U.S. Energy Policy LegislationU.S. Energy Policy Legislation

Thelma L. Wiggins • Manager, Media Relations • Nuclear Energy Institute

ENS PIME 2004 Barcelona, Spain

Feb. 9, 2004

Energy Re-emerges as a Policy ImperativeEnergy Re-emerges as a Policy Imperative• Energy a non-issue for more than 15 years• California energy crisis in 2001• August 2003 blackout• Natural gas supply/price volatility

National Energy Policy BillNational Energy Policy Bill

•Diversified, comprehensive energy policy

•$31.1 billion price tag

•Legislation stalled in Senate over cost

•Nuclear provisions among the least controversial

•Bi-partisan support and chance for passage

•Decision expected in March

Demonstrated Supportof Nuclear EnergyDemonstrated Supportof Nuclear Energy

• President’s State of the Union Address• Congressional support during consideration of nuclear

energy provisions of the legislation• Northeast blackout prompts call for more nuclear• Designation of Yucca Mountain repository• 77-fold increase in nuclear energy R&D since 1998

Used Fuel Management:Continuing ProgressUsed Fuel Management:Continuing Progress• Increased funding to meet project needs and maintain

schedule– DOE budget request of $907 million for FY05 highest-

ever for Yucca Mountain program• DOE developing transportation infrastructure• DOE to file license application with NRC

this December• Major industry initiatives under way

Incentives for Energy SectorsIncentives for Energy Sectors

• Wind energy: $3 billion production credit• Clean coal: $1.5 billion investment credit • Natural gas: $1.5 billion R&D direct spending

$1.3 billion pipeline tax credits$2.2 billion other initiatives

• Electricity reliability: $300 million net direct spending• Nuclear energy: $200 million production credit

- 1.8 cents/ KWh for first 8 years- advanced design certified by NRC after bill passage - plant must be in service before 2021- saves consumers up to $6 million annually; $16 billion over the plant’s 60-year lifetime

The Business Logic Behind Nuclear EnergyThe Business Logic Behind Nuclear Energy• Safe, reliable, low-cost electricity

• Stable cash flow

• Hedge against volatility in natural gas price and supply

• Safeguard against escalating environmental requirements

Safe and Reliable

Forward Price Stability

Environmental Value

Low Cost

Sustained Political Support For Nuclear Energy

Sustained Political Support For Nuclear Energy• 2003: Energy legislation provided major stimulus

package for nuclear energy– Price-Anderson Act renewal– Financial incentives for new nuclear plants– Favorable tax treatment of decommissioning funds– Nuclear/hydrogen cogeneration project– Favorable regulatory changes– Removal of tariffs on steam generators, reactor

vessel heads

Validating the Licensing Process for New ReactorsValidating the Licensing Process for New Reactors

• Implementing cost-shared programs with the federal government to validate new licensing process and develop competitive designs– Exelon, Dominion, Entergy seeking early site

permits– Department of Energy solicited proposals to

demonstrate process for obtaining combined construction/operating license

Nuclear Power:Clearly CompetitiveNuclear Power:Clearly Competitive

$23.00

$35.84

$42.57

$34.64

$46.93

Nuclear BusbarCost

Mid-Atlantic

Gas-Fired Plant(fuel cost only)

California

Northeast

$ per Megawatt-hour