|Using Federal Credit to Mitigate Critical Financial
Risks on Early Orders for New Reactors
Based on the Business Case for Nuclear Power (July 2002)
A report prepared for the US Department of Energy
"The NEPD Group recommends that the President support the expansion of nuclear energy in the United States as a major component of our National Energy Policy."
US National Energy Policy [for the Bush Administration], page 5-17, May 2001.
"To have any new nuclear plants operating in the US by 2010, it will be necessary for generating companies to commit to new plant orders by 2005-2006, to proceed with preparation of Construction and Operation License (COL) applications. This will require very near term action by prospective owner/operators and strong support from the government."
Roadmap to Deploy New Nuclear Power Plants by 2010 (NTDG, Oct. 2001).
"The US National Energy Policy promotes nuclear energy, but no specific policies are proposed to encourage construction of new plants."
IEA Review of US Energy Policy - 2002, page 13.
"The US government should provide a modest subsidy (e.g., $200/kWe) for a small set of ‘first mover’ commercial nuclear power units to demonstrate cost and regulatory feasibility."
MIT Study: "The Future of Nuclear Power", 2003, John Deutch and Ernest Moniz, page 8.
A next generation of nuclear power plants in the US would be built within more of a "risk-based" marketplace than the regulated one in which the previous plants were built. During the 1990s, utilities acquired more confidence in the current LWR and PWR technology and their ability to prevent accidents and curb downtime. Operators dramatically raised capacity factors for the US fleet of 103 reactors from below 70% in the late 1980s to well over 90% in 2002. Continued
low and stable fuel prices (<US$5 per MWh), and swift relicensing since 1998, dramatically aided the competitiveness of nuclear power; such that with just 12% of US capacity, nuclear reactors provided 20% of the country’s electricity in 2001.
Based on surveys of key owners and investment firms, business risks, not operating and technical challenges, pose the biggest hurdles to future orders. Progress was made in the US on key "showstopper" issues, notably approval by the White House and Congress to proceed with licensing of the Yucca Mountain repository in July 2002, and movement on the renewal of Price-Anderson third party indemnification. However, several critical business risks remain:
Nevertheless, the risks are definable and can be mitigated using specific federal mitigation mechanisms that allow both the public and private sectors to apportion risks for mutual benefit. Indeed, federal credit involvement in nuclear generation is justified given the evident market and regulatory failures combined with the unique public policy benefits, such as large-scale emissions savings, and conversion of warhead uranium from military purposes into reactor fuel. And the first several reactors would only be built on current sites, supported by their local communities. Growth in renewable energy, now providing less than 3% of US electricity, is forecast by EIA to merely offset a contraction in hydropower to 2020, so without nuclear power, the US cannot meet several emission reduction goals while supporting economic growth.
By stimulating the construction of new nuclear power plants, the public sector promotes progress on greenhouse gas reductions and clean air goals (including lower mercury emissions), and better insulates the economy from volatile price swings in both gas and power markets which threaten regional commercial growth and tax bases. Ratepayers, utilities and their shareholders gain from reduced risks and less volatile returns on power production assets against a market backdrop of severe equity devaluation and credit downgrades in the power sector since 2000, after the California electricity crisis and the implosion of Enron.
By virtue of the US Federal Credit Reform Act of 1990 (FCRA), federal agencies are able to execute mitigation mechanisms, principally through loans and credit enhancement tools. Moreover, government "budget scoring" impact of such mechanisms is a fraction of actual agency funds disbursed (e.g. <20%). Without federal risk mitigation mechanisms, however, it is not likely that utilities would order new nuclear reactors in the US during the next decade even with more favorable tax policies.
2. Approach & Methodology: Risk Framework and Survey of Industry Leaders
3. Risk Mitigation Through Federal Credit
4. Conclusions and Recommendations
Regions Offer Differing Locales for Considering New Reactors
A next generation of nuclear power plants in the US could be built within more of a "risk-based" marketplace than the regulated one in which the previous plants were built. "The Business Case for Nuclear Power", a study conducted by Scully Capital Services, Inc. (Scully Capital) for the US Department of Energy (DOE), concluded that orders for new reactors will likely require federal credit to address specific risks which industry cannot bear (See the "Business Case for Nuclear Power" by this author at www.nuclear.gov, under public information, then documents).
