News & Events

It’s been an eventful year since we last met in Washington – and the past few months have been extraordinary, with strong bipartisan support for nuclear energy in Congress, ringing statements of support from the White House, and actions to back up the words.

This morning, I’d like to clarify some expectations of our industry and discuss what we should be doing about them.

We’re expected to have great success to be a major player in a carbon-constrained energy world to help solve the challenge of shaping a low-carbon energy supply portfolio. And we are committed to meeting those expectations.

Yet we have to be mindful that our position is fragile. Recent events in the energy sector certainly ring true in this regard.  Things can change quickly and unexpectedly.

In our own industry a year ago, Florida seemed an ideal regulatory environment for nuclear energy development. Now, there is significant uncertainty in that state’s regulatory climate.  Rate decisions by the state public service commission have slowed the pace of all electric sector investment in the state, including two nuclear energy projects. 
 
Offshore oil exploration was gaining political acceptance, but the Deepwater Horizon disaster has changed that dynamic for the foreseeable future.  The path for us is in recognizing the environment we face from the business, political, regulatory and public perspectives advocating the benefits of our technology factually and with realistic expectations and, most importantly, operating safe, reliable and efficient nuclear power facilities.

The U.S. and global tenor for nuclear energy indeed is much different today than it was a year ago.

A year ago, a new president of the United States had just taken office.  Although he campaigned on expanding nuclear energy as part of his energy platform, he also opposed building the Yucca Mountain repository.

The loan guarantee program for new construction was still struggling – as it had been since it was first enacted – and the prospects of getting additional loan volume for the program were unclear.

The economy was in a downward spiral, which in turn had an impact on electricity demand and the bottom line for many of our companies operating existing plants and planning for new generation facilities.

That was a year ago.

And while there have been delays in some new reactor plans and license reviews, delay in Senate consideration of energy and climate legislation, and a still-struggling economy, the last 12 months have been transformational in our policy arenas

For starters, Gary Gates led members of NEI’s Executive Committee late last year to meet with White House climate and energy czar Carol Browner. We asked for greater emphasis on nuclear energy as part of the White House energy and climate policy. If the president supports nuclear energy, we said, it should be more visible support.

It wasn’t long after that meeting that President Obama began discussing the role of nuclear energy more prominently including the role it can play as part of a clean energy transformation during his State of the Union address.

That standing ovation for nuclear energy—from both sides of the aisle—was led by Congressmen Steny Hoyer of Maryland and James Clyburn of South Carolina—the Majority Leader and Majority Whip in the House of Representatives. 

Not long after the State of the Union, President Obama announced in a press conference at an IBEW hall in Maryland the first conditional loan guarantee for two reactors at Georgia Power’s Vogtle plant. This was very significant and made more so because the president made the announcement in a news conference broadcast live by CNN.

In addition, the president’s budget request for the next fiscal year will triple the funding available for loan guarantees to $54.5 billion. We’ll discuss that in more detail later.

There have been other positive events during the past year:

• Three highly qualified commissioners have been sworn in at the NRC. For the first time since 2007, we have a full complement of commissioners. They’ll provide a balanced, objective review of regulatory issues, another clear signal of the president’s growing commitment to nuclear energy.

• Congress and the administration approved $73 million in tax credits to jumpstart new manufacturing facilities for nuclear plant components in Louisiana and Tennessee.

• NEI played a significant role is amending an OECD rule to make it easier to use international financing assistance for U.S. nuclear energy projects in the future. The result is lower interest rates and longer financing terms for export credits for American nuclear power plants.

• The Commerce Department supported nuclear energy trade missions to India, the United Arab Emirates and three Eastern European nations. These missions will help our suppliers build relationships in other countries and expand their business.

This unambiguous policymaker support is one factor leading to a rising tide of public opinion for nuclear energy across the nation. A Bisconti Research poll commissioned this spring by NEI showed that nearly three-quarters – 74 percent – of Americans favor the use of nuclear energy, including a record-high level of support among women. 

