Nuclear Energy Could Be Key to Energy Compromise

At a press conference at NEI, Alex Flint, senior vice president for government affairs at NEI, discussed some priorities for the upcoming Congress. The question-and-answer session with reporters focused on several key issues affecting the nuclear energy industry: a clean energy standard, DOE loan guarantees, EPA water regulations, the Nuclear Waste Fund fee and a federal corporation for managing used nuclear fuel. A recurring theme was that nuclear energy could be an area for bipartisan cooperation on energy legislation in the new Congress. Original reporting from NEI’s Nuclear Energy Overview follows: 

Nuclear energy might hold the key to a compromise on energy legislation in the next session of Congress, an NEI executive told reporters during a briefing on the impact of the midterm elections on the nuclear energy industry.

“Nuclear energy is at the center of the debate about energy policy,” said Alex Flint. “We view it as the middle ground on which both parties can compromise and, if they’re going to pursue energy legislation, one of the foundation elements in that policy.”

Flint’s remarks echoed statements last week by President Obama, Senate Minority Leader Mitch McConnell (R-Ky.) and Rep. John Boehner (R-Ohio), the presumptive House speaker, citing nuclear energy as common ground which both Democrats and Republicans could seek in crafting energy policy.

A clean energy standard might garner broader bipartisan support and would include nuclear energy and other low-carbon options in addition to renewable energy sources, Flint said. 

“If a renewable energy standard is expanded into a clean energy standard, we do believe that the technologies have to be evaluated based upon their ability to contribute to the objectives,” Flint said. “As a result, we need to expand the suite of technologies that qualify for a clean energy standard.”

Asked about the potential for greater fiscal austerity in the new Congress, Flint said that there are ways for Congress to offer incentives that do not have a large budgetary impact. 

“Clearly, there is a concern about spending money, but the issue becomes what is the most effective way of spending money? Loan guarantees provide tremendous leveraging opportunity,” Flint said. “For our industry, the applicant pays the costs to the government, yet it encourages behavior that would not otherwise occur. Loan guarantees are a very effective way for government to affect policy at a minimal cost.”

Flint said that effective implementation of the DOE loan guarantee program is a top policy priority for the industry.

“Can DOE, working in conjunction with OMB [the Office of Management and Budget], effectively implement that program?” Flint asked. “We’ve seen limited success with the Vogtle reactors and the Eagle Rock enrichment plant, but clearly there are frustrations that others are experiencing.”

Flint said that the method for determining the fees that companies must pay to access the loan guarantees for nuclear energy projects is critical to the success of the program.

“Nuclear loan guarantee applications are each unique and the numbers are sufficiently large that we think each application needs to be evaluated individually. It’s a different approach than OMB has been taking to date, but if we could get that done, the program would be much more effective.”

Flint said the industry is closely monitoring a proposed rulemaking by the U.S. Environmental Protection Agency to implement phase II, Section 316(b) of the Clean Water Act, expected as early as February 2011. The proposal will determine what actions may be necessary at more than 400 power plants to protect the environment from the possible effects of cooling water intake structures.

“There are a lot of regulations coming out of EPA that affect electricity generation. Probably the most impactful is 316(b),” Flint said. “Our view is that you can’t have a blanket policy on cooling water intake structures—there needs to be site-specific consideration. There are a lot of variables that will affect what the best technology is for each site.”

Asked whether NEI would continue to pursue the suspension of fees into the Nuclear Waste Fund, Flint said the issue is an industry priority.

“It’s something we’re going to be pursuing quite strongly. We are obligated to pay for a program that is not functioning,” Flint said. “Our view is that the government should be implementing the Nuclear Waste Policy Act.”

Flint said that in addition to suspending the Nuclear Waste Fund fee, Congress should create a federal corporation to provide more efficient management of the federal government’s used nuclear fuel management program. “A Fed Corp-type organization is the most appropriate structure for pursuing the used fuel program,” Flint said. “They are really two issues: what is the program—and how to implement the program.”

Regardless of the path forward, nuclear energy is seeing increased support from both sides of the aisle, Flint noted. “We have seen a substantial increase in support for nuclear energy over the last several years,” said Flint. “We find ourselves now with broad-based political support from both parties.”

The entire press conference is at NEI’s YouTube site in five parts: Part I, Part II, Part III, Part IV and Part V.