1.1 Dramatic Progress in Nuclear Operations During 1990s Improves Outlook
Nuclear power is back on the US energy landscape because several of the key factors that diminished it as a possibility, particularly in the 1980s, have remarkably turned around:
Source: "Business Case for Nuclear Power", Scully Capital Corp., 2002
The 780 billion KWh produced by US nuclear units in 2002 is up from less than 100 billion KWh in 1973, driven by the addition of 77 GWe of capacity between 1973 and 1987. All of the US commercial nuclear plants operate as baseload units.
Commercial orders were cancelled in the early 1980s, due to the worst possible combination of factors: the Three Mile Island (TMI) accident forcing substantial capital upgrades, record high interest rates (above 15%), and prolonged recession dampening electricity demand. Some units were completed in the mid-1980s, but no net capacity was added after 1989.
Figure 1: Growth in US Capacity Factor and Electricity Generation from Nuclear Energy
The fleet-wide capacity factor in the US rose from 60% in 1987 to over 90% in 2001 due to advances in management systems and practices and much shorter fuel outages; and several poorly performing units were retired. Upratings could add another 7000 MWe before 2010. However, because the US nuclear fleet is now approaching a real capacity-factor ceiling, future gains in kWh generated will be limited for nuclear power unless new reactors are built. The low marginal costs compared to volatile natural gas, and high reliability with the steady gains in capacity factor, have generated renewed interest in constructing new reactors, if only at current sites. Indeed, a dozen or more reactors (>10 000 MWe) could be added at current sites.
1.2 Regional Differences in North America Affect Market Factors
The status of electricity competition or restructuring varies widely by region and affects how utilities view off-take or dispatch risk for a new nuclear plant. Several regions are not deregulating at the retail level, particularly California, the Southeast and Plains States, and have no plans to do so. In fact, their state legislatures have openly opposed Federal Energy Regulatory Commission (FERC) efforts.
The regional grids under the North American Electric Reliability Council (NERC) include Canada (see Appendix), which operates 10 000 MWe of nuclear power (CANDU units) and is contemplating building more units. So, planning and assessment of market risks related to new electricity generation must be addressed regionally, including Canada. More CANDU reactors are being built overseas, potentially reducing their cost of construction in North America.
The reliance on nuclear power varies by region of the country, from 7% to 25%, and is even higher in some Eastern metropolitan areas (e.g., Chicago, Baltimore, Philadelphia, Charlotte). Regional population and urban growth trends and weather patterns also vary widely, so different demand drivers affect decisions for adding new power plant capacity in each region.
Table 1: Nuclear Generation in the US by NERC Region
(Note: totals do not include distributed or off-grid generation)
1.3 Onset of Electricity Competition Favours Low Capital Cost Generation
All nuclear plants now operating were built under a "capital cost recovery – prudent return" framework sanctioned by State utility commissioners during the 1960s–1980s. This removed many risks, including commissioning risk, market off-take and pricing risk, but saddled customers with recovery of higher capital costs.
Restructuring and deregulation have involved separating power generation from power distribution to create competition at the wholesale level. However, these processes created uncertainty in planning for new baseload power plants. After the California electricity crisis in 2000 and alarming price spikes followed by utility bankruptcies, electricity deregulation or legislation promoting competition was stalled or reversed in several States or regions, particularly in the Southeast and Plains States. Restructuring and deregulation are focused in certain States and NERC regions, particularly New England (NPCC), except in Vermont, and MAAC, plus the "Rust Belt" industrial states (IL, MI, OH, PA) in ECAR, and MAIN. Deregulation continues in Texas (ERCOT), Arizona and New Mexico. Restructuring has been limited in the Southeast (SERC, FPCC, SPP) and in the Plains States (MAPP). Restructuring has been suspended or delayed in much of the West (WSCC) and in California (see Figure 2).
