Thank you. I want to do two things in my time with you today.

The first is to express my admiration for Minister Wilson’s leadership and foresight in formulating Britain’s energy policy for the 21st century. It takes a rare blend of courage and pragmatism to make the hard choices on energy, but of course it is necessary to make the hard choices in order to put forth a policy that will actually work. Minister Wilson has recognized the value of nuclear power both to Britain’s electricity supply and its environment, and this country of my forefathers will be the better for it.

The second thing I want to do is to change the title of my presentation. If you’ll notice, it reads, “The American Scene: A Nuclear Renaissance (question mark).” Let me remove the question mark. There is no question about it – we are experiencing a nuclear renaissance in the United States, and from all indications, it will last for the foreseeable future.

The U.S. is as fortunate as Britain in our leadership. The Bush Administration also has put together an energy plan for America in the 21st Century, and it notably features nuclear power.

President George Bush recently said in urging the Congress to pass energy policy legislation, “We need to be more self-reliant and self-sufficient. It is in our nation’s best interest that we develop more energy supplies at home. It is in our nation’s interest that we look at safe nuclear power.”

The U.S. Congress and the American public are getting solidly behind nuclear power, as an important hedge against the supply and price vulnerabilities of other fuels, and for its environmental benefits. We are moving closer to resolving the used fuel issue…a long-standing challenge…and relicensing existing plants has become an attractive option for nuclear operators.

Most importantly, we are moving ever closer to orders for the next generation of nuclear plants in America. There is an air almost of inevitability about it – it no longer seems a matter of if, but of when .

How did the U.S. move from “nuclear is passé” to “nuclear is a part of the future?” The short answer is, by the numbers. The numbers show virtually constant improvement in safety and productivity during the ‘90s. They show a competitive cost with other fuels for new capacity in America’s deregulating electric power industry. And, of course, one of the most important numbers in nuclear energy’s favor is “zero,” as in zero emissions, which makes nuclear power a key to America’s environmental, as well as energy, future.

Let’s look at performance first. Safety is paramount, and that’s where the industry has made its biggest gains. The number of unusual events – minor occurrences that must be reported to the Nuclear Regulatory Commission -- dropped from 197 in 1989 to 18 last year – a factor of 10. The annual industry average in the somewhat more serious category of significant events is down from 2.37 per unit in 1985 to 0.03 last year – vanishingly small.

The industry capacity factor is approaching 90 percent. The lowest quartile of plants is performing better than the top quartile did 20 years ago. Nuclear plant output increased from 577 billion kilowatt-hours in 1990 to 755 billion in 2000. That was the equivalent of 22 new 1,000 megawatt plants, and was enough of an increase to satisfy more than 20 percent of the growth in U.S. electricity use during the unprecedented U.S. economic expansion of the ‘90s.

This increased output undoubtedly helped to dampen the volatility in U.S. electricity markets as the industry began deregulating during the decade.

The uncertainty surrounding deregulation was a key factor in the falloff in new generating capacity in the U.S. We added only about 6,000 megawatts of capacity a year during the ‘90s, roughly half the amount built in the ‘80s. The reluctance to commit to new capacity contributed to one of the first manifestations of the nuclear energy renaissance – increased market value that led to the sale of a number of nuclear plants.

That trend is slowing. The plants that came on the market over the last few years are now more concentrated in the hands of fewer companies – mainly those whose longstanding expertise in running plants has led them to follow the strategy of becoming nuclear operators as the U.S. market has segmented. Industry not only benefits from having the best operators in the industry running more plants, but also from economics of scale in plant maintenance and operations.

The increased value of nuclear plants in the competitive marketplace has led to dramatically increased interest in relicensing. The industry has been working with the Nuclear Regulatory Commission to tighten and focus the regulations for relicensing, with considerable success.

Six reactors have been relicensed to date. The first NRC reviews took about 23 months, and the most recent about 18 months. Seven more relicensing applications are in process, and all are either on or ahead of the 18-month schedule, and seven more applications are pending.

We now estimate that license renewal for a typical 1000-megawatt reactor will generate about $48 million per year of extra earnings to the owners of the plant. The present value of these earnings over the 20-year extended life of the plant is equal to around $119 million, after subtracting the regulatory cost associated with license renewal. Small wonder that, in addition to the 20 already mentioned, applications for 24 additional reactors are expected within the next three years.

The elevated value of nuclear power stems from three basic factors: its competitive cost of electricity production, its forward price stability and its clean air value. They add up to a good business case for nuclear power – aside from any other benefits, there is money to be made operating nuclear plants.

We are used to hearing in the U.S. — as you may be over here — that nuclear electricity is non-competitive because of its high capital costs. But that is in the past. The increased efficiency of even the current generation of nuclear plants spreads any capital costs over an increased number of kilowatt-hours of production.

