I am delighted to be in Nice and to address this session of the European Nuclear Congress. It is only fitting that we are talking about nuclear energy's future here in France—a country where this industry has deep roots ... beginning with the work of Henri Becquerel and Marie Curie. Today, the precedent set by these pioneers continues with the success of France's ambitious nuclear energy program.

This enterprising spirit is the focus of my remarks this afternoon.

As I have said a number of times in the past year, the future of nuclear energy is brighter than ever. Especially, I believe, in the United States.

My optimism stems from three developments.

The first is deregulation of the U.S. electric generating industry. I am convinced that with the introduction of retail competition, many ... if not most ... nuclear plants will be highly attractive assets.

The second reason for my optimism: the growing concern about greenhouse gas emissions and other air pollutants ... and the fact that nuclear plants are emission-free.

The third reason I'm optimistic involves nuclear waste disposal. Despite the long, difficult road we've traveled in the United States, I see signs of progress.

Allow me to elaborate on these points of optimism.

First, I would like to discuss the impact of deregulation. A few years ago, many analysts forecast that the remaining debt on nuclear power plants would make them too expensive to compete with coal- and gas-fired generation. In reality, though, invested costs will be covered ... and the basis of competition will be the marginal costs of production.

Today, experts realize that competition actually helps nuclear plants to thrive. That's because in a competitive marketplace, debt related to capital costs will be a minimal part of the equation. Everyone will be selling electricity based on "going-forward" costs—production costs, incremental capital spending, general and administrative expenses, and profit.

The introduction of competition is great news for our industry, since U.S. nuclear plants are running better than ever. In 1997, operating plants achieved a record capacity factor of 77.8 percent. That record efficiency, in turn, pushes costs down. Today, only coal-fired plants have lower production costs than nuclear energy ... and the difference is negligible.

This summer, we got another indication of nuclear energy's bright future, when AmerGen announced it would buy the Three Mile Island plant. Those behind this joint venture between PECO Energy and British Energy obviously know that well-run nuclear plants will be moneymakers.

Competition also makes license extension in the United States highly desirable for many nuclear operators. The reason is simple: It costs considerably more to build any type of new generation—fossil or nuclear—than to run a nuclear plant for an additional 20 years.

A second factor in our favor is the growing focus on clean air. If U.S. policymakers are serious about reducing the emission of greenhouse gases and air pollutants, emission-free nuclear energy must remain a substantial part of America's energy portfolio.

Moreover, we must give nuclear energy serious consideration when the United States begins to replace its aging baseload generating plants. I am happy to report that we have three next-generation U.S. designs already approved by the Nuclear Regulatory Commission, so we will be ready when that time comes..

Given nuclear energy's crucial role in maintaining a clean environment, it is incumbent upon the United States to deal with what some call our "waste problem."

First, let me say I don't believe we have a waste problem.

Spent fuel from America's nuclear power plants is ... and always has been ... safely stored and monitored by our electric utilities.

So our problem in the United States is not our ability to handle our spent fuel. Our problem is political.

For any of you who have observed our government in action, that may not come as a surprise. We have a saying in Washington ... There are two things you do not want to see being made: sausage and legislation.

Let me assure you: In the United States, nuclear waste legislation has not been a pretty sight.

For nearly 45 years—since President Eisenhower signed the Atomic Energy Act of 1954—the federal government has had the responsibility for managing and disposing of high-level radioactive waste.

And on numerous occasions, the government has reiterated its responsibility.

Here are just a few examples:

In 1970, the Atomic Energy Commission said disposal of high-level waste "will not be permitted on any land other than that owned and controlled by the federal government."

In 1977—the same year President Carter suspended reprocessing of used fuel in the United States—the Energy Research and Development Administration said the federal government would select a repository site in 1978 and begin operation in 1985.

Five years later, no site had been selected. That prompted Congress to pass the Nuclear Waste Policy Act of 1982, establishing a reciprocal arrangement: The Energy Department would begin accepting spent fuel by 1998. In return, the federal waste program would be financed through utility payments to the Nuclear Waste Fund. To date, customers of nuclear-generated electricity have helped build a $15 billion waste fund.

