Good morning. It is an honor to appear before this distinguished audience, and to be included among such a group of eminent speakers. I commend the organizers for putting together another great program and I’m very happy to see many friends and associates here today.

This morning I want to talk about strengthening public confidence in nuclear power. We all know how important public support is to our business, how hard it is to achieve and how rapidly it can be lost.

I’d like to begin my remarks with a few words from the microbiology community. That may seem unconventional at a nuclear energy conference, but bear with me.

A few months ago, a leading U.S. magazine published an interview with Dr. Craig Venter, the internationally-known microbiologist who led the successful effort to map the human genome. It was a general interview, touching on his life, and his views on many subjects.

In the course of the interview, and, interestingly, not in response to a specific question about nuclear energy, Dr. Venter said, “Scientifically, it’s far, far safer for us to take nuclear waste and bury it…than to continue dumping billions of tons of carbon dioxide into the atmosphere….We’re contaminating our entire environment now because people are afraid of nuclear energy.”

Dr. Venter is not a physicist, and has no known connection with the nuclear industry. But he does enjoy global prestige because of his scientific accomplishments, and his platform was a magazine read by millions. He is an opinion leader – a person whose views are likely to sway others.

But, Dr. Venter’s unsolicited support for nuclear energy is by no means an isolated event today. Thousands of other opinion leaders – accomplished Americans from all sectors of American life, are publicly praising nuclear energy. Noted historian and author Richard Rhodes said, “Nuclear power is environmentally safe, practical and affordable.” Business leaders such as Sun Microsystems CEO Scott McNealy and entertainers such as famed actor Paul Newman are vocal supporters of nuclear energy…as are many U.S. political figures, including President Bush, Vice President Cheney and Senator Pete Domenici.

As you may know, the U.S. nuclear industry is now celebrating its 50th anniversary, dating from the founding of the Atomic Industrial Forum and President Eisenhower’s Atoms for Peace speech on December 8, 1953. Even in the formative years, when the promise of nuclear energy seemed boundless, I don’t think the industry enjoyed greater support than it does now.

Support back then was based on enthusiasm for the potential of nuclear energy. Support today is founded on the outstanding, safe performance of America’s 103 reactors, along with the substantial contributions nuclear energy is making to the United States economy, to our people and to our environment. This unprecedented support is increasing the potential for nuclear energy to make even greater contributions in the future.

(Nuclear output gains since 1990 slide)

Safe and efficient nuclear plant performance is the bedrock of the U.S. nuclear renaissance. Since 1990, efficiency and production gains have added the equivalent of 26 new large reactors to our electricity grid. Last year, U.S. nuclear electricity output was a record 780 billion kilowatt-hours, and the industry-wide capacity factor exceeded 90 percent for the third straight year. The increased efficiency has lowered production costs, so that nuclear energy is now the lowest-cost, large-scale, expandable electricity source in the United States.

Our safety record – the linchpin of our public credibility – also continues to be outstanding. NRC Chairman Nils Diaz, spoke on these points this morning. He also commented on the importance of communication and transparency of safety information to the public. NRC’s Reactor Oversight Process and the new initiatives he discussed are keys to retaining public support and trust.

The overall safety record of the Japanese nuclear industry has also been excellent, despite some recent highly-publicized events. Many of you are aware that NEI and JAIF held a very successful meeting in Japan last August during which we shared some of the lessons we learned during a somewhat troubled period in the history of the U.S. industry, how we responded to form INPO and NEI, how our participation along with Japan and other countries resulted in the creation of WANO, and other important initiatives. We hope that through such sharing of experiences we can all learn and enhance our ability to increase public support for nuclear energy.

(public opinion over two decades slide)

Those organizational responses in the U.S. have been instrumental in the steady rise in public support for nuclear energy over the past two decades. That support has remained strong despite the spectre of terrorism and the recent downturn in the economy.

Clearly, energy supply disruptions or shortages increase public support for nuclear energy. The peak of public support in 2001 coincided with the energy shortages in California. The blackout last August affected 50 million people in the Midwest and Northeast, and our recent public opinion poll showed support for building more nuclear power plants up 10 percentage points in each of those regions.

