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Letters to the Editor

Fortnightly Magazine - September 1 2003

Letters to the Editor

To the Editor:

Many of the benefits of nuclear power were well highlighted by John Sillin in the cover story "Nuclear Showdown: The Upcoming Renaissance of Nuclear Power" : stable, high quality power close to loads with low marginal fuel costs, not dependent on weather and without emissions. What's not to like? Opponents are skeptical about operating accidents, safety against terrorist attack, and nuclear spent fuel transport and disposition. As Center for Strategic and International Studies President John Hamre concluded after their de-fense simulation exercise in October 2002, "Nuclear power plants are of great concern to everybody, but they are probably our best defended targets." The other 80 percent of our electricity infrastructure is more vulnerable. But the anti-nuclear crowd has reached a point where they oppose any large-scale energy project just to stop development.

Meanwhile, utility boardrooms, bankers, and rating agencies are worried most about high capital costs (>$1,600 per KWe for the first units), regulatory uncertainty with the NRC and FERC, and transmission bottlenecks. Putting out 780 billion kWh in 2002 (20 percent of U.S. supply), the U.S. nuclear fleet has tripled its volume of electricity since 1980. Nuclear power is back on the energy landscape because several of the key factors that crippled construction in the 1980s have remarkably turned around. Interest rates on capital are much lower than in the 1980s, natural gas prices are higher and more volatile, while nuclear fuel prices are stable and low (<$5 per MWh), safety and operating records have improved markedly, and more than two dozen reactors can be added at current sites in the United States where communities support them.

More than 30 light water "Generation III" reactors are now under construction worldwide (totaling >26,000 MWe), according to the World Nuclear Association, but not in the United States. Still, North American companies-GE, Westinghouse, Atomic Energy of Canada, Bechtel, Sargent & Lundy-are involved in those projects, and can bring that experience to add reactors to a few of the current sites in the United States. Toshiba, Hitachi and Framatome ANP have also recently shown keen interest in building units here.

Specific financing provisions approved in the original Senate energy bill (S.14) were not included in the version the Senate passed on July 31, because the whole bill was swapped out at the last minute for the old bill used last year (S.517). Federal credit remains an option in the future as the conference committee deliberates this fall. Indeed, analysis in the "Business Case for Nuclear Power" concludes that government financing is required for the first few reactors to address specific risks controlled by the government, notably: commissioning and regulatory risk with the NRC, waste disposal by DOE (slated for Yucca Mountain, Nev.), and capturing the public value of the air pollution savings to help offset the higher capital costs of first reactors.

Opponents of nuclear power deliberately muddled the figures in recent Senate debate on the energy bill. The loan guarantees and power purchase provisions originally proposed in the energy bill (S.14) could in no way approach the