in the United States
Senior Vice President
Canadian Nuclear Association/Canadian Nuclear
June 1, 1999
morning. I'm delighted to be here for the annual conference of
the Canadian nuclear industry.
of us from the United States feel a special kinship with
Canada—our closest neighbor, ally and trading partner.
two nations share the longest unguarded border in the world. A
wonderful testament to peace and cooperation in these troubled
our two nations are close friends, each has a culture all its
own. That is as clear in Toronto, Atlanta or Washington as it
is here in Montreal.
of my staff is originally from Canada—Montreal, in fact. She
said there is an easy way to distinguish between a Canadian
and an American: Remark that both cultures are the same and
the Canadian will promptly—but politely—set you straight.
well you should!
been asked to give you a brief overview of nuclear energy in
the United States-how the situation looks today and what we
expect in the future.
Nuclear energy is
entering a new era in the United States.
During the past few
years, we have witnessed an extraordinary convergence of
several key issues that affect our industry. The effects of
this convergence are very positive.
Today, we have a highly
competitive, dynamic industry that is poised for tremendous
progress in the next several years.
in the future—early in the next century—we expect to see a
modest expansion of nuclear energy here in the United States.
I'd like to stress two key points:
- First, there
is growing consensus among policymakers that nuclear energy
is vital for the United States to meet its clean air
requirements. They now have this technology on their radar
screens. True in industrialized countries around the world,
focused on reducing threat of global warming.
recognize that our nation needs emission-free electricity,
whether it's from hydroelectric plants, solar photovoltaics,
windmills—or nuclear power plants.
have heard supportive comments from people like U.S. Under
Secretary of State Stuart Eizenstat, who was our chief
negotiator in Kyoto and Buenos Aires … Alaska Senator Frank
Murkowski and New Mexico Senator Pete Domenici—just to name a
know that nuclear energy plays an important role in helping to
avoid air pollution in the United States.
fiscal year 1999, Congress provided $19 million to fund the
Energy Department's Nuclear Energy Research Initiative.
Energy Secretary Bill
Richardson said the Clinton administration's decision to fund
this program "has sent a signal that nuclear power is
United States now gets about 30 percent of its electricity
from emission-free sources—20 percent from 103 nuclear power
plants… and 10 percent from hydroelectric plants.
restrictions we have adopted on air emissions are based on the
assumption that 30 percent of our electricity will
always be emission-free … and that nuclear power plants
will continue to operate.
had to replace nuclear-generated electricity with electricity
from fossil-fueled plants, our air quality situation would
already has happened in Ontario, according to a recent report
from the Toronto Department of Public Health.
said that Ontario power plant emissions of sulfur dioxide and
nitrogen oxide have soared since Ontario Power Generation shut
down several nuclear power plants for extended maintenance and
repair in 1997.
people don't realize how important nuclear power plants
are—until those plants are off line. We call that the "hidden
value" of nuclear power.
clean air regulations do not recognize the significant role of
emission-free generation in clean air compliance.
industry is encouraging state and local governments to think
of emission-free generation as a compliance tool for
controlled pollutants, reducing overall compliance costs.
"hidden value" of emission-free generating capacity must be
recognized … given financial value … and credited to nuclear
units and other emission-free energy sources.
Several members of the
U.S. Congress are exploring this concept. Getting financial
credit for avoiding air pollution will enhance the
competitive position of nuclear power plants.
also have been discussions in Congress about the possibility
of requiring the United States to have a certain percentage of
its electricity generated by emission-free sources.
would like to see our nuclear plants get financial credit for
being emission-free generators—but their ability to compete in
an open marketplace doesn't depend on that.
Most U.S. nuclear
plants are very competitive today… and they are endeavoring to
reduce costs even further.—which is my second point.
Competition is good for
the industry, because our plants are performing at high levels
of safety, reliability and efficiency. Performance records and
a well-run nuclear power plant is very competitive in the
on a three-year rolling average—from 1995 to 1997—the United
States had nine nuclear units producing electricity below 1.5
cents per kilowatt-hour … and 40 units producing at below 2
cents per kilowatt-hour. Those figures are more than
because policymakers now recognize that nuclear energy is
important, they are more willing to support changes that
affect the long-term competitiveness of nuclear plants.
example, we're seeing progress in addressing the issue of
so-called stranded costs—large capital investments that could
be at risk in a competitive marketplace.
move to open competition in the electricity marketplace has
accelerated the resolution of stranded cost issues … as
individual companies position themselves for competition.
states—encompassing 52 nuclear units—have taken final action
on electricity restructuring plans. Most states have provided
utilities with a reasonable opportunity to recover their
like to speak briefly about the United States' move toward
resolving the disposition of used fuel.