(nuclear environmental message slide)

The growing recognition of the clean air benefits of nuclear energy is also helping to build public and political support for our industry. In a recent poll, we asked if respondents favored nuclear energy, and 60 percent said yes. Then we read them a short statement, “There are more than 100 nuclear plants in the United States that generate one-fifth of all the electricity we use without producing any greenhouse gases or other air pollution.” Then we asked again if they favored nuclear energy and the positive replies rose 6 percent.

As an industry, we have a challenge to more clearly and forcefully communicate the benefits of nuclear energy to our air quality. The U.S. public has a somewhat limited understanding of the basic operation of power plants. In fact, it is not an overstatement to say that many people really are not sure how their electricity is produced. They just want to know that it is available when needed. So, given the limited background on energy issues, we must be increasingly proactive in our outreach to the public on the issue of nuclear energy’s clean-air benefits.

(nuclear greenhouse gas contribution slide)

Nuclear energy is important to the Bush Administration’s environmental policy. Earlier this year, President Bush announced his Climate Change Initiative, a voluntary program with a goal of reducing the greenhouse gas intensity of the U.S. economy, in terms of metric tons of carbon per unit of GDP, by 14 percent by 2012.

The nuclear industry will play a leading role in meeting President Bush’s Climate Change goals. We have pledged to increase capacity of existing reactors by 10,000 megawatts through plant uprates and the restart of Browns Ferry Unit 1. This 10,000 megawatts will account for more than 20 percent of the President’s goal. We are working together with other segments of the U.S. energy industries to make the Climate Change Initiative work.

(Nuclear environment ad slide)

Nuclear energy’s environmental benefits and the reliability of nuclear plants are key messages of a coordinated, strategic communications plan we call the Nuclear Energy Branding Program. The campaign uses a variety of research-based, communications and public outreach tools to raise awareness of the benefits of nuclear technology among opinion leaders – particularly state and federal lawmakers, the financial community and the media.

We concentrate our advertising in the Washington, D.C., media market during the times when the U.S. Congress is considering key nuclear policy issues. However, our media outreach and web communications reach more than 20 million Americans each year.

(Washington slide)

There may be no direct connection to the Branding Program, but a number of positive developments give clear indications of increasing policymaker support for nuclear energy in Washington. As I said earlier, nuclear energy plays a major role in the Bush Administration’s energy policies, as well as its environmental policies.

From his first days in office, President Bush spoke out strongly in favor of the need for expansion of nuclear power as part of a secure and diverse energy supply. President Bush supports the Yucca Mountain project, research and development for new reactors, and a $1.2 billion hydrogen fuel development program that would explore the use of advanced nuclear technologies to produce hydrogen.

It may surprise you, but there is bi-partisan support for nuclear energy in the U.S. Congress. We have been successful in delivering 60 to 70 percent support on key nuclear votes. Even our presidential candidates support nuclear power. Senator Joe Lieberman has said, ““I am a supporter of nuclear energy. I believe it can be part of the solution to solving the world’s energy, environment and global warming problems.”

Sen. John Kerry of Massachusetts and Gov. Howard Dean of Vermont also have made supportive statements about nuclear energy, as have many other officeholders of both major parties.

Congressional conferees have reached agreement on a major energy policy bill, after working on it all year. The House last week approved the bill by a 246-180 vote, and the Senate is currently debating the measure. We are working hard to pass the bill in the Senate and send it to the President for his signature.

Several elements of the bill are bellwether policy changes that will set the stage for greater regulatory certainty and expansion of the nuclear energy industry.

Among them are:

• Renewal of the Price-Anderson Act for 20 years;
• Incentives for the construction of advanced reactors – a 1.8 cent-per-kilowatt-hour production tax credit for eight years for the first 6,000 megawatts placed in service before 2021 – about $1 billion per reactor;
• $2.5 billion dollars in nuclear research and development funding over five years, including demonstration of an advanced reactor to produce hydrogen;
• Enhancements, endorsed by the industry and the Nuclear Regulatory Commission, to nuclear plant security;
• Positive changes in the tax code.

President Bush recently urged the Congress to finish its work on an energy bill that advances nuclear energy, as this bill does. In a speech last month, he said, “Congress should promote research into the next generation of nuclear plants and encourage investment in existing nuclear plants to expand a clean and unlimited source of energy.” His audience greeted the statement with great applause.

