NEI's Incoming Chairman Cites Nuclear Energy's Value to Electricity Diversity, Reliability

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SCOTTSDALE, AZ, May 20, 2014 (GLOBE NEWSWIRE) -- Nuclear energy's importance in a diversified U.S. electricity portfolio makes it imperative that the industry build on 20 years of success by meeting three key challenges in the near term, the Nuclear Energy Institute's incoming chairman told industry leaders here today.

These challenges are:

  • strengthening the safety focus at nuclear energy facilities by reducing the cumulative impact of myriad regulatory and industry actions on nuclear power plants
  • encouraging effective, efficient and consistent leadership by the U.S. Nuclear Regulatory Commission, at the commission level and throughout the agency's staff
  • ensuring that the total value proposition of nuclear energy is recognized in competitive electricity markets where some reactors are under severe economic pressure.

"As the electric industry moves toward one of the most transformative periods in its history, it is our responsibility to ensure that nuclear energy continues to play a profound role in our diverse portfolio of electricity sources," said Chris Crane, incoming NEI chairman and the president and chief executive officer of Exelon Corp., the nation's largest nuclear energy company.

Addressing 400 industry leaders assembled for NEI's annual conference, Crane said the industry has strengthened U.S. energy security, the economy and environmental quality by sustaining high levels of excellence in safety and operational performance for two full decades. He noted that America's nuclear energy facilities generate nearly two-thirds of the electricity that comes from low-carbon sources, while annually sustaining industry average capacity factors—a measure of reliability—of 90 percent. In 2013, on average, the nation's 100 reactors generated electricity for slightly more than four cents per kilowatt-hour.

Yet it is imperative that the industry build on these accomplishments by addressing near-term challenges, Crane said.

"Just as the industry's technology development and operation have improved based on lessons learned and innovation, the NRC should advance a modernized, disciplined and efficient regulatory structure," Crane said. "The first step toward this is maintaining collegial, credible leadership. In the near term, the White House should nominate George Apostolakis for a second term on the commission and nominate a knowledgeable, sound replacement for Commissioner Bill Magwood, who is leaving the agency this August to lead the Nuclear Energy Agency in Paris."

Noting billions of dollars of safety enhancement implemented at U.S. energy facilities after the 9/11 terrorist attacks and the Fukushima Daiichi nuclear plant accident, Crane said the industry has demonstrated its commitment to make additional investments in safety and security when benefits are clear.

"But for some actions, the safety benefits are less clear. The NRC and the industry agree that top priority should go to actions that provide the greatest safety benefits. The challenge is to prioritize them. The industry and the NRC often differ dramatically in our estimates of the costs and benefits of various regulatory proposals. Closing that gap will require the industry to provide better, more complete input to the NRC up front," Crane said. Some regulatory requirements have cost more than 10 times the NRC estimate for meeting them.

While five new reactors are being built in the Southeastern United States, where electricity markets are regulated, dynamics in deregulated markets are threatening the economic viability of some reactors, Crane said.

"We must ensure that electricity markets properly recognize and value the important attributes that nuclear energy facilities provide to the grid and ultimately to our customers," he said.

"Nuclear plants provide large-scale electricity production, clean air, price stability and the highest reliability of any electricity generating source, but current market policies and practices do not accord value to these benefits. This threatens the diversity of our nation's generating portfolio and our ability to meet environmental goals. A diverse portfolio serves as a hedge against price volatility or supply disruptions."

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Source:Nuclear Energy Institute