ENERGY POLICY:

Markets will decide nuclear's future -- FERC chairman

The chairman of the Federal Energy Regulatory Commission told nuclear industry executives today that the construction of new nuclear and coal generating plants was a possible scenario for meeting U.S. electric power needs -- an effort to tame a tempest that followed his comments last month on electric power's future.

At a meeting with reporters then, FERC Chairman Jon Wellinghoff said he thought coal and nuclear baseload generating plants may not be needed in the future. "I think baseload capacity is going to become an anachronism. ... We may not need any, ever," he said.

As the comment made the industry rounds, it got distilled into a prediction that new coal and nuclear plants likely were out of the picture, prompting widespread criticism from the industry.

Today he faced a ballroom full of nuclear industry officials at a meeting of the Nuclear Energy Assembly and did not mention the controversy in his brief, off-the-cuff remarks. He paused a moment for questions, and when none came, he prepared to leave.

But Nuclear Energy Institute President Marvin Fertel finally took up a microphone to ask what was arguably on everyone's mind in the room.

"I can't let this question go by," Fertel said, adding, "you've been quoted [as saying] you didn't see a need for baseload, either coal or nuclear, if we could just get distributed generation and renewables" added at a sufficient scale.

"I didn't say that," Wellinghoff replied. His point, he said, was that renewable energy, energy demand management, new technologies and other strategies could create "a new paradigm" for the industry.

"It is conceivable in this scenario that you may not need large central station plants," he said. "That's one scenario. That doesn't mean that scenario is in fact going to occur. But it is a scenario that is rational.

"There may be other scenarios that are rational, as well, including incorporating significant nuclear and coal into our system. Ultimately, though, it doesn't matter what might be a rational or irrational scenario. What matters is what the markets will do."

Last month, Wellinghoff did offer a prediction on that outcome, saying that he thinks new nuclear power plants appear to be cost-prohibitive. "I don't see anybody building these things," he said, "until costs get to a reasonable level."

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