In 1985, President Reagan decided that ... for "reasons of economy" ... federal repositories would accept both commercial and defense nuclear waste.

Then, in 1989, the Energy Department promised an aggressive schedule to ensure spent fuel acceptance in 1998.

However, as we got closer to 1998, it became apparent that the government would not meet its deadline.

The reality is that in 1982, when Congress passed the Nuclear Waste Policy Act, we were about 15 years away from having a repository. And today, nine months after the Energy Department missed its deadline, the United States is still about 15 years away from opening a repository.

Some of you probably wonder why the United States just doesn't reprocess its spent fuel.

The simple answer is: Our government decided in the late 1970s that we would use a once-through fuel cycle. Relying on advice from our best scientists, the U.S. government also decided to narrow its search for a repository site to a remote desert location known as Yucca Mountain in Nevada, which borders California. After spending two decades and billions of dollars to study Yucca Mountain, direct deep geologic disposal remains our nation's policy.

The reason for not reprocessing is not that simple, however. In fact, the complexity of the issue might be growing. There is an emerging sentiment that ... one day ... the United States might want or need to extract the remaining energy trapped in the spent nuclear fuel.

I am not going to argue that one policy is right and the other is wrong. Long-term storage and disposal has its merits. Today, the cost of recycling is about three times that of a once-through fuel cycle. At the same time, we all know that spent fuel retains a tremendous amount of energy—and value. Perhaps one day, the economics and fuel supply lines will converge, and the United States will begin to recycle spent fuel.

Until that time, we need political leadership to complete the journey envisioned by President Eisenhower and mapped out in the Atomic Energy Act and the Nuclear Waste Policy Act. We need President Clinton, Vice President Gore and our new Energy Secretary, Bill Richardson, to join with Congress. We need them to develop an integrated spent fuel management program.

We have support—strong support—for an integrated spent fuel management system. Since 1995, Congress has worked on legislation to establish an interim storage facility until a repository opens. Seventy percent of the U.S. Congress has voted to reform our waste management program.

Unfortunately, this year's effort to reform the nuclear waste program died—a victim of an unrelated political battle and a continued veto threat by President Clinton.

Despite that setback, the nuclear industry is not giving up. And neither are our supporters.

We have assurances from the top leaders in the House of Representatives and the Senate that nuclear waste reform will be on their agendas early next year.

We also see mounting pressure from state utility commissioners. In recent months, states have begun to prepare to cut off payments to the Nuclear Waste Fund ... and put that money in escrow ...until the Energy Department meets its obligation.

Finally, dozens of states, public utility commissions and electric utilities are suing the Clinton administration. They want the government to live up to its responsibility.

This issue will not go away. And for good reason: This is not just a commercial utility issue.

This is a national issue.

It is an issue that affects 41 of the 50 states. Many of those states—because the government has not met its obligation—have become de facto repositories for spent fuel from more than 100 commercial nuclear units. Many states are also storing high-level waste from the Energy Department itself and from our nation's defense activities.

Clearly, this is not just the industry's problem. This is an issue with many facets.

Fortunately, the talent devoted to solving the issue ... the technical prowess developed to date ... and the growing support to enact legislation paints a bright picture for the future.

All things considered, I'm optimistic that the United States will resolve the spent fuel management issue.

As I said, we expect some action in Congress next year. We have broad and increasing support from state regulators. We have the support of newspapers across the country. And millions of Americans support our position.

They all agree that until a repository opens, the federal government must build an interim storage facility. There, the spent fuel from more than 100 nuclear units would be consolidated in one easy-to-monitor location.

The legislative reform that Americans want would do that ... and much more. Legislation would also ensure safe transportation of spent fuel ... it would provide funds to train and equip safety personnel ... it would establish a reasonable radiation standard to protect the public ... and, perhaps most significant, legislation would ensure that on-going work at Yucca Mountain would not be compromised by an interim storage facility.

Millions of Americans want Congress and the administration to do the right thing. They want the government to fulfill its legal obligation to manage high-level nuclear waste.

There is another reason I am optimistic: We have some encouraging science coming out of Yucca Mountain.

