Good morning, everyone. It's certainly a pleasure to be back here with you all again and to have a chance to participate with this very distinguished group.

Well, like many of you, I have the responsibility for maximizing the return on our corporate assets. And, of course, as we all know, we are managing these assets today in a rapidly changing electric utility industry where uncertainty seems to be the only constant.

And, of course, among the most rapidly changing areas in our business, arguably presenting the greatest uncertainty, are the variables surrounding the U.S. nuclear industry. So that's why I'm here today to discuss an approach that we've taken to managing these changing variables.

At last year's NEI conference, I shared some of my thoughts on a different strategy. Today I'm happy to be able to describe in greater detail how this approach is now in motion. And if you invite me back next year, I'll tell you how well these initial steps performed against our very high expectations for them.

Let me use just a quick mountain climbing analogy. I would say this: As we look at the challenge of maximizing the value of our nuclear assets in a changing industry, we find ourselves poised on the precipice of change. And mountain climbers tell me that when standing on a precipice, life seems to be both perilous and exhilarating at the same time.

Well, I imagine that's what many of us are thinking and feeling these days as we stand on the precipice of real change in our industry. Because we all know well the perils of a management slip in strategy and decision-making or in execution that can send us tumbling and literally threaten the economic life of our enterprise.

The view I see from here is challenging, certainly, but full of opportunity. And I'd like to share with you what I see unfolding around us. I would like to specifically tell you about the one down-to-earth view of a nuclear management company that NSP jointly formed with three other utilities in Wisconsin and Iowa to maximize the value of our nuclear assets during the changing times ahead.

First, let's look at how we got here, the routes we chose and the obstacles we had to overcome. In many ways our companies vertically integrated monopolies operate differently from most corporations. We are like conglomerates, each owning parts of distinct business. Generation, including nuclear generation, which is a distinct business in its own right, as we know, along with transmission and distribution.

And as we also know, conglomerates do not generally perform as well or command the same type of price earnings ratios that highly focused organizations do. The model that we seek to move forward is to build on the long and successful history of cooperation in our industry.

And despite our history of cooperation, we have never fully explored the great untapped potential for solving problems and really maximizing our performance.

For example, most utilities with nuclear plants operate one unit or small dual units. But we all operate these units with a full top management team and a chief nuclear officer. Collaboration can help us to figure out how to spread those significant costs over more installed megawatts.

And regulation, as Chris described today, is certainly on the right and a positive track. The fact is, regulatory costs are also rising. And the new regulatory model requires more sophisticated planning and operations modeling than ever before. And we need to find a way to spread those costs over more capacity as well.

Our underlying fixed cost structure was established under state regulatory regime where rate of return regulation masks the inefficiencies that the system created for us. We have to leave that thinking behind and get our operating and financial foundation shored up in order to operate and compete effectively.

So when we look at the current model, I see that the nuclear industry is not effectively organized. Plant ownership is fragmented. Resources are diluted rather than focused. And there's no critical mass of top performers operating together to find new and better ways.

So as growing operating and regulatory costs continue to penalize small operators, we've seen the sale of nuclear plants that reflect deep discounting of asset values.

Now, sales under these conditions may reflect a desire to get out of the nuclear business. But where is the return for the shareholder in that scenario? These sales make shareholders vulnerable to losses unless states accept some responsibility for the inefficiencies of the past and provide favorable treatment going forward.

What we must do is develop strategies that allow us to take more control of our own future. The opportunity for creating value in our nuclear plant assets has never been greater. What is needed to achieve it is bold and effective management in the face of uncertainty and hostile elements.

Now, let me get back to what NSP is doing working with other companies as we've mapped the new model, and how we believe it can lead us, and maybe your companies as well, to greater shareholder value, stronger performance and a brighter future for nuclear energy.

NSP is working with Wisconsin Electric, Wisconsin Public Service and Alliant Energy, with a total of seven nuclear units, to create new options and choices. And in developing our nuclear management company, which we announced in late February, I've seen a good concept made better and better when talented nuclear managers focus their attention and their ideas. And I think there is a great deal of potential in this approach and in the collaboration which is at its core.

Now, the goal of our new nuclear management company is to manage our plants in the top quartile of the industry. And to sustain that standard of performance even as overall industry performance continues to improve.

Here is our concept in a nutshell. We have identified a number of operational areas that can benefit from economies of scale and fleet-wide application of current best practices throughout our plants. We have identified a services package that will deliver those best practices to all our plants at a price point that is more favorable than our current options. We are going to use employees who are most experienced and best able to implement and manage these new approaches under service contracts to our plants.

