Will U.S. EPA include more specificity and opportunities for nuclear power in its final rule for regulating emissions from existing power plants? During today's OnPoint, Marv Fertel, president and CEO of the Nuclear Energy Institute, discusses the future of nuclear energy as part of the Clean Power Plan and talks about market conditions that are affecting the viability of nuclear in the United States. Fertel also explains why he believes both the House and Senate will pass energy legislation during the 114th Congress.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Marv Fertel, president and CEO of the Nuclear Energy Institute. Marv, thank you for coming back on the show.
Marv Fertel: Thank you, Monica, for inviting me back.
Monica Trauzzi: Marv, this week the Senate confirmed Jeffery Baran to be a member of the Nuclear Regulatory Commission. NRC has gone through a series of changes recently. How would you qualify the viability of NRC now at this point, and should Americans trust in the agency as it looks now?
Marv Fertel: Well, I think, first of all, we need to remember that the commission, while it's very, very important, there's 4,000 technical and scientific people that work there. It's a very, very competent agency, and the commission itself right now -- I mean, Steve Burns that's on the commission has 30 years' experience. Commissioner Ostendorff and Commissioner Svinicki have been there for, I think, eight years or more now, and Commissioner Baran, who was just recently confirmed, while he hasn't been there a long time, seems to be a very quick study, based upon his answers to questions at the hearing the other day.
Monica Trauzzi: So you're feeling good about where the commission is at this point?
Marv Fertel: We're always feeling good that we like a full commission with objective, collegial performance, and having smart people work there is a good thing not only for us as an industry but for the country from a safety standpoint.
Monica Trauzzi: So, shifting gears, the public comment period for EPA's Clean Power Plan came to a close last week, and with that we saw many comments from a variety of viewpoints requesting that the agency include more specificity on nuclear power and opportunities there. Do you think the agency will make major changes in the final rule relating to nuclear and including nuclear?
Marv Fertel: Yes, we do. We've obviously commented ourselves. We've met with the agency heads and with a number of their staff a number of times now. We think that the way new plants was being treated was completely wrong. We think that'll get changed so that new plants aren't put into the rate setting but are used for compliance. Existing plants is a bit tougher for them to deal with, and at least our recommendation was that they have the states really tell them what they would do to help the existing plants continue to operate. The agency understands how important nuclear is to meeting the president's goals and to meeting their rules.
Monica Trauzzi: Former Deputy Administrator Bob Perciasepe was on this show last week. He left EPA back in August, and he made the case for preservation of existing nuclear power plants in the agency's final rule. Do you think the market conditions and the economics support that, though?
Marv Fertel: Well, we think the market conditions in some of the markets are beginning to improve. We have been arguing, as have some of the companies, that nuclear does not get the value it should in the markets. During the polar vortex a year ago in January, what we saw were nuclear plants continuing to operate, providing a lot of electricity, and it's because there's fuel in the core. They get no benefit for that. The fact that they don't admit anything, they get no benefit for that, so we're seeing the markets -- PJM has got a proposal on capacity markets, which may be very helpful, so we're seeing some -- there's a recognition. Let me put it this way. There's a recognition within the policy organizations that they need to do something or they're going to lose more nuclear plants. We're shutting down Vermont Yankee as we sit here and talk.
Monica Trauzzi: And does it make economic sense for utilities and states to include nuclear as part of the portfolio as they work on the compliance plans to comply with EPA's Clean Power Plan?
Marv Fertel: We don't think they can meet the compliance plans if they don't have their nuclear plants, to be honest with you. We think that the way they could look at that is how do you -- most -- a lot of the states, I guess 31 of them, have renewable portfolio standards. We think they ought to be looking at clean energy standards. I mean, nuclear is the largest source of non-emitting electricity in the nation. It's two-thirds of it almost, so we think it should be included in the clean energy standard, and that would be a big plus.
Monica Trauzzi: Market dynamics are still tough, though, so beyond the Clean Power Plan, what else are you looking for to make nuclear more competitive?
Marv Fertel: Well, on our side, what we're looking for is to continue to make the burden on nuclear and the course for producing power from nuclear cheaper. How can we be more efficient? How can we make sure that the regulatory requirements are all focused on safety and not just additional burden? I think when you look at some of the plants that're at risk, they're basically $0.03-per-kilowatt-hour plants. They're very, very economically competitive, so there's something wrong in the markets that aren't allowing them to make money as opposed to the plant itself. It's not a very competitive plant. I mean, even Kewaunee that shut down a year ago -- Kewaunee right now will be cheaper than what they're going to put in to replace it, which are going to be gas plants that will ultimately cost more than the power from Kewaunee.
Monica Trauzzi: So, Republicans will have majority control in Congress come January. Does that mean nuclear power is back in business?
Marv Fertel: Well, we've actually had pretty good bipartisan support, even with the Democrats in control. I think one of the things we'll see with Republicans in control of both the House and the Senate is I think we will see a used-fuel management program go forward, which will include Yucca Mountain, at least in the House, and some of the other things that we would like in both, we hope, the House and the Senate, which would include a new organization. We think consolidated storage is going to be necessary until we can get the repository operational, but we do see used-fuel legislation going forward in both houses.
Monica Trauzzi: And then will the president sign that?
Marv Fertel: I guess it'll depend on what's in it. We would hope so.
Monica Trauzzi: You expect the next Congress will also take up energy legislation and that it will likely pass. What do you predict would be included in that?
Marv Fertel: Well, I think it's going to be initially very focused on oil and gas. That's going to be a big focus. I think on the nuclear side what we're looking at in addition to used-fuel legislation would be good oversight from the committees both in the House and the Senate, and I say good meaning constructive oversight of the NRC. I think there are some things that could be done. It's not a nuclear issue, but I think reauthorization of the Ex-Im Bank is very important to our industry, as well as a lot of other industries and jobs in America.
Monica Trauzzi: Right, and that's coming up in June. So, we'll end it there. Thank you for coming on the show. Nice to see you as always.
Marv Fertel: Thank you, Monica. Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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