1. PP571.1 The Prospects for New Nuclear Construction Eugene S. Grecheck Vice President Nuclear Support Services ANS Virginia Section Meeting March 16, 2004

2. PP571.2 What You May Have Heard (or what happened to the predictions of 1000 reactors by 2000?)  No new nuclear plant orders since 1978  Licensing and construction takes too long  Last new plant began operation in 1996  Construction and operations and maintenance costs are too high  Licensing is unpredictable

3. PP571.3 If That’s True, Then…………...  Many existing units will shut down prematurely  Licenses will not be renewed  No new units will ever be built  Nuclear will fade from the nation’s energy portfolio So…… IS IT TRUE????

4. Industry Capacity Factor Continues at Record Level 86.8% in 1999 89.6% in 2000 90.7% in 2001 91.5% in 2002 Nuclear Energy Institute

5. Production Costs Show Steady, Sustained Improvement 2.09 cents/kWh in 1998 1.90 cents/kWh in 1999 1.81 cents/kWh in 2000 1.68 cents/kWh in 2001 (production cost in cents per kilowatt-hour)

6. PP571.6 US Electricity Production Costs (1981-2002) in 2002 cents per kilowatt-hour Source: RDI /EUCG. Converted to 2002 dollars by NEI.

7. PP571.7 Industry Safety Performance shows steady Improvement……………………… Number of Unusual Events Reported to NRC (1989-2002) Source: NRC Note: A Notification of Unusual Event for power and non-power reactor licensees is a condition involving potential degradation of the level of plant safety that does not represent an immediate threat to public health and safety.

8. Nuclear Plant Output: Growth During the 1990s Equivalent to 26 new 1,000-megawatt power plants Year Billion kWh

9. PP571.9 License Renewal: Unlocking Additional Value Already filed Catawba 1,2 McGuire 1,2 Fort Calhoun Announced 2003 Arkansas Nuclear One Unit 2 Cook 1,2 Browns Ferry 1,2,3 Announced 2004 Millstone 2,3 Nine Mile Point 1,2 Brunswick 1,2 Beaver Valley 1,2 Davis-Besse Pilgrim Approved Calvert Cliffs 1,2 Oconee 1,2,3 Arkansas Nuclear One Unit 1 Hatch 1,2 Turkey Point 3,4 North Anna 1,2 Surry 1,2 Peach Bottom 2,3 St. Lucie 1,2 Already filed (cont’d) Robinson 2 V.C. Summer Ginna Dresden 2,3 Quad Cities 1,2 Farley 1,2 Source: NRC Updated : October 2003 Announced 2005 Entergy Plant Announced 2006 Susquehanna 1,2 Entergy Plant Wolf Creek

10. PP571.10 Today’s State of the Nuclear Industry  440 commercial reactors in 31 countries  103 commercial reactors in the U.S.  Overall, 16% of the world’s electricity  15 countries: Over 25%, some over 70%  31 new reactors under construction in other countries - but none in the U.S. …….yet!

11. PP571.11 Projected U.S. Energy Growth

12. PP571.12 Capacity Brought on Line by Fuel Type (1950-2002) Source: RDI PowerDat database. Last updated 9/15/03.

13. PP571.13 Current U.S. Electricity Generation Fuel Diversity (2002) Source: NEI Emission-free sources

14. 50,000 MWe of New Nuclear! 30% non- emitting 30% non- emitting Oil, Gas & Coal Hydro & Renewables New Nuclear Capability (50,000 MWe) Enhanced Nuclear Capability (10,000 MWe) Existing Nuclear Capability 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2000 2020 Billion kWh

15. PP571.15 What Has Changed---and Is It Enough?  New licensing process  New plant designs  More reliable and efficient operation

16. PP571.16 New NRC Licensing Process  NRC revised its regulations--Part 52--for new nuclear plants over a decade ago  Part 52 has three elements: – Design certification – Early site permitting – Combined license

17. Early Site Permit Design Certification Combined License Issued ConstructionITAACOperation Apply for Construction Permit Construction Apply for Operating License Operating License Issued Operations OLD LICENSING PROCESS NEW LICENSING PROCESS NRC Licensing Process License Issued BEFORE Large Capital Investment License Issued AFTER Large Capital Investment Construction Permit Issued

