Good morning. It is my pleasure today to speak about "America's Nuclear Energy Renaissance." Some may ask whether, in light of the events of last fall, that title is still appropriate.

I am pleased to be able to tell you, it is. The renaissance continues, and if anything is more vibrant than ever. Certainly, nuclear plant security has become a major issue in the United States, and I will address that. But there have been many other positive developments, such as the recommendation from the Secretary of Energy and the decision of the President that we go forward with a used fuel repository at Yucca Mountain, Nevada.

Nuclear energy is thriving in the United States. Our industry has emerged from a period of great national crisis with continued strength, and unlimited promise for the future.

The presentations at this year's WANO meeting are evidence that this is a nimble, resilient industry-proven by time, broadened by experience — even experiences such as the concern that followed the events of September 11 — and despite those events, an industry focused on the future.

For that, we salute WANO, with its commitment to operational excellence and its emphasis on sharing safety information - the foundation on which all our progress is based.

I also want to salute all of you. Because of your leadership and commitment to safety in plant operations throughout the world, the nuclear energy industry is enjoying unprecedented success.

In fact, it is because of our industry's proven record of operational safety that I have the opportunity to speak to you today about the renaissance for nuclear energy in the United States.

I was asked to discuss the conditions that have changed within the nuclear energy industry in the United States—the conditions that have led to our renaissance. There are four key elements:

1. the improved performance and production of America's nuclear plants and the changes this improvement has made possible;
2. nuclear energy's important role in environmental protection - particularly our air quality;
3. the renewed recognition of nuclear energy's value by the public, the media and U.S. policymakers; and
4. the new strategic plan of the U.S. industry-most recently embodied in Vision 2020. This plan will guide America's nuclear energy industry over the next 20 years.
   

U.S. Plant Performance in Context
The first two years of the 21st century have been among the most exciting and positive for nuclear power in the last two decades. For much of this time, the dominant nuclear story in the media has been nuclear energy's rebirth.

Why all the attention now?

Certainly, it's a great technology-safe, reliable, competitive and environmentally clean. But the single biggest reason that nuclear energy is seen in a more favorable light in the United States is the outstanding performance of our 103 nuclear power plants.

In 2000, the average capability factors of U.S. reactors reached a record level of 91 percent. And preliminary numbers show that 2001 brought yet another new record. The last decade has seen significant achievements in performance that have given the industry considerable reason for pride.

Most importantly, this lengthy run at record capability levels is indicative of a standard of performance that has helped to reduce significant plant events, as measured by the NRC, to a record low level-a decline of 97 percent over the past 15 years. As Vice President Richard Cheney noted last year, commercial nuclear energy is "one of the safest industries around."

Estimates show that U.S. reactors generated a record 762 billion kilowatt-hours of electricity last year, topping the 754 billion of 2000 — itself a record — and 12 percent more than in 1998. The rise was despite a recessionary economy and quite mild weather that dampened demand for electricity in the second half of last year.

The increase in nuclear energy generation over the past decade is the equivalent of bringing 23 large power plants on-line. This additional generation met approximately one-fifth of the increase in total electricity demand over that period, safely and reliably.

As output has increased, the production costs for U.S. reactors have decreased. Production costs include operations and maintenance costs, fuel costs, costs to dispose of used nuclear fuel and costs to decommission the units. In 1999—the latest year for which we have complete comparative data—nuclear energy's production costs were 1.83 cents per kilowatt-hour, well below the costs of competing fuels. In 2000, we continued to lower the bar, at 1.74 cents per kilowatt-hour, and we expect to beat that again when the latest complete year's data come in.

The price stability for nuclear-generated electricity is a very attractive selling point in our digital economy...and companies are locking into long-term contracts with generating companies with nuclear assets because of this combination of price stability and reliability.

The record of outstanding nuclear power plant safety and performance helped set the stage for important changes in the way nuclear plants are regulated in the United States.

