The amount of electric power generated from existing nuclear plants is likely to increase in the coming years as a result of higher capacity factors and plant uprates, according to Corbin McNeill Jr., co-CEO of Exelon Corp. But the executive also believes that there are a whole host of antiquated legislative and regulatory requirements currently facing the nuclear power industry that need to be overhauled, given the likelihood that future nuclear plants will be operating in a deregulated environment.

McNeill, who made his comments last Thursday before a joint Senate hearing that examined the state of the nuclear power industry, argued that the outlook for the existing fleet of nuclear plants in the United States is “excellent.” He said that there is a “critical shortage” of generating capacity in the United States and that new nuclear plants can play a role in meeting the country’s growing demand for environmentally clean electricity. “There are a number of new, advanced nuclear technologies that have been approved by the Nuclear Regulatory Commission, and other new designs are on the horizon,” McNeill noted. At the same time, there are “several outdated legislative and regulatory requirements that should be modernized to reflect the new deregulated marketplace in which future nuclear plants will be built.”

And while the current fleet of nuclear plants is turning in a strong performance, “capacity factors can increase further as the industry continues to share best practices among plants,” he said in prepared testimony. McNeill believes this is a trend that will not only occur in the United States, but in the rest of the world as well. “Exelon Nuclear alone plans to add approximately 1,000 MW … of new capacity over the next three years through uprates,” he noted.

James Asselstine, managing director at Lehman Brothers, told the panel that most of Wall Street believes that nuclear assets “are looking to have very significant value in a competitive marketplace.” He cited a number of factors that go into the financial community’s reaching this conclusion, including what he called “satisfactory progress” in terms of industry restructuring. In addition, Asselstine noted the improved operating performance by nuclear plants in the United States and “some of the positive regulatory changes that we’ve seen at the NRC.”

Turning to future commitments for nuclear power plants, Asselstine highlighted several requirements. “First, new nuclear units will have to be cost-competitive on a stand-alone basis,” he said. The Lehman executive noted that one of the challenges in this area is that the initial capital investment for nuclear units, as with coal units, is somewhat higher than gas-fired plants “and that issue will probably need to be addressed in terms of the utility’s ability or the generating company’s ability to recover those costs going forward.” He also said that it’s necessary to provide both generating companies and investors with assurances that plants can be built on a predictable schedule and at a predictable cost.

Nuclear power is receiving increased attention on Capitol Hill these days, as shown not only by last week’s Senate hearing, but also in legislation that has recently been introduced on the House side. Rep. Lindsey Graham (R-SC) last Wednesday introduced a bill designed to boost nuclear power as a viable energy option in the U.S. Among other things, the bill proposes to make nuclear power eligible to receive the same benefits as other zero emissions power generating facilities.

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