Seventy-seven percent said they would approve of a new reactor being built at the operating nuclear power facilities closest to where they live. In the same poll, 27 percent of the respondents said they recalled the president’s announcement of loan guarantees for Plant Vogtle—a remarkably high recall rate for a single-day event.

These successes demonstrate the strength of the industry working together, and that’s a commitment we must maintain as we move forward.

There’s also continued bipartisan support in the Congress, although energy and climate change legislation in the Senate is stalled for reasons that have little to do with the legislation itself.

The Kerry-Lieberman bill was supposed to have been introduced in late April, and was just released last week by Senators Kerry and Lieberman.  I know you know the events that have unfolded in the last few weeks that have diluted the spirit of bipartisanship in which these three senators were developing the legislation.

The nuclear-related provisions in the legislation provide a solid platform for the expansion of nuclear energy to meet our electricity needs, create thousands of jobs and help achieve the desired reductions of greenhouse gas emissions. We successfully argued that when you consider the scale of investment our country must make over the next 20 years to meet electricity demand and upgrade our electric grid, this legislation was necessary to unlock investment needed to stimulate construction of carbon-free nuclear power plants.

I participated in the news conference with Senators Kerry and Lieberman last Wednesday and complimented them for their collaborative work on this legislation and for seeking input from a variety of interested parties to craft their proposal.

Though he was not a part of that announcement by Senators Kerry and Lieberman, Senator Graham’s committed work to recognize the value of nuclear energy and advance this issue should not be overlooked and we thank him for his efforts. We believe there is solid consensus on the need for, and the value of, the nuclear energy provisions in the legislation.

Senator George Voinovich of Ohio summarized this best at a recent hearing in the Senate Environment and Public Works Committee when he characterized nuclear energy as a “three-fer.” Senator Voinovich said: “Without it, we will not be able to reach our goal of reducing carbon emissions. Without it, we will not be able to provide the baseload electricity our growing country demands. And without it, we will be missing an amazing opportunity to strengthen the U.S. manufacturing bases and create good paying jobs.”

The Kerry-Lieberman legislation notwithstanding, the industry believes that any energy legislation should have a section that includes the policy priorities that our Executive Committee approved last fall.

Among other items, this section should include increased volume for loan guarantees for new construction, achieve efficiencies in the licensing process for new reactors and include provisions that accelerate the development of the U.S. supply chain for nuclear energy.

Many in Congress recognize that there are compelling reasons for expanding nuclear energy that go beyond the fundamental need for new baseload electric generation. 

For example, the Environmental Protection Agency and the Energy Information Administration both analyzed the American Clean Energy and Security Act, which was passed by the House last year. In the EPA analysis of the bill, nuclear power generation would have to increase 150 percent by 2050 to meet carbon-reduction targets in the legislation. If U.S. reactors are limited to 60 years of operation, 187 new nuclear plants must be built by 2050.

In EIA’s analysis, the U.S. would need to build 96 gigawatts of new nuclear generation by 2030 – 69 new nuclear plants under the so-called “basic” scenario.  This forecast would result in nuclear energy supplying 33 percent of U.S. electricity generation, more than any other source of electric power at that time.

Senator Lamar Alexander has called for the construction of 100 new nuclear power plants by 2030, a number he says is possible given the pace of new reactor construction in the 1970s and 1980s. The EPRI PRISM model, which reflects 64 gigawatts of new nuclear capacity—or about 45 new reactors—by 2030 as part of a low-carbon transition in the electricity industry, best represents the scenario that we are putting forth as a realistic expectation over the next 20 years.

Building new reactors requires significant financing. Loan guarantees are essential to acquiring that financing for most of our companies.  They also ensure favorable interest rates and, by reducing financing costs, keep electricity rates as low as possible for consumers. We’ve been working on several aspects of financing for our members, including increasing loan guarantee volume, ensuring that administrative costs for the loan guarantees represent the true risk to the government, modernizing the rules for overseas investment in new U.S. nuclear projects and expanding tax incentives for new manufacturing facilities.