Overbuilding of gas-powered generation after 1998 (>200 000 MWe in four years), followed by bankruptcy and massive devaluations in the merchant power sector – AES, Calpine, Dynegy, Mirant, Reliant, and Williams - has created a glut in gas-fired capacity, perhaps through the end of the decade. But a new nuclear plant could not in any case be completed before 2010 anyway.
The loss of cost recovery pricing of electricity tilts the field against high capital cost electricity generation (principally coal and nuclear). However, long term contracting and the slowing of electricity restructuring in certain regions could allow consideration of nuclear units, which have now demonstrated their competitiveness on a marginal cost basis. The sharp rise in volatility of natural gas prices since the California electricity crisis, combined with a negative long-term outlook for gas supply and transmission in the US, also poses advantages for nuclear power.
In fact, since 1998, operating reactors attracted investment as utilities bought 18 units (>11 000 MWe; see table in Appendix), primarily from municipal entities in the Northeast. In other words, reactors, once commissioned, are competitive enough to garner investment backing.
1.4 Status of Restructuring and Electricity Competition in the US
The United States remains a patch quilt of regulatory regimes at the State and regional level. The Federal Energy Regulatory Commission is trying to foster the formation of five "Regional Transmission Organizations" (RTOs), to better clarify market pricing and transmission.
2: Electricity Regulation by State
2. Approach & Methodology: Risk Framework and Survey of Industry Leaders
The authors adopted the well-developed Delphi Method, which allows experts and industry leaders to deal systematically with a complex problem or evaluation. The Delphi Method is based on a structured process for collecting and distilling knowledge from a group of experts by means of a series of questionnaires interspersed with controlled opinion feedback. Delphi represents a useful communication approach among a group of experts and thus facilitates the formation of a group judgment. This approach is particularly valuable when confronting a new and technologically-based phenomenon where prior history and data points are limited, or so out of date as to be of limited utility. Such is the case with the next wave of nuclear reactors in the US because no new units have been ordered since 1979.
A substantial financial model was also constructed to evaluate financing requirements, cash flows and return on investment from an owner/operator view based on multiple variables. This model, and an extensive sensitivity analysis on key financial assumptions, helped guide the evaluation of federal credit mechanisms based on rating of project risks.
The following risk framework guided the interview and risk evaluation process within the timeline perspective of a reactor project, and then the formulation of mitigation mechanisms, including utilizing federal credit to address the risks most affected by federal policies and actions:
3: Risk Framework used for Business Case to focus Federal Credit
2.1 "SWOT"Analysis Underlies Evaluation of Risks
A review of "Strengths, Weaknesses, Opportunities and Threats" for nuclear power helps sketch the risks associated with building new reactors. Via a roundtable of executives (conducted in May 2002) and discussions with utilities, vendors, regulators and energy sector experts, the authors compiled this SWOT summary as background for evaluating a risk framework:
Major Strengths for Nuclear Power:
Major Weaknesses for Nuclear Power:
Major Threats for Nuclear Power:
2.2 Results: Risk Ratings by Industry – October 2002
An objective of this study was to obtain an update from leading industry executives on the evolution of the key risks facing new nuclear power plants, and to improve understanding of the issue of earnings dilution, an issue of concern to utility decision makers. With the SWOT analysis as a background, the specific areas of risk were identified by industry and the financial community as important to their evaluations as they make decisions related to potential new power plants:
4: Results of Ratings of Risks (October 2002)
Ten leading utilities and nuclear vendors were surveyed on the key risks associated with ordering, building and operating new nuclear reactors.
According to interviews, the risks that utilities continue to perceive as the greatest are concentrated in the financial domain, versus operating or technical. Those risks include:
Other risks evaluated and rated include:
3. Risk Mitigation Through Federal Credit
The Business Case for Nuclear Power, conducted by Scully Capital for the US Department of Energy (DOE), analysed a number of financial and risk-sharing tools that DOE might pursue as part of a programme to encourage the development of new nuclear power plants.
Government can best contribute to address risks where it controls most of the outcomes or has the unique ability to underwrite certain risks, such as commissioning and regulatory risks. Other risks must be negotiated between government and industry in several domains.