U.S. nuclear industry has been pursuing a three-pronged
approach to reforming the Department of Energy's used fuel
first element is litigation. Several utilities have filed suit
against the Department of Energy for not fulfilling its
obligation to begin moving used fuel from plant sites by
number of different decisions, the courts have concluded that
DOE has both a statutory and a contractual obligation. Some
utilities are litigating the amount they are to receive as
utility has been told to resolve the issue of damages through
the process set up in its standard contract with DOE for
second element is continued support of the Energy Department's
the Nuclear Waste Policy Act of 1982, Congress directed the
Energy Department to locate, build and operate a deep mined
geologic repository for used nuclear fuel.
agency started with nine potential sites and narrowed the list
to three. In 1987, Congress designated a site in the Nevada
desert—Yucca Mountain—to be evaluated in detail.
Although a permanent
repository will not be opened until 2010, at the earliest, we
see continuing process. Notably, Energy Secretary Richardson
said last December that the just issued viability assessment
of the Yucca Mountain site contained "no showstoppers."
viability assessment includes a design for the repository …
explains how it will work … what it will take to license it …
and how much it will cost.
third element of the industry's approach to used fuel
management is legislation. Clearly, we need legislation to
ensure adequate funding of the repository program and to
ensure the DOE meets its obligation.
have been introduced this year in both the House of
Representatives and the Senate, and both bills are progressing
through the legislative process.
also are tremendous changes under way in the regulatory area.
strong support from Congress, the U.S. Nuclear Regulatory
Commission has developed a more objective, safety-focused
approach will enhance safety, while reducing unnecessary
regulatory burdens. The agency also has changed its approach
to enforcement to be more consistent with safety matters.
marks the beginning of a pilot project to test the new
oversight process at nine plants. The pilot project will be
used to fine-tune the new oversight process before it is
implemented industrywide next year.
Another expected benefit
of regulatory changes will come in the tone and content of
communications that the public receives from the NRC.
communications will become more objective and based on factors
specific to plant safety—and, therefore, more consistent with
the actual safety performance of our plants.
U.S. nuclear energy industry is dynamic and forward-looking.
companies have filed for 20-year license extensions for their
combined five nuclear units … and seven other companies have
notified the NRC of their intention to do so in the near
addition, two companies that have decided to make nuclear
energy generation their core business are in the process of
purchasing three other nuclear units.
at least two other plants are being examined as potential
candidates for purchase.
over the country, companies that operate nuclear power plants
are restructuring their assets to position themselves for
competition. Companies that design and service nuclear power
plants are very active too, both in U.S. and in pursuing
importantly, the financial community is taking a more
favorable view of nuclear energy's business prospects than it
has for many years.
Before I close, I want to
talk briefly about public opinion.
national survey last year looked at the views of an
influential sector of the American public—college graduates
who are registered to vote. These are the people who are
active in policy decisions.
Nearly nine out of ten
agreed that we should renew the licenses of nuclear plants
that continue to meet safety standards.
out of four agreed that we should keep the option to build
more nuclear power plants in the future.
the survey also showed what we call "a perception gap."
Sixty-two percent of
those polled said they, personally, favor the use of nuclear
energy. That is a clear majority.
most of these individuals believe they are in the minority on
this issue! They support nuclear energy themselves, but they
believe it is unpopular.
same gap is found among legislators and policymakers. Although
a large majority of policymakers support nuclear energy, they
perceive that their constituents do not.
recent surveys have uncovered two other points that bear close
First, people don't know
enough about what we do and how we do it. They don't
understand the science of our business. Nor do they understand
the lengths to which we go to provide safe, reliable and
second, they are just coming to understand the beneficial
environmental impact of the nuclear plants.
the March survey, we found a positive correlation between how
well-informed people feel they are about nuclear energy … and
how likely they are to favor this technology.
industry is intensifying its efforts to communicate the
benefits of nuclear energy—and to reassure those who support
nuclear energy that their views are shared by many others.
example, the Nuclear Energy Institute has mounted a major
advertising campaign to promote the benefits of nuclear
technologies. We are extremely active in coalition-building
and other outreach activities.
in this age of the World Wide Web, we have improved our public
Web site at http://www.nei.org/.
truly is the beginning of a new era for nuclear energy in the
United States. People are starting to recognize that it is an
essential part of our energy mix.
will be even more important in the future, as we deal with the
competing demands of continued economic growth and protection
of the environment. These are extraordinary times for the
nuclear energy industry … in the United States and elsewhere
around the globe. I hope you are as excited about the future
of this industry as I am!
again, I want to say what a pleasure it is to address my
Canadian colleagues in the nuclear industry.
as it is important for the U.S. industry to pull together, it
also is important for the international nuclear industry to
maintain close ties and work together to ensure the future of
nuclear energy as a sustainable source of economic, available
and environmentally preferable source of energy.