We also need to capitalize on the fundamental efficiencies in the licensing and construction process to reduce the time to market from nine to 10 years to about six years. That will become possible after the first wave of licenses is granted and these plants are built. Achieving this is critically important because it will ensure that boards of directors, political leaders, policymakers and the financial community see demonstrable success and improvement in the cost and timing of new nuclear plant development.

As I mentioned, the administration’s budget request for fiscal year 2011 seeks an additional $36 billion in loan guarantee volume, on top of the $18.5 billion approved in 2005. We’re currently working with the administration and Congress on ways to account for this loan volume increase in the administration’s budget. 

We also believe that any new legislation should expand the production tax credit for new reactors. This tax credit was passed as part of the 2005 Energy Policy Act.  We are seeking to remove the 6,000-megawatt limitation on production tax credits and make the credit available to all reactors placed in service before 2025.

We also are working to enact a tax credit for the expenses of training workers for nuclear power plants and for facilities producing components or fuel for such plants. 

Federal tax stimulus would serve two purposes – accelerating capital investment in new nuclear power plants and in helping to create the critical work force and infrastructure necessary to build new reactors in the numbers required to reduce carbon emissions. 

Tax incentives would help develop highly trained personnel needed to build, operate and maintain new nuclear power plants, and restore America’s ability to manufacture the components and other equipment that go into nuclear facilities, thereby creating additional jobs. Already, the Shaw Group’s modular reactor component manufacturing facility in Lake Charles, Louisiana, and the Alstom facility in Chattanooga are benefitting from federal tax incentives.

We also believe it’s time for a renewed commitment to regulatory stability and certainty, including a more efficient and transparent licensing process. Greater certainty can be achieved by adhering to the NRC’s principles of good regulation – independence, openness, efficiency, clarity and reliability.  For new plants, this approach will eliminate redundancies and duplication in licensing and improving transparency without limiting environmental reviews or limiting public participation.

There is one policy that is part of the administration’s 2011 budget that we must work together to block.  The Energy Department’s budget recommends restoring the decommissioning and decontamination fund tax for uranium enrichment facilities. The federal government established the fund in 1992 to clean up Cold War-era uranium enrichment plants.

The industry – and its customers – has already paid twice for this program. The first time was part of the cost of fuel it purchased from the plants when they were operated by the federal government; the second as a requirement of the Energy Policy Act of 1992.

The administration proposed reinstating this tax last year, but it was blocked in Congress. NEI is coordinating the industry-wide effort this year to again block the $200-million-a-year tax that would extend through 2025.

It’s quite an understatement to say that this year has brought significant change to the nation’s used fuel management program. But within great change comes opportunity. 

We are working with the Blue Ribbon Commission established by President Obama as it explores alternatives for managing used nuclear fuel. In fact, we will brief members of the commission at its second meeting next week.

As I mentioned earlier, one of President Obama’s campaign pledges was to close down the Yucca Mountain repository project. The administration acted quickly, eliminating funding for the project in the 2011 budget and asking the Nuclear Regulatory Commission to withdraw the application for the repository, in a manner that would prevent reconsideration of the application in the future.

We do not support termination of the project.  However, given that is the administration’s intention, we believe closing it down should be handled in a manner that preserves all of the scientific and licensing data and in a manner that allows the licensing process to be resumed at a later date.

In the meantime, we support a three-pronged approach to dealing with used nuclear fuel.

• Safe, secure storage of used fuel at plant sites and development of centralized, interim storage of fuel at volunteer locations.

• Advanced fuel and recycling technologies to reclaim the additional energy that remains in used nuclear fuel and to reduce the heat, volume and toxicity of byproducts requiring disposal.

• Permanent disposal of the byproducts of recycling and used nuclear fuel in a deep geologic repository.