Since the publishing of the Business Case in the summer of 2002, federal credit mechanisms have emerged as a favoured option among industry and US policy makers, culminating in the introduction of the Nuclear Energy Finance Act of 2003 in the Senate Energy Bill (S.14). Under the proposed legislation, financial assistance may take the form of a loan guarantee, power purchase agreement or some combination of both. Although the legislation has yet to be passed in its current form and numerous details that could affect the impact of the proposed financing assistance have yet to be determined, the use of federal credit instruments offers an opportunity to bridge the current financing challenges faced by the industry. According to Standard & Poor’s, "the versions of the Energy Bill circulating around Capitol Hill may indeed mitigate enough of the risks that would otherwise dissuade investors from financing new nuclear capacity". In addition, the Department of Energy Acquisition Regulations (DEAR), section 932.70, allows DOE to utilize loan guarantees under certain circumstances. The types of federal credit mechanisms, how they apply within the federal context, and their budgetary treatment are described briefly below.
3.1. Types of Federal Credit Mechanisms
Federal credit instruments are generally structured under one of two forms: direct loans or loan guarantees.
Under either instrument, the government will undertake a rigorous loan underwriting process to ensure that its interests are well protected. As part of this effort, the government will look to the financial feasibility of the proposed financing and the security that underpins creditworthiness. As a general matter, direct loans and loan guarantees are introduced to address specific gaps in the financial markets, thus affecting a specific political or social outcome. Oftentimes, the credit instruments offer favourable terms in repayment characteristics, final maturity, and interest rates. As a result, the use of federal credit mechanisms is widespread, ranging from federal direct student loans to airline guaranteed loans.
3.2 Federal Credit Reform Act of 1990
Under the Federal Credit Reform Act of 1990 (FCRA), the government standardised its treatment of federal loans, requiring the long term cost of such loans to be scored on budget and in present value terms during the year that the loan commitment is made. Additionally, FCRA assigned the Office of Management and Budget (OMB) with the responsibility of reviewing legislation introduced to establish new credit programmes and to monitor performance with FCRA. OMB is assisted by the Department of Treasury (Treasury) in reviewing federal credit policies and proposals to introduce or expand credit programmes. Key OMB considerations for new programmes include the following:
3.3 Federal Credit Example: DOT’s TIFIA Programme
Over the past three years, the Department of Transportation (DOT) has utilized federal credit instruments to target specific needs within the transportation sector. Under the Transportation Infrastructure Finance and Innovation Act (TIFIA), DOT has committed to US$3.6 billion in direct loans and/or loan guarantees. In developing the TIFIA programme, DOT focused on the following six key principals:
Based on these principals, TIFIA offers direct, flexible payment loans from the federal government, loan guarantees by the federal government that are funded by private capital sources, and standby lines of credit that represent secondary sources of funding that may be drawn to supplement project cash flows in the early stages of the project. A significant consideration in the types of projects targeted by the TIFIA programme is the lengthy project development and construction period associated with transportation infrastructure and the high capital component associated with transportation project economics. As a result, project developers have been challenged in developing financing approaches for large transportation infrastructure projects. On the other hand, transportation projects tend to result in long-lived assets that produce cash flows well beyond the traditional terms associated with conventional financing. Therefore, these projects are well suited for federal credit instruments as the federal government represents a "patient investor". Since its implementation in 1999, the TIFIA programme has committed to 11 loans representing US$15.4 billion in project costs. As part of its participation, the government loans occupy a subordinate position in terms of project cash flows allowing the private capital markets to recruit principal and interest before the government receives payments. In spite of this subordinate position, however, the scoring impact related to these projects has been quite low. In fact, the financing commitments under TIFIA have totaled US$3.6 billion in federal credit assistance, but the overall scoring impact has been US$190 million (5.3%).
