FW: The Price Anderson Act

-----Original Message-----
From: Burk, Bart
Sent: Wednesday, May 02, 2001 12:33 PM
To: Gaskill, Chris
Subject: The Price Anderson Act - Nuclear Power

I called the Nuclear Information and Resource Service in D.C. and spoke to a
representative. He mentioned that the Price Anderson Act has brought about
opposition in the past, but has typically breezed through the renewal
process. The NIRS website seemed to more anti-nuclear power focused, so it
was interesting that he did not see the Act as having any trouble in its
renewal.

My perspective is that nuclear power accounted for about 20% of all power
generation last year, and would cause rolling black-outs if ceased. Politics
and recent surveys of the positive turn in public opinion suggests that it
would be highly unlikely for nuclear power to be phased out. Nuclear plants
nearing the end of their initial useful life period - around 30 years - have
already begun an extension process. Five reactors have been licensed for
another 20 years of operation. The WSJ article stated that within the next 15
years, 40% of the 103 licensed U.S. reactors are likely to request similar
extensions.

Independents are buying-up the plants from utilities and taking advantage of
high power prices and low nuclear fuel costs. The new technologies mentioned
in the article suggest that an overrun of construction permits may be filed
in the near future. Smaller megawatt units operate at lower temperatures, and
are thus less susceptible to catastrophic failure if their cooling systems
are crippled. Investment costs are modest, construction times are faster,
power could be supplied in a shorter period of time, and the NRC has improved
the time for the approval process. Companies could re-coup their costs and
make decent profits within a short period, even if there were fears of
negative opposition down the road.

A negative outcome for the Price Anderson Act renewal could slow plans to
build new nuclear plants, but it is likely that existing plants will continue
to operate. At a minimum, base load nuclear power generation should be flat
over the next couple of years.

Bart R. Burk, Jr.
Enron Corporation
Gas Fundamentals Research
Phone: (713) 345-3635