public approval of nuclear power. The stars are aligned.

However, to take complete advantage of this pivotal moment, the industry needs to fit a few final pieces in the puzzle to win investor confidence that results in viable financing for new reactors.

And because of the long lead times needed to deploy new baseload generation, we must take important steps in the next few years if we’re going to guarantee America’s energy security, environmental stewardship and economic strength.

Indeed, we are well on our way toward achieving the right conditions while being ever-mindful of our overriding commitment to safety.

This has been—and will always be—at the core of our pursuits.

We are in the midst of an important mission to both secure the future of today’s plants, as well as lay the groundwork for the construction of new plants.

This successful campaign will help ensure our country’s energy security and therefore our country’s physical security.

In uncertain times, that’s a worthy goal for all of us, and one of the reasons why I chose to continue my career at NEI.

And so, I am honored to join you here on this most important day in my career. I look forward to working on these issues with you, every day, to ensure that nuclear energy plays a role in a diverse energy supply that improves both our quality of life and our environment.

Thank you.