3. 4 The Suitability of Nuclear Energy to Federal Credit Instruments
The TIFIA programme offers interesting parallels to the development of nuclear power. Specifically, capital intensity, long construction cycle, involved permitting process and long-lived nature of these assets are similar to transportation infrastructure. However, unlike transportation infrastructure, nuclear energy facilities have been developed in the US principally through private financing. Given the challenges enumerated above, however, the role of the federal government in facilitating the financing and construction of new facilities is both timely and critical. Like transportation projects, nuclear facilities are long-lived assets, which can provide a stable return for a "patient investor". Additionally, the existing challenges in the energy sector as a whole and with regard to capital intensive projects like nuclear power plants, all but preclude the development of new facilities under a purely privately financed approach. Therefore, the use of federal credit instruments to address the existing gaps in the private capital markets appears both justified and well suited to the cash flow characteristics associated with nuclear power. As a "patient investor", the federal government can facilitate private sector investment, leveraging federal dollars and meeting stated policy objectives.
3.5 Discussion of Federal Credit Instruments
Considering the role of the federal government in facilitating the financing of new nuclear capacity, it is informative to understand the options available to agencies in facilitating the development of credit programmes. Specifically, pursuant to the Federal Credit Reform Act of 1990, federal credit programme legislation can be enacted and implemented in order to achieve specific social and economic goals. Financing mechanisms developed under this programme typically consist of direct loans, in which the government disburses funds to a borrower, or loan guarantees, in which the government guarantees a loan disbursed by a third party lender to a borrower. Under either instrument, the amounts requiring appropriation are limited to the "subsidy costs" of the instrument. That is, the estimate of the present value of cash flows from the government, less the estimate of the present value of cash flows to the government discounted to the time when the loan is disbursed. This difference in cash flows equates to what private lenders call a "credit loss estimate" and represent the amount that is scored for budgeting purposes. The implications of this treatment are that significant funds can be created to address gaps in the capital markets while at the same time minimizing the budgetary impact. This type of financing mechanism has been implemented successfully in numerous other government programmes (e.g. TIFIA). Like nuclear generating facilities, the TIFIA programme was developed to consider the long-term cash generating factors of a target transportation project (which extend well beyond the terms associated with a conventional financing) and the unique ability of the federal government to be a "patient investor" in projects that could operate up to 60 years, and transportation projects provide lasting value, enabling investors to recover a substantial portion of principal even in the event of a loan default. Accordingly, federal credit instruments provide the project with a financing source that offers long payback periods while also limiting the budgetary exposure to the expected credit loss associated with the project.
3.6 Implications of the Proposed Energy Policy Act of 2003
Under the Nuclear Energy Finance Act of 2003, the government would provide financial assistance to project developers in order to facilitate the development of a limited number of nuclear power facilities. The specific forms of financial assistance include loan guarantees for up to 50% of eligible project costs and power purchase agreements. The prospect of loan guarantees would address the current issue of the availability of financing for nuclear power projects as well as industry concerns over delays related to commissioning. Specifically, as the guarantor of the project debt, the government, in effect, would be exposed to the risks associated with a regulatory- and/or intervenor-caused delays. The use of power purchase agreements could address market risks over the debt repayment period, providing additional financial stability to the project. Under this type of assistance, funds would not be drawn upon until the facility is commissioned and thus would not be exposed to construction and commissioning risk. DOE’s Power Marketing Administrations, which operate the nation’s hydroelectric dams, already execute such power agreements for wind power and other sources.
The proposal for providing credit-based financial assistance to nuclear facilities offers significant potential for the US nuclear industry. By facilitating the development of the first few nuclear reactors, the critical yet uncertain risks associated with construction cost and commissioning would be addressed. A positive experience in the facility development combined with the current outstanding operational performance of these facilities would facilitate greater private sector investment infrastructure.
The FCRA changed "the budgetary measurement of cost for direct loans and loan guarantees from the amount of cash flowing into or out of the Treasury to the estimated long-term cost to the Government. Only the un-reimbursed costs of making or guaranteeing new loans are included in the budget". Accordingly, under the FCRA, the required budget authority is calculated by estimating the expected un-reimbursed cost associated with a loan or guarantee. This amount is referred to as the "subsidy" amount. Based on OMB’s guidelines, agencies calculate a subsidy amount based on the present value of the cashflows from the government, less the estimated present values of the cashflows to the government.
