News & Events

Good afternoon, distinguished members and guests of the Miami Chamber of Commerce. It is a great pleasure for me to stand before you today to talk about the rebirth of nuclear energy in this country and what it could mean for Florida.

This nuclear renaissance is something that the industry had been doing the seed work on for many years. And it was something that appeared entirely possible when I retired as president and CEO of the Nuclear Energy Institute in 2005.

Now, with the leadership of Florida Power & Light and other companies in Florida and across the industry, we stand on the verge of seeing it become a reality.

It is also an honor to talk to you—the business community of Miami, the hub of commerce in Florida—about the importance of nuclear energy to this country, and to this state, because, quite frankly, you get it. Your electric utilities get it. Your state legislators get it. And your consumers embrace it.

You understand that nuclear energy is essential to your economic and environmental future because it is a source of abundant, reliable, low-cost, around-the-clock electricity that enhances our energy security. And nuclear energy is environmentally friendly. It produces no air pollutants or greenhouse gases.

As NEI’s president and CEO, I actively participated in the Chamber’s Committee of 100—the group of chamber executives that represents the chambers and its members to the U.S. Chamber, advising the organization on programs and services for chambers and providing feedback on policy-related issues. I found broad recognition among my peers of the value of nuclear energy today and its important role in the future.

Your utilities are among the leaders of the new nuclear plant construction effort. FPL is a member of NuStart, a nuclear industry consortium formed to advance the next generation of nuclear power plants in the United States, and is evaluating the potential to add new nuclear generation to serve its customers in Florida. Progress Energy intends to submit to the Nuclear Regulatory Commission a license application later this year to build and operate as many as two new reactors at the Harris Nuclear Plant in North Carolina and in 2008 for two reactors at a new site in Levy County here in Florida.

Your state legislators are supporting this need to build large-scale power plants. Last year, the Florida legislature passed the Florida Renewable Energy Technologies and Energy Efficiency Act, which directs the Public Service Commission to include fuel diversity and reliability when considering the need for a new power plant.

Significantly, the law provides companies building new nuclear plants a high degree of assurance that they will be able to recover their investment. This legislation is an insightful model for other states, and I think you will see other states in the Southeast following your lead.

Your consumers, and consumers across the country, recognize the role that nuclear power should and will play in our energy future.

In a national survey conducted by Bisconti Research in September, 81 percent of Americans believe that nuclear energy will play an important role in America’s energy future, and 76 percent said that we should prepare now to build new nuclear plants.

Last August, the Miami Herald said, in an editorial, “Nuclear energy is crucial for the U.S. economy and environment. Reinvigorating the industry now would come at a time when energy prices are escalating. … Nuclear energy is the most promising long-term approach to reducing U.S. dependence on fossil fuels.”

Last month a Tampa Tribune editorial described nuclear energy as “a clean and affordable power source that should be part of the nation’s strategy for energy independence.”

Your state is confronted with the need to increase energy diversity and satisfy rising demand. Florida currently ranks third in the nation in total energy consumption, according to the Florida Economic Development Council, and the council expects demand for electricity in the state to increase 30 percent over the next decade.

To put the nuclear renaissance in perspective, then, I want to discuss three topics with you. First, I want to point out the value of nuclear energy to the diverse electricity production portfolio in the United States, and here in Florida.

Second, I want to talk about the reasons for the renewed interest in nuclear energy across the country, the challenges of building new nuclear plants and the progress that the nuclear power industry has made toward building new nuclear plants.

And third, I want to address one of the questions often raised about nuclear energy—management of the used nuclear fuel.

First, then, the importance of nuclear energy to the energy mix of the United States. The great strength of this country’s energy portfolio is, in fact, its diversity of energy sources. Each energy source has its advantages, and its corresponding uses, in our electricity generating system. Taken together, they complement one another.

We have abundant coal and nuclear resources for baseload generation, natural gas for intermediate and peaking demand, and hydro and renewables as intermittent additives to the electricity supply.

Construction costs for coal and nuclear facilities are relatively high, but operating costs are quite low and stable. Natural gas facilities can be built relatively quickly, but operating costs are high and production costs are volatile. Today, 56 percent of Florida’s electricity is produced by natural gas plants.

Nuclear power is unique in that it can provide reliable baseload generation—electricity produced around the clock, every day—while emitting no air pollutants or greenhouse gases. Additionally, nuclear power is not susceptible to interruptions of fuel deliveries as Florida experienced during the hurricane seasons of 2004 and 2005.