Nearly two years ago, the U.S. Nuclear Regulatory Commission began implementing a new reactor oversight process that builds on decades of safe nuclear plant operating experience.

The new reactor oversight process is more effective and efficient because of its sharper focus on those areas of the plant most important to safety. It also is a major step forward in making a complex, technical process more transparent to the public.

The level of NRC resources to be applied in oversight depends on how well a plant meets the established safety criteria as measured by 18 performance indicators. The new process establishes specific performance thresholds focused crisply on safety while allowing companies to choose their own path to meet them.

The performance is graded in four bands, green, white, yellow and red. As you can see, our plants are doing quite well - and their performance continues to improve beyond our industry goals.

Increased regulatory consistency and predictability are also hallmarks of the NRC's process for renewing the operating licenses of today's reactors for an additional 20 years beyond the original 40-year license.

Thanks to improved approaches toward evaluating aging plant systems-and improved communication of lessons learned by the industry and the NRC-the process has become more efficient. In addition, we are incorporating lessons learned into the process, including the resolution of generic licensing issues for all future license renewal applicants.

Their level of performance, safety and forward price stability have placed nuclear plants among the most prized assets of electricity companies in the U.S. It has also made the decision to extend nuclear plant licenses almost a foregone conclusion, especially given the improvements in the NRC process.

The operating licenses for eight reactors have been renewed as of January. Renewal applications for 14 reactors are under review, and the owners of 24 additional reactors have announced schedules for submitting renewal applications within the next three years. We expect all U.S. reactors to renew their licenses.

Environmental Value
Nuclear energy, our only expandable source of baseload electricity that is emission-free, has proven benefits for protecting our environment. In fact, U.S. nuclear plants are responsible for the largest share of voluntary carbon reductions in the U. S. Department of Energy's carbon reduction program. Since the 1970s, nuclear power plants have played a pivotal role in meeting the emission reduction requirements of U.S. environmental laws.

As the International Nuclear Forum has noted, nuclear energy is part of the solution when it comes to mitigating carbon. I'm pleased to report to you that our government-including President Bush and Vice President Cheney-recognize that. The Administration has provided strong support to nuclear technologies that can avoid greenhouse gas emissions as part of our national energy policy.

We simply cannot eliminate greenhouse gas emissions and increase electricity supplies without the expanded use of nuclear energy - as has been well recognized by many Asian and European governments, as well.

Unprecedented Public, Media and Policymaker Support
The benefits that nuclear energy has offered for generations are becoming more well-known. In fact, they are among the primary reasons for expanding support for nuclear energy in the United States.

Today, there is unprecedented recognition among the American public and policymakers that nuclear energy is vital for our nation's energy and environmental future.

According to a national survey in January of this year, seventy-five percent of the American people think that nuclear power should play an important role in meeting America's future energy needs, and 87 percent agree that nuclear plant licenses should be renewed.

Support for definitely building new nuclear power plants was 56 percent in January. That is slightly lower than in the poll of last October, but is up from 42 percent in October 1999.

Prior to September 11, nuclear energy was enjoying an outpouring of the kind of positive media attention we had not seen for nearly 30 years. During the first half of 2001, virtually all of the major television networks, radio news networks and news publications in the United States carried stories about the "rebirth" of nuclear energy.

Not surprisingly, many electronic and print media stories took a more somber tone after September 11. U.S. nuclear plants were prominently mentioned as potential terrorist targets. Since that date, NEI has coordinated industry efforts to enhance security both to allay public fears and to prevent hasty or ill-considered actions by the government.

U.S. nuclear plants have been at the highest level of alert since September 11. As you know, our plants are robust physically and are well protected by highly trained and well-armed security forces of over 5,000 officers.

We have been working closely with government at all levels — including the new Office of Homeland Security - to forestall ill-considered and hasty actions, and to coordinate the development of a seamless responsibility for security among local and state law enforcement, the private sector, and the military, if necessary.

