New Nuclear Consortium Applies for DOE Funding as Duke Energy Joins

Apr 26, 2004, 01:00 ET from Entergy Operations

    WASHINGTON, April 26 /PRNewswire-FirstCall/ -- The broad-based nuclear
 industry consortium presented to the U.S. Department of Energy Monday an
 industry-federal government proposal to share the cost of development of a
 construction and operating license (COL) for advanced nuclear power reactors.
     There are these additional developments:
      - Duke Energy, one of the nation's largest diversified energy companies
        and a leading nuclear power plant operator, also joined the industry
        consortium, making nine energy companies participating.
      - The new consortium, announced March 31, also adopted its name, NuStart
        Energy Development LLC.
     None of the consortium companies has committed to build a new nuclear
     But NuStart Energy's proposal does commit to complete detailed engineering
 design work and to prepare COL applications for the two advanced reactors,
 then commits to choose one of the applications and file it for NRC review and
     After NRC approval, any individual company or group of companies could
 decide to use the license to build a new nuclear plant, based on its
 assessment of power demand, the price of competing electricity technologies,
 environmental requirements and other factors.
     "The Duke Energy nuclear fleet (operated by Duke Power) serves our
 customers as a reliable, economical and environmentally compatible source of
 electricity," said Brew Barron, Chief Nuclear Officer of Duke Energy in
 Charlotte, NC, in joining the industry-wide group.
     "We want to play a role in leading the evaluation for the next generation
 of nuclear plants.  NuStart Energy is setting the stage for new nuclear plants
 as a vital option in a diverse power generation portfolio to meet rising
 electricity demand."
     Marilyn Kray, a vice president at Exelon Nuclear and executive lead for
 the NuStart consortium, welcomed Duke Energy's participation.
     "Duke has been an industry leader in the development of nuclear power and
 they have operated nuclear power plants safely and efficiently for four
 decades.  Like other members of NuStart Energy, Duke Energy sees value in
 evaluating a new generation of nuclear power plants," Kray said.
     "This industry consortium is an excellent example of the nation's leading
 electric utilities, a federal government agency and nuclear reactor vendors
 working together to investigate and demonstrate the design certification and
 licensing of the next generation of advanced nuclear power reactors," she
     "Nuclear power is an important part of the nation's energy portfolio,
 accounting for about 20 percent of total electricity production," said Kray.
 "Nuclear power's safety, reliability, low-cost production and low
 environmental impact make nuclear energy a vital source for meeting America's
 future electricity needs.  The COL process is important because it will help
 consortium members make more informed choices in resource planning by gaining
 a better understanding of the technologies, cost, scheduling and risk
 associated with licensing and building a new nuclear unit."
     The engineering design work proposed by NuStart Energy would be the most
 detailed ever done on the chosen next-generation advanced reactors and, as a
 result, provide the most accurate cost estimates yet to build them.
     Of the nine companies participating in the consortium, six have formed
 NuStart Energy Development LLC and each has pledged $1 million a year plus in-
 kind services for seven years, totaling about $42 million.  A seventh power
 company, the Tennessee Valley Authority, a federal power agency, will be
 providing in-kind services only and two reactor vendors GE Energy and
 Westinghouse will be contractors to NuStart Energy.  The power companies have
 selected the General Electric ESBWR and the Westinghouse Advanced Passive 1000
 as the reactor designs for the project.
     Since much of the work is detailed engineering design, the two reactor
 vendors would pay the largest share of industry costs, about $400 million.  If
 approved, that amount would be matched 50-50 by DOE research and development
 funds, averaging about $57 million a year for seven years.
     NuStart Energy's requested level of DOE support is significantly less than
 federal R&D funding already provided to other energy technologies to meet
 growing electricity demand while enhancing America's energy independence.
     For the decade ending in 2002, Congress appropriated to DOE average annual
 funding for energy research of $54 million for advanced nuclear energy, $482
 million for fossil including clean coal, $538 million for energy efficiency,
 $336 million for solar and renewables and $270 million for fusion.  Such
 annual federal funding generally does not require 50-50 matching by the
 technology companies as committed by NuStart in its proposal to DOE.
     In addition, wind turbines received a production tax credit of $17 a
 megawatt-hour, totaling $280 million in 2003, which is expected to be renewed
 by Congress.
     NuStart Energy's proposal seeks federal government cost sharing under
 DOE's Nuclear Power 2010 initiative to demonstrate the Nuclear Regulatory
 Commission's new licensing process for building and operating advanced nuclear
 power plant designs.  Nuclear Power 2010 is designed to get a new nuclear
 power plant under construction by that date.  To encourage energy companies,
 the program offers to share up to 50 percent of the cost of preparing an
 application for a construction and operating license (COL) to the NRC.
     The new licensing process was adopted by Congress in 1992, but has never
 been used.  The most recent nuclear power plant to begin operation, in 1996,
 was built under the old NRC licensing process.
     In a survey last week of 1,000 Americans for the Nuclear Energy Institute,
 Bisconti Research found 74 percent agreed that the Department of Energy and
 nuclear energy companies "should work together to develop state-of-the-art
 nuclear power plants that can be built to meet new electricity demand."  Only
 21 percent opposed and five percent were undecided.
     Duke Energy joins Constellation Generation Group, a subsidiary of
 Constellation Energy, Baltimore; EDF International North America, Washington,
 a subsidiary of the large French utility; Entergy Nuclear, Jackson, Miss.;
 Exelon Generation, Philadelphia; Southern Company, Atlanta; the Tennessee
 Valley Authority, Knoxville; and two nuclear reactor vendors, Westinghouse
 Electric Co., Pittsburgh, and GE Energy's nuclear operations, Wilmington, N.C.
     Duke Power, a business unit of Duke Energy, is one of the nation's largest
 electric utilities and provides safe, reliable, competitively priced
 electricity and value-added products and services to more than 2 million
 customers in North Carolina and South Carolina. In 2004, Duke Power celebrates
 100 years of service. The company operates three nuclear generating stations,
 eight coal-fired stations, 31 hydroelectric stations and numerous combustion
 turbine units. Total system generating capability is approximately 19,900
     Duke Energy is a diversified energy company with a portfolio of natural
 gas and electric businesses, both regulated and unregulated, and an affiliated
 real estate company. Duke Energy supplies, delivers and processes energy for
 customers in North America and selected international markets. Headquartered
 in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New
 York Stock Exchange under the symbol DUK.

SOURCE Entergy Operations