And capital costs aside, nuclear production is much less expensive than any alternative. The production cost of nuclear electricity in the U.S. in 1999 was 1.83 cents per kilowatt-hour. The next lowest was coal at 2.07 cents, and natural gas-fired generation came in at 3.52 cents — nearly double the cost of nuclear. We do not yet have numbers for competing fuels for last year, but the preliminary figure for nuclear production is 1.74 cents — even lower than 1999.

Standardized designs, pre-approval of sites and one-step licensing will bring the capital costs of future plants much more in line with current alternatives. The industry believes that new nuclear capacity can be built at a capital cost of $1,000 to $1,200 per kilowatt. That is competitive with clean-coal technologies at $1,200 to $1,500 per kilowatt. It’s higher than combined cycle gas plants at $600 per kilowatt…but the delivered cost of gas, at four to five dollars per million btu in times of supply-demand equilibrium, is many times the cost of nuclear fuel.

That cost advantage for nuclear fuel is likely to loom even larger in the future. Nuclear fuel should be stable in price as far out as we can project, while natural gas is a depleting resource that is subject to availability limitations in supply, storage and transportation capability. As problems in California illustrated earlier this year, excessive dependence on gas-fired capacity can be costly, indeed, when gas supplies tighten.

As far as competition with coal is concerned, the cost of clean-air compliance raises new coal capacity above the level of nuclear. And even clean-coal technology still produces emissions.

Today, nuclear power accounts for about two-thirds of the emission-free electricity produced in the United States. With 1.8 percent annual electricity demand growth over the next 20 years — a conservative estimate — we will need about 60,000 megawatts of new nuclear generating capacity just to maintain that level of emission-free generation.

NEI has used that increment of new nuclear capacity — 60,000 megawatts out of a total of more than 400,000 megawatts needed — in formulating a goal for the future. We call it Vision 2020. It’s a modest goal — only a three percent increase in market share over 20 years.

The industry has rallied around Vision 2020, and we’re energized — no pun intended. We break it down into 50,000 megawatts of new capacity, and 10,000 in increases from existing plants.

But we’re not just sitting around and waiting for it to happen. We have laid out, and are following, a detailed business strategy that will turn our Vision into solid accomplishment.

Some of our initiatives are well under way. One of our most important early priorities has been building support among policy makers and the public. We are gratified that public statements and opinion polls show that the Administration, the U.S. Congress, public officials at all levels of government — and not unimportantly the American people — increasingly believe that a portion of new generation should be nuclear.

We are continuing to make progress with our regulators, as well. Three advanced plant designs have been certified by the NRC, with excellent prospects for more certifications. The siting and licensing processes also are much more conducive to new orders than even five years ago. The industry continues to work with our regulators to amend and apply new, more efficient processes and standards for building and operating new plants.

We expect the decision to order will come within the next four years, and the licensing, permitting and construction will take about four years – about the same amount of time it takes to bring a large coal-fired plant on line.

The industry is also doing a great many other things to facilitate the next new orders — maintaining and expanding the infrastructure needed to ensure quality and efficiency of plant construction, for example. The industry is also working with our regulators to amend, test and apply new, more efficient regulations and regulatory processes.

Just as importantly, we are cultivating the next generation of nuclear professionals — over the next 10 years we’ll need about 26,000 more workers just to run the plants we’ve got, let alone prepare for 50,000 new megawatts. We’ll also be competing with other sectors of our industry and other industries, in addition to the U.S. government, to attract nuclear workers. We estimate total demand for nuclear workers from all sources over the next 10 years at about 90,000 workers. We’ve got an industry task force in operation and are developing a detailed, practical plan to meet our staffing needs.

As bright as the outlook has become, it is not trouble-free. The waste issue is still not resolved. But much progress has been make this year. The Department of Energy has issued its report confirming the suitability of the site at Yucca Mountain, Nevada, for a permanent repository. The scientific and regulatory reports — backed by nearly 20 years of exhaustive scientific studies — should lead to a recommendation by the Secretary of Energy to the President and the President determining to go forward early next year. The site still faces opposition by the state of Nevada, but we are very hopeful that the end of the long process is in sight.

Another area of concern is the changed world we all faced after the terrorist attacks of September 11. Plant security is now a leading issue. All U.S. nuclear plants remain on full alert, and will continue to do so for some time. We are emphasizing that nuclear plants would be extremely difficult targets for terrorists, and that reactors should be considered, for security purposes, on the same basis as other elements of the critical U.S. infrastructure. We are working with all responsible parties to develop a seamless division of public and private responsibility for security that will protect our plants, and assuage public fears.

Waste, security and a few other issues are difficult, but they can be resolved with hard work — the same sort of work that is under way to achieve the much more positive goals of Vision 2020.

When NEI’s President and CEO, Joe Colvin, introduced Vision 2020 earlier this year, he titled his presentation, “From Renaissance to Reality.” That is the path — an upward path — that the U.S. nuclear industry will be following over the next two decades. In our minds, and increasingly in the minds of others throughout the U.S., there is no question about it.