Chairman Alexander, Ranking Member Graham, and members of the Subcommittee, my name is Jim Asselstine. I am a Managing Director at Lehman Brothers, where I am the senior fixed income research analyst responsible for covering the electric utility and power sector. In that capacity, I provide fixed income research coverage for more than 100 U.S. electric utility companies, power generators, and power projects. As a research analyst, I also work closely with the large institutional investors who have traditionally been a principal source of debt financing for the power industry. I appreciate your invitation to testify at today’s hearing regarding new nuclear power generation in the United States. In my testimony today, I intend to discuss seven requirements that I believe must be met if the industry is to decide to enter into commitments to build new nuclear power plants in this country, and if analysts and investors are to support that decision.

The first requirement is the continued strong regulatory and economic performance of our existing nuclear plants. By way of background, we currently have 103 operating nuclear units in the United States. These units are located in 31 states and are operated by 27 different companies. Together, these plants represent about 97 gigawatts of generating capacity, or about 12 percent of total U.S. capacity. Because these are baseload plants that operate with high reliability, these units produce more than 20 percent of total U.S. electric output. The plants consist of two reactor types: 69 are pressurized water reactors; and 34 are boiling water reactors. Of our existing fleet, the last unit to enter commercial operation was TVA’s Watts Bar 1 unit in June 1996.