18. What this Process Changes  Licensing decisions will be made BEFORE large capital investments are made. – Safety and environmental issues will be resolved before construction starts – NSSS and BOP design will be well developed before COL application is submitted – Plants will be almost fully designed before construction starts  Result: High confidence in construction schedule and cost control

19. PP571.19 Design Certification  Design Certification addresses design issues early in the process  Plants are designed to be constructed in less than 48 months  Each manufacturer’s plants will be a standard certified design  3 Design Certificates have been issued, 1 active application in review

20. PP571.20 Early Site Permits (ESP)  Obtaining an ESP allows a company like Dominion to “bank” a site for 20 years, with an option to renew  If and when market conditions warrant, nuclear may then be considered among a variety of generation options  Dominion has no plans to build another nuclear plant yet.

21. PP571.21 ESP Application Status  Dominion’s ESP Application was submitted on 9/25/03  Exelon submitted on 9/25/03  Entergy submitted on 10/21/03

22. PP571.22 Combined License  Combines the Early Site Permit and the Design Certification into a site and technology specific document  When approved, provides authorization to build and operate  Resolves operational and construction issues before construction begins  Process has yet to be tested

23. PP571.23 New Nuclear Technologies  Innovative new reactor technologies are being developed for deployment  Passive and active safety system designs  Some based on existing light and heavy water designs; some on new gas-cooled technologies  Bases in existing technology expected to yield reliable operation  Designed for short construction periods and reduced construction costs  All can be economically attractive

24. PP571.24 General Electric Advanced Boiling Water Reactor  Net plant output, 1356 Mwe, 3926 MWth, with uprate to 1500 Mwe, 4300 MWth  Single, stand-alone unit  Licensed in three countries  Improved safety systems  Engineered in detail, except for site engineering  Has been constructed in 48 months  Next ABWR unit will be the 5th in the series  Design Certification has been issued

25. PP571.25 Westinghouse AP1000  3400 MWth, 1200 MWe  2 steam generators, 4 canned reactor coolant pumps  Based on much existing technology  Passive Design Features  Modular construction – 36 Month Construction, First Concrete to Fuel Load  Design Certification application has been filed. Approval expected in 2005

26. PP571.26 Atomic Energy Canada, LTD ACR-700  739 MWe, 1983 MWth  Designed for simultaneous LOCA and Loss of ECCS  On-Power Refueling  Robust, safe, economical Fuel Design  Compact, smaller Calandria  Horizontal fuel channels  Reduced Heavy Water Inventory  Design Certification application expected in 2004

27. PP571.27 General Electric ESBWR  1380MWe, 4000MWth  Passive Safety Systems to Simplify Plant Design  Natural Circulation Reactor Vessel  Designed for Improved Reliability and Maintainability  Design Certification application expected in 2005

28. PP571.28 Other Plant Designs  Framatome SWR-1000 – 1250 MWe BWR, active and passive safety systems  Framatome EPR – 1600 MWe advanced PWR, improved thermal performance  Westinghouse IRIS – 330 MWe PWR, single pressure vessel houses all major components  Pebble Bed Modular Reactor – 160 MWe Gas cooled, single cycle  General Atomics GT-MHR – 285 MWe Gas cooled, single cycle

29. PP571.29 DOE Nuclear Power 2010  Objectives: – Develop new technologies – Demonstrate licensing process – Encourage new nuclear development  Cost-sharing approach  Also supports advanced research and critical education pipeline

30. PP571.30 Barriers to the Decision to Build  Licensing uncertainties with untested processes  High initial unit costs  Financing risks  Earnings dilution during construction  High level waste disposal  Price-Anderson renewal

31. PP571.31 What’s Next?  Energy Bill – Still stalled in Congress – Potential for incentives to assist development of the first new plants – Gas Reactor Demonstration Project at INEEL  NP2010 – DOE solicitation to develop COL application to test next step in licensing process – Includes DOE match for FOAKE

32. PP571.32 Hypothetical Timeline for First Plant  Develop COL Application, complete necessary first of a kind engineering (FOAKE) – 24 months  NRC Review and Approval of COL Application – 24-36 months – Complete remainder of FOAKE  Construction of new plant – 48-54 months, start of construction to commercial operation IT CAN ALL HAPPEN AS SOON AS 2013

33. PP571.33 Can it Really Happen?  Price stability  Energy diversity  Emission-free generation It Can… and Must!

34. PP571.34 “The best way to predict the future is to create it.” -- Peter F. Drucker

35. PP571.35