There are other issues related to used nuclear fuel, chief among them continued collection of the Nuclear Waste Fund fee, which funds the federal government for disposal of nuclear fuel and high-level radioactive waste. Every electricity consumer that benefits from nuclear energy production pays into the fund, which has a balance of more than $24 billion today.

Some months ago, we asked the secretary of energy to suspend collecting the fees for the Nuclear Waste Fund. He declined. Early last month, the National Association of Regulatory Utility Commissioners filed suit in federal court asking DOE to suspend collection of the fee. NEI filed a similar suit on behalf of the industry and we expect those cases to be joined for consideration in the Court of Appeals for the District of Columbia. 

As I mentioned earlier, we applaud President Obama for his appointment of three highly qualified commissioners to the Nuclear Regulatory Commission. We will be working with them to reduce the cumulative impact of regulation on an industry that has maintained an average capacity factor of 90 percent over the last decade – and had green indicators in 99 percent of all categories of reactor performance rated by the NRC in the fourth quarter of last year.

Our highest priority is maintaining safety and reliability in nuclear operations, and we recognize the importance of a credible regulator.  Nonetheless, the weight of overregulation can reduce our focus on those matters most important to safety and hinder efficiency and performance.

State policies have been an area of growing importance for NEI, and we are working collaboratively with our members on the state level on issues ranging from license renewal and new reactor development to uranium mining and water issues.

Our work takes place at several levels: building relationships with national organizations such as the National Conference of State Legislatures and the National Governor’s Association, and developing model policies encouraging nuclear energy that can be adopted by the states, such as a model construction-work-in-progress bill. Our media relations group briefs editorial boards and places op-ed pieces in local newspapers and NEI develops grass tops and grassroots assets that provide a broader base of support on our issues in key states.

The Clean and Safe Energy Coalition – led by Christie Todd Whitman and Patrick Moore – which includes current and former elected officials at all levels, environmental and conservation groups, African-American and Latino leaders, and scores of labor unions – and 5,500 members of the Nuclear Advocacy Network contact their elected officials, write op-eds, give speeches and participate in media interviews in support of our industry.

In conjunction with our member companies, we testify in hearings before state legislatures and public commissions, as we did recently in New Jersey on the proposal that the Oyster Creek plant add a cooling tower to enhance water quality in Barnegat Bay. We are encouraging states to repeal their moratoria on nuclear energy and supporting license renewal activities in several states.
 
This integrated state approach builds support among decision-makers at multiple levels that can be used to support our member companies in those states.  As important, we are developing a broad-based support network for our industry that can be brought to bear on federal issues that are before Congress or the Obama administration. 

Last month, President Obama brought together the heads of 47 nations to discuss nuclear security and nonproliferation at one of the most significant global summits held in Washington in decades. These global leaders agreed to increase controls over fissile material and to meet again in two years in South Korea to provide an update on their progress.

NEI, at the request of the White House, coordinated a companion meeting of more than 200 senior executives from 29 countries to discuss nuclear security issues as they apply to the commercial sector. After that conference, NEI led a delegation of industry leaders to meet with Vice President Biden and Energy Secretary Chu to discuss government and industry efforts to further safeguard nuclear materials.

The conference discussed sharing lessons learned in securing materials and strengthened the engagement between industry and governments as we work to improve safety and security.
 
As a result, NEI’s Suppliers Advisory Committee will develop recommendations for taking additional steps in securing nuclear materials used in commercial nuclear applications.

It must be clear to global policymakers and the public that because of control mechanisms in place, the peaceful use of nuclear energy does not contribute to proliferation.

There are other fuel cycle issues that NEI is coordinating on behalf of our members. The industry is working to:

• Ensure reliability of supply and certainty in the disposition of U.S. government uranium in the market.

• We seek trade policies that allow fair and open international competition.

For example, the U.S. Commerce Department’s statement of administrative intent for handling Russian uranium products was issued in March.  Contracts have been successfully completed between Russia and private industry for sale of Russian uranium in the United States. The industry is working with the Commerce Department to ensure that the process continues to function effectively.