There are 103 commercial nuclear reactors operating in the United States today. They produce 20 percent of this nation’s electricity. Five of those reactors are here in Florida—two at St. Lucie and two at Turkey Point, operated by Florida Power & Light Co., and one at Crystal River, operated by Progress Energy.

Together, they produce 13 percent of Florida’s electricity. And they prevent, in an average year, the emission of nearly 21 million metric tons of carbon dioxide. In terms of reducing greenhouse gas emissions, that is the equivalent—annually—of removing practically half of all passenger cars on Florida’s roads today.

Unfortunately, what has happened over the past 15 years in Florida and other parts of the country is that we have underinvested in new nuclear and coal generating facilities.

During this time, we have built 290,000 megawatts of new gas-fired power plants, but only 11,000 megawatts of new nuclear and coal. Yet, nuclear and coal together generate 70 percent of the U.S. electricity supply, and provide price stability, unlike the price volatility of power plants fueled with natural gas.

New nuclear plant construction can help rebalance fuel diversity in the electricity sector while providing electricity at stable prices. That leads me to our second topic—the nuclear renaissance in this country.

Interest in building new nuclear plants is being driven by three fundamentals of the electricity business itself.

First, there is a recognition that demand for power is growing rapidly, and that we must make sure we have enough capacity to supply electricity to businesses and consumers during peak demand.

Second, there is uncertainty about future emissions restrictions on coal-fired generating capacity and the cost of meeting those tighter limits on emissions.

And, third, there is concern about the chronic volatility in natural gas prices, caused by unsustainable pressure on supply from all of the gas-fired power plants built over the last decade and a half.

To focus on electricity demand for a moment, Fitch Ratings, in its U.S. Power and Gas 2007 Outlook, notes that “electric power reserve capacity margins are gradually shrinking, since only minor amounts of capacity are in construction currently, and power demand continues to increase at modest to moderate rates.”

Fitch goes on to say that reserve margins are decreasing in all regions of the country, but especially in the Northeast, mid-Atlantic, Texas, New York and, yes, Florida.

Despite these market imperatives, we do face challenges to getting new nuclear plants built. The major challenges are, first, financing and, second, predictability of the licensing and regulatory process. Let me take a few moments to tell you how we are meeting these challenges.

Nuclear energy is a strategic national resource that contributes to our national energy security, and to the fuel and technology diversity that is essential to reliable electric power supply. Given that, it’s appropriate to allocate the risks and rewards of new nuclear plant construction among company shareholders and bondholders, the federal government and taxpayers, and the state governments and customers. These are capital-intensive facilities, with relatively long lead times between initial investment and commercial operation, and they are subject to a new and untested regulatory process.

Fortunately, the federal government and, increasingly, state governments appreciate the strategic value of nuclear energy, and also recognize these uncertainties and the challenges associated with financing new nuclear plants.

In 2005, Congress passed the Energy Policy Act, which provides limited investment incentives for the construction of a new generation of nuclear power plants. These include production tax credits; standby support, which provides some support in the event of licensing or litigation delays; and federal loan guarantees for an array of energy projects that reduce emissions.

These investment incentives, coupled with assurance of investment recovery at the state level—like that provided by the Renewable Energy Technologies and Energy Efficiency Act, passed in Florida last year—are positive steps toward developing the necessary support that will be required to finance these capital-intensive baseload power plants.

The nuclear industry is also well-positioned to meet the challenges associated with a totally revamped federal government licensing process.

When we built today’s plants, the regulatory process was still evolving, and design requirements often changed after construction began.

Today, regulations are stable, and regulatory approvals are obtained before significant capital investment is put at risk. The Nuclear Regulatory Commission has a more disciplined and more transparent licensing process, and it is structured more efficiently.

The opportunity for public participation is at the front end of the process, where it is more meaningful. Also, delays in commercial operation of a completed plant have been reduced, by design: Any delay would require a plausible showing that the plant as built does not meet pre-approved specifications, and this is highly unlikely, given other controls that will be in place.

Advanced reactor designs will be standardized—we will build families of identical plants. The new nuclear plant designs are evolutionary improvements on today’s light water reactors, but they are still light water reactors. That technology is mature and well understood. There is little technology risk.

The industry also will benefit from improved construction management and construction practices. Experience in the Far East demonstrates that it is possible to build nuclear plants in 48 months or slightly less.