I think that our efforts are having the desired effect of reassuring the public, as shown by the opinion polls I mentioned earlier.

The security concerns that have followed September 11 have cast new light on another major issue-storage of used nuclear fuel. Although nuclear opponents are trying to portray a repository for used nuclear fuel and defense waste as a prime terrorist target, overall the focus on security has been positive. The weight of opinion seems to be that a single, 1,000-foot deep repository would be preferable to used fuel in temporary storage at commercial nuclear sites and defense waste sites in 39 of our 50 states.

Whether or not security concerns are providing impetus, the repository is close to becoming a reality. Earlier this year, Secretary of Energy Spencer Abraham said that he would recommend to the President that the Yucca Mountain site in Nevada is suitable for an underground repository. That culminated a 20-year, $7 billion scientific and engineering evaluation by the Energy Department. The President then decided that construction should begin on the Yucca Mountain repository. Nevada is expected to exercise its right under the law to challenge the site designation. Congress then must vote to approve the site over Nevada objection, by a simple majority of each House. When that happens, the Yucca Mountain repository will move from the political process to the Nuclear Regulatory Commission licensing process.

The commitment to move forward on Yucca Mountain is only one example of the impetus nuclear energy is gaining from its support by the Bush Administration. Nuclear energy has a prominent position in the Administration's energy policy, announced last May.

Vice President Cheney discussed the importance of nuclear energy in the administration's energy policy last May at NEI's annual conference in Washington. The vice president was forthright in his support for nuclear energy, which he called a "reliable, affordable and environmentally sound policy going forward."

The Administration's 2003 budget underscores that commitment, with among other increases a quadrupling of government funding for the Nuclear Energy Technologies program, which promotes the development of nuclear energy systems. Waste repository funding rises 40 percent in the budget.

We also have seen increased Congressional support for nuclear energy. Legislation has been introduced that would encourage increased production from nuclear power plants, expand research and development of new reactor technologies, and ensure a viable domestic nuclear fuel industry and educational support system.

There is also legislation that labels nuclear energy an "environmentally preferable" electricity technology, expands research and development on innovative used nuclear fuel management solutions, reforms outdated NRC rules and procedures, and seeks to reverse the decline in nuclear scientists and engineers in the United States.

Many of these provisions were combined into landmark energy policy legislation that passed the House of Representatives last August. The Senate is considering similar legislation, but it remains unclear whether the Senate will enact comprehensive energy policy legislation because of debate over non-nuclear issues - principally automobile fuel efficiency standards and drilling for oil in the Arctic National Wildlife Refuge.

Notwithstanding these controversial issues, we expect that energy policy legislation containing positive nuclear provisions will be enacted in the end and will provide another strong endorsement from our leadership to the public, financial community and the industry that nuclear energy is an important part of our nation's energy future.

Vision 2020: Nuclear Energy is Poised for the Future
The foundation is in place in the United States for expanding the benefits of nuclear energy far into the future. And the United States and other growing economies will certainly need nuclear energy in the future.

The U.S. Energy Information Agency projects that the United States will need an additional 393,000 megawatts of electricity to meet a modest growth rate in electricity demand of 1.8 percent annually over the next 20 years. That would add 50 percent to our national grid. And that level of increase assumes a growth rate that is actually slower than the 2.2 percent growth in electricity demand that the U.S. has experienced over the past decade. If the growth rate is 2.5 percent, we will need to increase our grid by over 70 percent.

Our future demand for electricity will be great, which means our industry's need for a solid strategic plan to meet that demand is even greater.

The new world our industry has entered requires a bold new strategy for continued progress. To that end, the U.S. nuclear industry has developed a set of ambitious and specific goals to carry us forward for the next two decades.

We call this plan "Vision 2020."