• NEI promotes regulatory predictability for fuel cycle facilities and progress continues on several activities, like defining the regulatory framework for licensing the facilities necessary to recycle used nuclear fuel.  We are also working with our fuel sector members to develop appropriate NRC oversight program for fuel facilities.

Much of our success as an industry is built on relationships – relationships with the public, relationships with decision shapers and relationships with decision-makers. This certainly is true with our political leaders at all levels, with the regulatory bodies that oversee our industry and with key media outlets. We’re also building relationships with organizations – such as clean energy groups and environmental organizations– as we work toward our common objectives.

Relationship-based media outreach garnered important editorials in the New York Times and Washington Post in February after the president’s announcement of the loan guarantee for Southern Company. Editorial support from two of the nation’s leading newspapers was important both politically for the White House and to set the tone for other media commentary across the country.

Relationship-based media outreach builds what we call earned media – stories that support our key industry priorities and shape the public’s perception of our industry. One of the most important aspects of NEI’s media outreach is regular meetings with editorial boards to brief them on trends and issues within the industry. This earned media is complemented by an aggressive advertising and branding campaign aimed at Washington, D.C., policymakers. With targeted advertising in The Washington Post, Capitol Hill publications and websites, our advertising is getting millions of reader impressions.

Social media extends the reach of the industry and engages opinion leaders and the public in the dialogue. In addition to our public and member-only Web sites, we also host a blog that, in five years, has built a community of thoughtful people who engage regularly in discussions of energy and environmental issues. You can gauge its popularity by the frequency of this dialogue – almost daily postings – and the number of comments related to those postings.  We also participate as guest writers on other blogs, including an energy and environmental experts blog hosted by National Journal and Duke Energy’s energy and climate change blog.

We use Twitter to communicate breaking news and trends to an audience that includes members of Congress, Hill staff, environmental organizations, journalists and technologists. One interesting note: The careers and education section of our website has grown by 24 percent in the past year in terms of page views, a reflection no doubt of the growth in our industry and interest in work force opportunities.

NEI is helping its members expand key relationships with labor, environmentalists, African-American and Latino leaders and the public. One example here is NEI’s leadership with energy education center managers to improve, enhance and modernize these centers at nuclear power plants. These centers are important because they engage our primary stakeholder – the public.

They explain how our facilities work, demonstrate safety and security measures, and educate people on the importance of nuclear energy in a carbon-constrained world.  PSE&G deserves special mention here for all the help it has given this effort.  I encourage each of you to visit their exhibit outside this room that discusses their excellent energy education center.

Before I close my remarks, I want to thank all of you for your support of the many legislative, regulatory and communications initiatives that I have discussed this morning.  NEI’s accomplishments are not possible without the commitment and dedication of our member companies. An essential component of NEI’s value is our ability to draw on the combined talent, experience and innovation of our member companies to represent the industry in a variety of venues.

As I close, I have a few requests of you.

It goes without saying that the first and most important is to continue to operate your facilities safely and reliably. We have earned the public’s trust; we must constantly work to keep it. Safety is Job One in that respect.

Second, I hope you will increase your engagement in the policy and political environment in your state and with members of Congress. Invite policymakers to visit your plant – nothing will create a more favorable impression of the industry than seeing firsthand how our facilities operate and meeting our people that have such a personal commitment to safety and security.

Third, as the Digital Age accelerates, adapt to the changing role of communications. It is possible now to be wherever your public wants to find you, whether it’s face-to-face engagement that builds important relationships or virtual communities on the Web. You should communicate with your key stakeholders every way you can. You have a good story to tell. Be open and share.
 
And finally, we should always remember that the whole of our industry is greater than the sum of its parts. We are most effective – on every front – when we are working together as an industry. We see evidence of this on a regular basis and I want to thank the people in this room for your support of NEI over the past year.  We look forward to even greater success in the months to come.

Thank you.