The Tennessee Valley Authority’s success in refurbishing a reactor at its Browns Ferry nuclear plant, which was shut down after a fire in the mid-1970s, gives us great confidence that we can manage these complex construction projects and bring new nuclear power plants into service on time and on budget.

The refurbishment at Browns Ferry is a $1.8-billion project and the plant will restart in May, as originally scheduled.

Finally, we are seeing the first signs of revival in the supply chain for new nuclear plant construction. In manufacturing, for instance, Babcock & Wilcox recently renewed its federal accreditation for manufacturing nuclear-grade components. And there is manufacturing capability overseas in Japan and France. U.S. nuclear companies have already placed orders with Japanese companies for long-lead, heavy-forgings for reactor components.

The supply chain will respond as market demand dictates. The more it looks like new nuclear plants will be built, the more U.S. capability will be developed.

Today, 14 companies and consortia have announced that they are preparing to submit license applications to the Nuclear Regulatory Commission to build up to 32 new reactors. These companies are selecting technologies from two NRC-certified reactor designs, and two more designs that are under review by the NRC.

These application submittals are expected beginning in 2007. Every major nuclear fleet operator is involved in some way, as well as some newcomers to the industry. Different companies are moving at different speeds, but the momentum is real.

More nuclear plants mean more nuclear waste, and I’m sure some of you are wondering about the industry’s plan for used fuel management.

I want to underscore the fact that the nuclear power industry has always taken its responsibilities for waste management seriously. The environmental policies and practices at nuclear power plants are unique in American industry in having successfully prevented any impact to the environment or any threat to public health and safety since the start of the commercial nuclear industry almost 50 years ago.

The volume of used nuclear fuel that electric utilities are managing is relatively small: All the used nuclear fuel produced by all commercial nuclear power plants since the beginning of the commercial nuclear power program would cover an area the size of a football field only 10 yards deep. From an engineering point of view, used nuclear fuel is a solid, ceramic material that is easily contained, packaged and stored.

There is a long-standing consensus among the international scientific community that geologic disposal is the preferred approach to long-term isolation of used nuclear fuel. Twenty years and $9 billion of scientific investigation and research support the federal government’s determination that Yucca Mountain, Nev., is well-suited as the national site for the long-term disposal of used nuclear fuel. The Department of Energy is expected to submit a license application to build the repository in 2008.

The nuclear renaissance in this country, and expected growth in nuclear power around the world, has renewed interest in recycling used nuclear fuel rods. The advantages to recycling nuclear fuel are self-evident—extracting material that can be used to produce additional energy in reactors and reducing the volume and toxicity of the waste byproducts requiring disposal.

The federal government has taken an important step to begin this work by implementing the Global Nuclear Energy Partnership. This international program is intended to enable countries to take advantage of the benefits of nuclear energy while preventing proliferation.

Last month, the Department of Energy released its strategic plan for the Global Nuclear Energy Partnership, which includes developing advanced recycling technologies and advanced reactors capable of using recycled fuel and consuming radioactive elements.

In the meantime, until this advanced technology development is complete, the industry is looking to the federal government to fulfill its legal obligation to remove used fuel from commercial reactors and move it to safe, centralized storage.

This is certainly an exciting time to be part of the nuclear energy industry.

We are looking forward to providing our customers reliable, affordable electricity while protecting the environment.

We are looking forward to building new plants.

We are looking forward to the recycling of used nuclear fuel, fulfilling the potential of this technology to be renewable.

And we are looking forward to the worldwide growth in nuclear energy to help power America’s future generations and to bring electricity to some 2 billion people around the world who have never had it.

Nuclear energy is low-cost energy. It is reliable. It is clean. And it can lead our nation to greater energy independence in a manner that protects our environment.

Nuclear energy is important today and for tomorrow to enhance our energy security in the electricity sector. It can provide the power for plug-in hybrid cars to help America wean itself from foreign oil in the transportation sector. And it can eventually play a crucial role in a future, emission-free hydrogen economy.

I leave you with this closing thought.

I hope that you will support your Florida companies embarking on new nuclear plant projects. And I hope that you will support your federal and state legislators and regulators who are enacting and implementing energy policy that will keep business competitive and provide an ample supply of clean energy for all consumers.

This renaissance is a partnership between the private sector and the public sector. By expanding the role for nuclear energy in your state’s energy and environmental policies, you will build a better future for Florida.