We're starting with those services that offer the greatest margin for gain in the short term. And we'll continue to roll in additional service packages over time where incremental efficiencies can sustain high safety levels, improve efficiency and enhance reliability.

Our companies are committed to using these shared services when they can provide economies and improvements in each of our operations.

This nuclear management company strategy will allow us to take advantage of economies of scale and purchasing. It will help us spread our regulatory and management overhead more efficiently. And it will help us identify and then efficiently implement best practices across a broader megawatt base to optimize performance.

It will consolidate nuclear operations under a specialized management team focused purely on the unique needs and opportunities of this industry. And will create new opportunities for employees which will help us retain and attract the best in the industry.

And just as importantly, this approach gives each of the CEOs greater flexibility, more choice, and better options compared to operating independently. Our regulatory relationships should improve with a single point of contact.

And our ability to clarify issues and influence state regulations should be improved with these important assets consolidated in a management perspective. In addition, we increase our choices and options for services that are currently provided outside our plants. And we also create totally new choices, such as the option to transfer operating authority for the plants with important flexibility over the timing of those decisions.

With all these anticipated benefits, this new approach also offers our shareholders, employees, and customers something that is not all that common in the nuclear industry today, and that is a growth business … rather than one filled with concern about eminent decline.

This affiliation can also give us options down the road to jointly manage nuclear assets if we decide that is beneficial. That option would be based first and foremost on successfully getting the managed services and shared operations right for the fleet that we have now.

If that works the way we expect it to, we'll have other options open to us. Among them, to jointly own the plants already under our services operation. Or we could seek to attract plants from others who want to bring more value to their shareholders as well.

What's important at the end of the day is that for our plants this has turned an uncertain future into an operating profile with greater operating efficiency, more choices, new flexibility in mapping our own course and a viable growth orientation.

I believe these are just the first steps that allow us a compelling glimpse of a new and revitalized future for nuclear energy in the U.S. If all of us can create new choices and flexibility to manage our current plants efficiently, these plants will have demonstrated they are fit to play an important part in our nation's energy future.

The promise of zero greenhouse gas emissions technology can help us safely meet our nation's future energy needs, benefiting from nuclear energy's favorable environmental profile and its unchallenged reliability. And we will have improved our political influence.

Well, there's no question that the climb ahead will be just as tough as this one. There are plenty of obstacles along the way, unpredictable political whims, hard-core opponents who want to see us fail. And we have to be realistic about that, but we don't want to lose our perspective.

On our side we have millions of Americans, a solid majority who want to see us succeed. They believe in our mission and believe it is good for them, for their families and livelihood and for the communities where they live. They want to see our shareholders earn a profit by providing a safe, reliable, and environmentally responsible of electric power to support our Nation's continued growth and prosperity.

And we know and we can help those supporters understand that the United States can't meet the commitments we've made on reducing greenhouse gases without maintaining or even expanding our nuclear generating capabilities. And we understand that our existing nuclear capacity cannot be replaced under the planned schedule. And we fully understand that even if new facilities could be built in time, none offer the reliability and capacity we need without severe environmental effects.

And we want to remind people that the technical solution for our spent fuel disposal problem is at hand. And all that is lacking is the political will to implement it.

Recent talk from this administration about taking title to the spent fuel is, I hope, a sign of progress. But it's far from a solution. What our states want and have a right to expect is that the Department of Energy meet its long overdue obligation by not only taking title, but also by taking possession of the spent fuel by an enforceable date certain and removing it from our plants.

Nothing less is sufficient to address the needs of our Prairie Island Plant in Minnesota or the needs of many of your nuclear plants throughout the country. That is the DOE's primary obligation to our citizens, our companies and our plant community. And we cannot allow meaningless illusions of progress to be substituted for real solutions to the problem.

I encourage you to continue your pressure and support of positive action on the nuclear waste legislation pending in the House and Senate. Imagine how quickly this issue could be handled if we had an administration a secretary of energy who wanted to resolve the issue.

Nevertheless, I'm optimistic and believe our collaboration on this point can yield positive results.

Nuclear power has a vital and important role to play. And as managers of those assets, we have a responsibility to get our management practices and strategies fine-tuned for a competitive energy market. And we have a related responsibility to persuade our customers, community, and elected officials that nuclear power has earned a prominent place in the energy future of our country.

In closing, I think at times it can feel discouraging to look at the challenges we face. But I was struck by what seemed to me a very optimistic observation from the world of geology. My thought is a lesson that we can reach great heights no matter how far we have to go to achieve them.

As it turns out, the rocks at the very summit of Mt. Everest, the highest point on the planet, are made of marine limestone formed at the bottom of the ocean. Surely in our climb, we won't have to go that far.

Thank you for inviting me here today.