The centerpiece of our vision is dramatic. Between today and the year 2020, we plan to add 50,000 megawatts of new nuclear generating capacity to the nation's electricity grid, with another 10,000 MW added through upgrading the technology and improving the efficiency of our current reactors.

Although this is an ambitious goal, 50,000 megawatts of new nuclear capacity-combined with anticipated capacity factor and efficiency gains-is simply what it will take for the U.S. to retain the 30 percent share of all emission-free generation that exists today.

Energy and environmental policy are becoming inextricably linked in the United States. And if we want to increase our share of non-emitting electrical generation beyond 30 percent, nuclear energy must be the central component of the strategy...along with complementary energy sources such as renewables and hydropower.

Another vital element of Vision 2020 is that within the next two decades "policymakers and the public will be demanding further increases in the share of sustainable nuclear energy to satisfy economic growth and environmental objectives."

This public demand for an increased role for nuclear energy will grow, because adequate electricity supply and growing the economy go hand-in-hand. An economy that increasingly relies on computers and electronic devices simply must have an ample supply of electricity to power those devices.

The third important element of Vision 2020 is that by the year 2020, "Nuclear technologies will be widely used in medicine, food safety, water management and to produce complementary clean fuels such as hydrogen."

Prepared for a New Era Internationally
Vision 2020 is an ambitious undertaking for the U.S. nuclear industry, but our success in achieving this vision relies on the continued success of operators throughout the world.

I applaud the efforts taking place worldwide toward building new reactors. New reactors have come online from Asia to South America. And across the globe, countries whose nuclear power programs were on hold are now taking a second look at building new facilities. We are very encouraged by the recent announcement in Finland.

On that front, I want to salute our Korean hosts for setting a strong example for us all as they carry out their national program to develop and build new nuclear plants. Mr. Choi, your program is a model that other nations could emulate in their own nuclear programs.

Our industry is entering an exciting new era of international cooperation. Nearly every major nuclear energy project under construction around the world today is the result of extensive collaboration among international partners.

And as the world's knowledge of advanced reactor concepts improves, our ability to use those designs safely and effectively to meet our growing energy needs also is improving.

In the United States, we already have new legislative and regulatory processes for building and licensing new nuclear power plants. This new framework includes provisions for pre-certification of advanced plant designs and approval of nuclear plant sites in advance of decisions to build.

We have several major ventures in the works to deploy new plant designs in the United States and validate the new regulatory approaches.

As the industry's renaissance gains momentum, there is one more element that is crucial to our success, and that is communications. One example of the kind of communication outlet the industry has established is NucNet. Remy Carle, whom many of you here know, was one of the founders. As NucNet has grown, like the industry it has also changed. It is now a global nuclear industry newswire that is used by members to bring positive stories to the attention of key news outlets.

I encourage you to share the good news about our industry through organizations like NucNet among ourselves and with others - including the public, the news media and elected officials.

Conclusion
Our industry is poised for a new era worldwide.

In the U.S., the broad recognition of nuclear energy as a core element of a national energy policy has placed an awesome level of responsibility on our domestic nuclear energy industry.

Clearly, the nuclear energy industry in the United States ... as never before ...is an essential partner in putting in place a sound energy policy with a diverse mix of fuels and a commitment to preserving our environment for future generations.

To realize our vision, we must:

• Continue to operate our plants safely and efficiently
• Maintain steady progress toward a first-of-a-kind repository for used nuclear fuel
• Ensure a stable regulatory framework that recognizes nearly five decades of industry experience, and
• Gain stronger recognition for nuclear energy in U.S. energy and environmental policy

In closing, let me again acknowledge WANO's contribution toward improving plant operational safety.

Without our collective and absolute commitment to safety, the promise of nuclear energy for future generations around the world will evaporate before our eyes.

Thank you for your vital role in the nuclear energy industry's renaissance and your dedication to meeting the challenges of the future.

Together, we can and we will realize the great promise the future holds for our industry. Thank you.