In addition to reliability, low cost and environmental benefits, the U.S. nuclear industry has been able to communicate another message that has resonated with the American public in the aftermath of the September 11, 2001 terrorist attacks: U.S. nuclear plants are secure.

The industry has spent more than $400 million on security upgrades in the past two years and we expect that total to rise to $1 billion dollars by the end of 2004. The industry has worked with the government agencies at all levels to develop a seamless public-private division of responsibility for security.

An aspect of the new security priorities is increased scrutiny of nuclear plant emergency preparedness. We have always had the best emergency preparedness programs of any industry, but public concerns have prompted us to convene an executive level industry task force to reexamine the programs, and undertake initiatives where they are needed. These efforts are focused on building enhanced community support in the near vicinity of our plants.

(Vision 2020 slide)

Many of you are familiar with our Vision 2020 objective of 50,000 megawatts of new nuclear capacity by 2020 and 10,000 from existing sources by the end of the second decade of this century. Even with this aggressive plan, we will only succeed in keeping the percentage of nuclear energy about the same as today, due to the large increase in demand.

(Vision 2020 existing capacity slide)

The 10,000 megawatts we have pledged to the President is in line with our vision, and we will be more than halfway to that goal within four years.

We are also making progress toward the more ambitious goal for new nuclear capacity. NEI’s Executive Task Force on new nuclear plants has been examining the issues that must be resolved in the minds of investors before they will commit more than one billion dollars to build a new nuclear plant. They chiefly involve, in the words of one industry executive, “having certainty in the regulatory process…and being able to predict…what your endpoint will be for completion of such a project.”

(Regulatory certainty slide)

We are moving rapidly toward the needed regulatory certainty. The NRC has certified three advanced design reactors, implemented rules allowing early site permitting and created a streamlined, one-step licensing process for construction and operation. Three U.S. companies – Entergy, Exelon and Dominion Resources – have recently submitted early site permit applications to the NRC to test the operation of the early site permitting process.

We are now able to state with confidence that an advanced design reactor project can be completed in the U.S. in about four years. This confidence is based in large part on Japan’s pioneering effort in building and operating ABWR reactors of GE design similar to one of the designs approved by the NRC.

We believe that when all factors are considered, there is growing investor confidence that nuclear energy stacks up very well against other potential electricity generation sources for the future.

(five steps of nuclear support slide)

We know that we have the support in Washington, and the support of opinion leaders from both the public and private sectors. And we are confident that we have public support, based on our long-term opinion research. There are five stages of support that build upon each other, leading up to new plant construction:

• perception of the future importance of nuclear energy to the country;
• favorable feelings toward nuclear energy;
• support for keeping open the option to build new nuclear power plants;
• support for definitely building new nuclear power plants;
• and the acceptability of building a new plant at a location near existing plants.

As you can see by the numbers, the industry has solid majority support in all five stages. The first three are relatively constant, but the final two vary from poll to poll, depending on public perception of the need for new plants. However, given the volatility in the price and supply of natural gas and given the revival of the U.S. economy, we believe that public support for the final two stages will grow significantly, and stay strong.

As always, however, public support is dependent on continued excellent plant safety and performance. The U.S. nuclear industry is committed to sustaining the levels of safety and performance that have earned us this unprecedented level of public confidence, and to increasing it still further.

I began with a positive statement about nuclear energy from the world of microbiology. Let me close with one from the world of economics – specifically from Federal Reserve Chairman Alan Greenspan, whose every public pronouncement can have and has had profound effects on the U.S. economy.

In congressional testimony this past June, Chairman Greenspan said, “I’ve always testified in favor of re-examining what I think is a policy which is mistaken, namely our views toward nuclear energy. I do think that the technologies have improved immensely, and the advantages that they obviously have, I don’t have to get into them, I’m sure you know them far better than I.”

The U.S. Congress has indeed demonstrated that it knows and appreciates the advantages of nuclear energy…and so has the American public. That knowledge has bred confidence, and that confidence bodes very well for the future of the U.S. nuclear industry, and, hopefully, for all our partners around the world.

Thank you!