U.S. Nuclear Program – A Status Report APPA Board of Directors Meeting Marvin S. Fertel President and Chief Executive Officer September 14, 2010

Sustaining Excellent Reactor Performance Record electricity production in recent years Produces 20% of electricity with 10% of U.S. capacity Nuclear energy dominates CO 2 -free electricity portfolio Most reliable electricity producer at 90% capacity factor 2009: 799 billion kilowatt-hours 2009: 90.5% capacity factor

Strong Public Support Continues 74% Favor Use of Nuclear Energy 87% Favor Renewing Licenses 87% Important for Our Energy Future 70% Definitely Build New Reactors 77% Acceptable at Nearest Site Source: Bisconti Research Inc./Gfk Roper March 2010 poll of 1,000 U.S. adults; margin of error is +/- 3%

U.S. Public Opinion 1983 – 2010: Favorability to the Use of Nuclear Energy for Electricity Annual Averages Until 2010, Percentages Bisconti Research, Inc. survey of 1,000 U.S. adults; margin of error +/- 3 percentage points

U.S. Public Opinion: Acceptability of Adding a New Reactor Next to Nearest Operating Nuclear Power Plant (2005 – 2010) Percentages Bisconti Research, Inc. survey of 1,000 U.S. adults; margin of error +/- 3 percentage points

Source: U.S. Nuclear Regulatory Commission Nuclear Plant Uprates Uprate Highlights  5,744 MW of power uprates approved since 1977  3,526 MW of uprates under review and expected to be implemented by 2014 Plant Completions  Watts Bar 1123 Mwe (under construction)  Bellefonte Unit 1 & Mwe (construction suspended – being considered)

59 Granted 18 Under NRC Review 21 Intend to Renew Source: U.S. Nuclear Regulatory Commission 6 Unannounced Preparing for Longer-Term Operation  DOE and EPRI collaborating on extended operation  Industry investing in extended operation through replacements, upgrades and uprates  EIA’s 2010 Annual Energy Outlook reference case assumes 41 nuclear units will operate beyond 60 years License Renewals Continue...

Obama Administration Actions That Support Nuclear Energy Expansion  Significantly improved and expanded the loan guarantee program – Announced $8.3 billion loan guarantee for Southern Co.’s $2.0 billion for AREVA Uranium Enrichment Plant – $36 billion increase in loan volume in FY 2011 budget  $73.8 million in clean energy manufacturing tax credits awarded too nuclear manufacturers  Nominated three qualified candidates for the U.S. Nuclear Regulatory Commission

 22 reactors under active review at NRC – First licenses late 2011, early 2012  Nuclear plant design certification – Three design certifications in progress – Two previously certified designs being updated  First movers have started site preparation, ordered long-lead components  Expect four to eight reactors in commercial operation  U.S. manufacturing supply chain growing Snapshot of New Nuclear Plant Development

Cost of Electricity from Nuclear and Gas-Fired Capacity TechnologyNuclear Gas (Combined Cycle) Project Structure PF with LG 80% Debt 20% Equity RB with CWIP 50% Debt 50% Equity PF 50% Debt 50% Equity EPC Cost ($/kWe) $4, ,500$1,000 Total Cost ($/kWe) $5,500-$6,100$4,800-$5,400$1,200 Fuel Cost (nuclear - $/MWh) (coal/gas - $/mmBtu) $7.50$4.00$7.00$10.00 Capacity (MWe) 1, First Year Busbar (2009 $/MWh) $ $106 - $116$56$76$97 Levelized Busbar (2009 $/MWh) NA$80 - $86NA Impact of C0 2 Price at $30/Ton (2009 $/MWh) NA Add $18.00 Source: NEI Financial Model PF – Project Finance, RB – Rate Base, CWIP – Construction Work in Progress, LG – Loan Guarantee

100% 94% 82% 80% 63% Construction Cost (% of First of a Kind ) Construction Duration (Months) ~ % Learning Curve Opportunity – Korean Example 39 Goal Yonggwang 3, 4 Ulchin 3, 4 Shin Wolsong 1, 2 Yonggwang 5, 6 Ulchin 5, 6 Shin Kori 1, 2

Reactors Under Construction and Planned Worldwide Sources: International Atomic Energy Agency for units under construction and World Nuclear Association for units on order or planned. *Chart includes only countries with units under construction. **Countries planning new units are not all included in the chart. Planned units = Approvals, funding or major commitment in place, mostly expected in operation within 8-10 years. Updated: 8/10 Totals:  61 units under construction*  149 units on order or planned**

Advanced Reactor Technologies  Small modular reactors ( Mwe) – Light water, high temperature and fast reactors – Generation, process heat and improve fuel use – Could be under construction in 10 years – Built in modules at a factory and shipped to site – T&D planning activities reduced – Potential replacements for old inefficient coal plants – Time to market -- six years assuming an ESP – Need more design information before economic assessments can be completed

Summary of Studies on Climate Change Mitigation New Nuclear Generation Capacity Required SourceStudy /Analysis Number of new reactors* GigawattsTimeframe Energy Information Administration Annual Energy Outlook Kerry/Lieberman, American Power Act (2010) Waxman/Markey (2009) Lieberman/Warner (2008) Environmental Protection Agency Kerry/Lieberman, American Power Act (2010) Waxman/Markey (2009) Lieberman/Warner (2008) National Academy of Sciences America’s Energy Future: Technology and Transformation (2009) Electric Power Research Institute Prism/Merge Analyses: 2009 Update McKinsey & Company U.S. Greenhouse Gas Abatement Mapping Initiative - Mid-Range Case (2007) *Based on a 1,400 MW average nuclear plant.

 Administration terminating the Yucca Mountain project – Blue ribbon commission to develop recommendations on used fuel management  Interim storage safe, secure for indefinite period of time  Used fuel issues not an impediment to operating reactors or new plant development Used Nuclear Fuel: The New Reality On-site storage for used fuel at the Surry station in Virginia

Political Agenda  Relationship strengthening/building and education  NRC Commissioners Nomination/Confirmation  Energy Policy Positions – Financing platform – Tax issues – Licensing clarifications  Nuclear Waste Policy Act

Political Agenda  Oppose imposition of inappropriate new costs – D&D tax – Increase in decommissioning fund tax rate  NRC oversight

Conclusions  Current 104 units sustained good performance  Industry pursuing plant uprates ~ 3500 MW’s+  Industry pursuing license renewal – all 104 units – Greater than 60 years operation being explored  New plants – 4-8 reactors in commercial operation 2016 – 2018  New small modular reactors being developed  Significant expansion of nuclear necessary to meet 80 percent CO₂ reduction by 2050