We get so caught up in the political debate that it is easy to forget the first assessment of Yucca Mountain is due out before the end of the year. This so-called viability assessment will help the Energy Department decide whether Yucca Mountain will pass scientific muster as a repository site. Early indications are that we will get a favorable report. It might point to additional studies that are needed to prepare a license application. But we do not expect any show-stoppers in this assessment.

What makes me so confident? I've been to Yucca Mountain eight times during the past 10 years and have seen the tremendous work going on there.

The U.S. government has spent $3 billion and more than 20 years studying this piece of remote desert property. In the process, we have learned more about its "ologies"—geology, hydrology and seismology—than perhaps any place on Earth.

The Energy Department has built a huge scientific laboratory inside the mountain. One of the highlights of the program came in April 1997, when ... after two and a half years of excavation ...the department completed the Exploratory Studies Facility.

This laboratory is unlike any that I have ever seen. It is a tunnel five miles long and 25 feet in diameter. Here, scientists are studying the flow of water and air, and the past movement of this volcanic rock. Scientists have also installed heaters in the tunnel to simulate the reaction of rock and water to the heat released by spent fuel in a repository.

This is science of the highest caliber.

And after years of intensive study, the department's scientists have yet to find a reason to stop developing a repository at Yucca Mountain.

This is why I am confident.

Still, all the confidence in the world will not solve the immediate problem. What we need is action.

On that front, I think the nuclear industry is about to get some unexpected—though certainly welcome—help.

In the United States, we are seeing a convergence of opinion in favor of nuclear energy.

One reason for this emerging support is concern for the environment—chiefly, concern about greenhouse gas emissions and air pollution.

As we all know, nuclear energy is the world's largest source of emission-free electricity generation. I am happy ... no ... I am thrilled to report that policymakers and the public have awakened to this fact. They understand that to have clean air, we must continue to operate our nuclear plants. We must support license extension. And we must plan for new plant construction.

Another reason for this convergence of opinion is the need for a diverse energy portfolio—a point that was hammered home 25 years ago, during the Middle East oil embargo.

While coal will continue to generate the bulk of U.S. electricity, and natural gas is industry's new fuel of choice, policymakers recognize that nuclear energy must have a prominent seat at the table.

Last fall, for instance, the President's Committee of Advisors on Science and Technology recommended increased federal support for nuclear energy. The reason: So we can continue to enjoy nuclear energy's emission-free benefits.

This year, Congress agreed. Lawmakers teamed up with the Energy Department to launch the Nuclear Energy Research Initiative—a program designed to develop advanced reactors that are passively safe, proliferation resistant and waste minimizing. At a time when Congress is trying not to fund new programs, support for this initiative is solid evidence that policymakers recognize the crucial role of nuclear energy.

This convergence of opinion also includes support from the financial community. As I mentioned earlier, the United States is on the verge of restructuring its electric generating industry to allow retail competition. With nuclear power plants becoming more efficient, Wall Street analysts are again bullish on the future of nuclear energy in the United States.

For all of these reasons, nuclear energy has a bright future in the United States.

And for all of these reasons, we must—and we will—resolve the nuclear waste issue.

Nearly 45 years ago ... when President Eisenhower launched the Atoms for Peace program ... the United States became the pioneer in this technology. Since then, we have developed the largest nuclear energy program in the world. In a similar way, we are paving the way for disposal of spent fuel.

When I think about how far we have come ...I am confident we are on the right course to resolve the waste disposal issues that remain. But I am also aware that the waste issue intertwines science, engineering and politics—past, present and future.

For that reason, I am not over-confident.

That is why the Nuclear Energy Institute ...on behalf of the U.S. nuclear industry and all Americans ...will continue to work with Congress and the Clinton administration to resolve this issue.

At NEI, we recognize that nuclear energy is all too important an asset for the United States to squander.

For a diverse energy supply ... for a clean environment ...and most important ... for our children and grandchildren.

We must do what is right.

We must finish our work on nuclear waste disposal.

And we must keep nuclear energy alive so others can enjoy the benefits of this incredible technology.

We must.

Thank you.