News & Events

Thank you for that introduction, Jeanne (Fox). It’s always nice to see a fellow New Jersey native. And thank you for having me back to NARUC. As many of you know, I have had a history with NARUC, from my days as president of the New Jersey Board of Public Utilities to my time as Environmental Protection Agency administrator. I have a tremendous amount of respect for all of you and for all that this organization accomplishes for the people of our nation.

I want to share with you this morning some of the work that I’m involved in to help to ensure that Americans will have the electricity they need in the decades ahead … and that we are pursuing energy solutions that do not place an undue burden on our environment and future generations.

You know the energy landscape that lies ahead.

The Energy Information Administration predicts that we will need 45 percent more electricity by 2030—or about 300,000 megawatts of new power capacity.

That is not something that we can take lightly. But how do we meet the need?

We need to make continued advances in efficiency and renewable energy technology, and increase our dedication to conservation—we haven’t yet really scratched the surface. But we know that these alone won’t meet the demand. The industry also must build more baseload electricity production. And it needs to start today.

NARUC’s importance is more evident than ever in this current environment. State utility boards are on the front lines of regulating these projects to balance consumers’ interests with those of the companies that must recover their costs. You also see the impact of energy supply and price volatility on local business and industry and on consumers.

Price and reliability have a real impact on how we meet the growing electricity needs of our households and on the growth of our states and communities. While small businesses feel the effects of volatile energy pricing on an immediate basis, large corporations often make decisions on where to locate based on the long-term cost of energy.

The energy challenges that face America are well known by this group. But these are increasingly being viewed through the prism of climate change.

That’s certainly the case in Congress, which has already begun hearings on climate change legislation. Clearly, climate change is an environmental reality that requires action. In the energy sector, we need to take full advantage of electricity production sources that don’t produce greenhouse gases yet meet our baseload needs and will continue the strides we have made to make our skies and water cleaner.

We need an energy policy that accomplishes a wide variety of goals. We want sources that can meet the rising demand between today and 2030. For many of you whose regions have ever-shrinking electricity reserve margins, that need is more acute. We need electricity that is reliable and affordable … that is fueled by domestic sources or using fuel from stable trading partners. And we need electricity that has a low environmental impact.

Earlier this month, electricity demand in the Mid-Atlantic region set a new winter record—ironically, one week after Congress began debating climate change.

On the surface, this looks like two competing realties. But they’re not. We need to develop an energy portfolio for the future that recognizes both imperatives.

Unfortunately, there are no silver bullets … there is no panacea.

We’ll always need a diverse energy production portfolio—but we also need to recognize today’s environmental reality.

Coal and nuclear energy together represent approximately 70 percent of U.S. electricity supply today, but investment in new nuclear and coal-fired power plants virtually disappeared over the past 15 years.

Instead, we’ve added natural gas-fired plants during that time, which made sense when gas was $2 to $3 per million Btu. But now, gas is the most economically volatile of our electricity fuels, averaging $9 per million Btu in 2005—and prices were even higher a few years before that. At that price, many natural gas plants simply cannot compete in the marketplace.

Right now and for the foreseeable future, we really have only two viable electricity sources that can meet baseload power needs: coal and nuclear power.

That’s not to ignore renewables and alternative energy. Indeed, supporting these energy sources is important. But even if we achieve the admirable goal of doubling or tripling our electricity supply from renewables by 2030, we will still need to increase baseload sources of electricity, including nuclear energy, to have a chance at meeting that forecasted 45 percent increase in electricity demand.

Let’s look at this through the climate change lens again.

 

We already have a proven form of power generation that can help us meet the goals I just outlined. Nuclear power is safe, affordable and reliable. Companies already are preparing licenses to build a new generation of reactors that enhance plant safety and operations and reduce construction costs.

Nuclear power plants produce no controlled air pollutants or greenhouse gasses during the production of electricity. And, when you look at the lifecycle of greenhouse gas impacts, of all the electricity technologies, nuclear energy’s impacts are extremely small—about the same as wind, geothermal and hydropower. This benefit is of particular significance to me and of growing importance to the country as a whole, not to mention the post-Kyoto world.

During my seven years as governor and my two and a half years at the EPA, I worked hard to help reduce the emissions from conventionally fueled power plants. Many of these actions have had an impact on improving our air quality.

But at the same time, the nuclear energy industry has also made a profound difference in reducing greenhouse gases over the last decade.

The nation’s 103 nuclear plants have made great progress in a variety of areas, starting with improved efficiency.

The average reactor now produces electricity at a 90 percent capacity factor. Clearly, this level is the industry leader for all plant types, and the industry has sustained efficient, 24/7 performance near the 90 percent level for the past six years.

As a result, estimated electricity production in all U.S. nuclear power plants was about 788 billion kilowatt hours—the second-highest ever. Current plants are continuing to increase their maximum power level and thus their production.

The combination of high efficiency and power uprates is largely why nuclear power has been able to hold on to its 20 percent market share despite the fact that no new reactors have come on line in almost 15 years. The rise in efficiency since 1990 has been the equivalent of adding 26 new reactors.

This improvement has also been accompanied by a commitment to safety. In 2005, there was an average of zero unplanned reactor shutdowns per 7,000 hours of operation. This means the plants were operating as they should, with no need for unplanned maintenance.

The U.S. Bureau of Labor statistics show that it is safer to work at a nuclear power plant than in the manufacturing sector. Some plants have logged more than 2 million hours without a lost-time worker accident.

In addition, nuclear energy has the lowest production cost of all major sources of electricity. The average fuel cost at nuclear plants is slightly cheaper than coal and—as you might expect—well below natural gas plants. In 2006, the average cost per kilowatt-hour was 1.65 cents.

Let me tell you how I came to supporting nuclear energy.

About this time last year, I was contacted by the Clean and Safe Energy Coalition—the CASEnergy Coalition—who brought to me a challenge. They were forming a coalition that would bring together nontraditional organizations or decision-makers to discuss the issues surrounding nuclear energy. Would I help in this effort?

As I mentioned earlier, air quality and climate change have long been critical issues for me. That being the case, any honest look at those issues tells you that nuclear has to be part of the future. People need to hear that nuclear plants emit no air pollutants or greenhouse gases. At the same time, I want to help put to rest some understandable concerns. In my experience, the more people learn about nuclear energy, the better chance that some long-held myths will be shattered. In most cases, a little information goes a long way as people recognize that the benefits of nuclear energy, particularly on the environment, clearly outweigh the limited risks.

That’s why I agreed to serve as co-chair of the Clean and Safe Energy Coalition with Dr. Patrick Moore, one of the founders of Greenpeace.


The coalition already numbers almost 800 members—many of them unlikely allies. We’ve brought together business and labor … local urban leagues and NAACP chapters … environmental and wildlife conservation groups … former and current elected officials … and some of the nation’s finest colleges and universities. Together, they are proof that energy security and environmental protection are not partisan issues.

We’re continuing our outreach to health and environmental groups, and I’ve been struck by their willingness to listen to the case for an expanded role for nuclear power.

I think many of these organizations are beginning to recognize that, as one person told me, “If you’re against global warming and asthma, you should be for nuclear power.”

More and more, people are coming to see that in order to meet America’s energy and air quality challenges, we must consider a larger role for nuclear energy.

The future of nuclear energy in this country is looking better than it has for decades. For the first time, I see the industry is committed to building new reactors, including some at sites that haven’t housed one before.

Many of the states represented here already are engaged in proceedings to discuss important issues such as recovery of cost during licensing and construction of these plants.

There are up to 33 new-reactor projects in the works, with three early site permits expected to be approved by the Nuclear Regulatory Commission this year, and the first combined construction and operating licenses for new reactors expected to be submitted to the NRC this fall.

As many of you know, the process of licensing and building reactors today is far removed from when companies last brought nuclear plants on line. There are significant differences in state electricity regulation, reactor designs, the federal licensing process, and the political and policy dynamics—and most of these factors are positive, I might add.

The industry has moved toward standardization in reactor designs so that many of the future plants will be identical models, bringing obvious efficiency in construction, maintenance and sharing of best operating practices.

The NRC has made progress, too—instituting a combined construction and operating license that will ensure that if a plant is constructed and meets all safety standards, it will be allowed to operate without delay. This eliminates some of the financial risk previously associated with nuclear plant projects.

To jumpstart construction of these advanced reactor designs, the Energy Policy Act of 2005 provides limited financial incentives for companies involved in the first projects. This is important because deciding to build a new nuclear reactor is a $3 billion to $4 billion investment for energy companies.

These are positive steps forward. Equally important are the steps many states have taken to lay the policy groundwork for new nuclear plant construction. Policies are being implemented that value a diverse generation portfolio and allow public utility companies to sign off on new-plant costs and set future rate increases before construction.

As the industry moves into a new phase of expansion, it must join with NARUC in continuing to drive progress toward stewardship of spent reactor fuel and recycling.

We have a solution ready to address the issue of spent fuel—the reason the solution is not already in place is not a scientific issue; it is a political issue. Yucca Mountain can and should be the repository for spent fuel. NARUC has long supported the Yucca Mountain repository project and the responsible use of rate payer contributions to the Nuclear Waste Fund for the program. That continued support is vitally important … and the CASEnergy Coalition also supports the need for the Yucca Mountain repository.

At the same time, we should be investing in research and development for advanced fuel treatment options like recycling so that we can use the tremendous energy remaining in spent fuel rods and reduce the amount and radioactivity in the byproducts that will require disposal at Yucca Mountain.

Despite federal government inaction on developing Yucca Mountain, there is broad support for nuclear energy from the public, from the investment community, and from a broad cross section of groups and organizations that comprise the Clean and Safe Energy Coalition. Don’t get me wrong, all of these people want a solution to spent fuel storage implemented safely and as soon as possible. It’s one of the questions I get most often when I talk to people about nuclear energy … and that’s why progress toward a solution is so important.

I want to close on what the public thinks about nuclear energy and our energy future because it is everyday Americans that are affected by the decisions we make. Support for nuclear energy has increased among the public in recent years.

Consistent polling has found that 81 percent of the U.S. public thinks that nuclear energy will play an important future role in our country’s future energy policy. And two-thirds of the public thinks we should definitely build more nuclear reactors.

That’s a strong statement—definitely build. But there is something even more powerful—some findings from a poll that was conducted for the CASEnergy Coalition last year. The survey revealed a challenge and an opportunity.

When people don’t have the facts, support for nuclear energy—while still strong—is not what it could be.

However, when people hear just a few basic facts about nuclear energy—about its environmental stewardship, about safety, about affordability—nuclear’s favorability rating doubled. When people know the facts, minds are changed.

In this country, we are very good at saying no. We say no to everything. It’s time that we say yes to something that makes sense for our environment, for our energy future.

That is the mission of the Clean and Safe Energy Coalition. If you want to learn more about our goals and the members of the coalition, I encourage you to visit www.CleanSafeEnergy.org .

At the broadest level, we agree that we need a broad energy portfolio to meet the real challenges ahead, and we all should be a part of finding that solution.

NARUC has been a leader in that regard, and I applaud NARUC for its recognition of the role of nuclear energy today and for the future. What better legacy for all of us—for NARUC—to leave than one that secures the future of the United States in so many ways.

Thank you again for having me back here today— and I would be happy to take any questions you may have.