The subsidy amount is influenced by two factors: the time value of money and the credit loss (CL) risk associated with the loan. The first factor (time value of money) is determined by calculating the difference between the interest rate charged under the loan and the interest cost to the government as measured by long-term US Treasury Bond yields. The second factor (credit loss risk) is calculated by determining the expected value of net cash receipts foregone due to loan defaults. The credit loss risk reflects two key elements:
The credit loss risk is calculated by multiplying the probability of default by the loss-given-default-rate. By subtracting the credit loss from the required loan repayments, the expected value of loan receipts to the government can be determined. The subsidy amount reflects the credit loss risk plus any differences due to the time value of money. That is, the present value of the amounts disbursed minus the present value of the expected receipts equals the subsidy amount. This subsidy amount is then required as budget authority from Congress. Additional amounts of budget authority would be required to establish and administer the credit programmes. This cost was not examined, but is de minimus and could be recouped in part through fees charged to programme recipients.
Collectively, these tools would mitigate the most difficult-to-manage elements of project risk for the first few new plants and improve project internal rates of return so that they approach the acceptable range. By implementing these tools, DOE would be supporting a fuel source that is more secure, has an attractive emissions profile, and improves the fuel diversity of the US energy generation system at a time of increasing volatility, as evidenced this winter by natural gas prices jumping to a range of US$4-6 per million Btu, with spikes toward US$10.
In examining the Nuclear Energy Finance Act of 2003, the Congressional Budget Office (CBO) reviewed the implications of the Guaranteed Loan programme on the federal budget and concluded that 50% would be "on budget", therefore, requiring appropriations. This estimate was based on a probability of default of 50% and a loss-given default rate of 60%. While industry has been quick to argue that the CBO’s assumption that industry would move forward with projects that exceed current estimates by over a factor of two, the estimate illustrates the potential leverage associated with government participation, even under highly conservative assumptions. Moreover, through careful project selection, prudent risk allocation, and other forms of government participation currently under consideration (e.g. power purchase agreements) the probability of default could be significantly curtailed, substantially reducing budget scoring.
4. Conclusions and Recommendations
A next generation of nuclear power plants in the US would be built within more of a "risk-based" market place than the regulated one in which the previous plants were built. During the 1990s, utilities acquired more confidence in the current LWR and PWR technology and their ability to prevent accidents and curb downtime. Operators dramatically raised capacity factors for the US fleet of 103 reactors from 60% in the late 1980s to well over 90% in 2002. Continued low and stable uranium fuel prices (<US$5 per MWh), and swift relicensing since 1998 dramatically aided the competitiveness of nuclear power; such that with just 12% of US capacity, nuclear reactors provide 20% of the country’s electricity.
Based on surveys of key owners and investment firms conducted in 2002 by the authors of this Paper, business risks – such as elevated capital costs (>US$1600/kWe), licensing delays, uncertainty of market pricing and off-take of electricity, or transmission congestion – and not reactor operating and technical challenges, pose the biggest hurdles to future orders. A survey of leading nuclear utilities and vendors conducted in October 2002 noted several "showstopper" issues, which if not resolved would result in no future orders of nuclear reactors:
Nevertheless, the risks are definable and can be mitigated using specific federal mitigation mechanisms that allow both the public and private sectors to apportion risks for mutual benefit. Indeed, federal credit involvement in nuclear generation is justified given the prospect of market and regulatory failures combined with the public policy benefits of nuclear power, principally electricity generation without air pollution and conversion of warhead material. And, the first several reactors would only be built on current sites, supported by their local communities. Growth in renewable energy, now providing less than 3% of US electricity, is forecast by EIA to merely offset a contraction in hydropower to 2020, so without nuclear power, the US cannot meet several emission reduction goals while supporting economic growth.
By virtue of the FCRA and DOE Acquisition Regulations (DEAR 932.70), federal agencies are able to execute mitigation mechanisms, principally through loans and credit enhancement tools, even power purchase agreements structured as loans. Moreover, government "budget scoring" impact of such mechanisms is a fraction of actual agency funds disbursed. Without federal risk mitigation mechanisms, however, it is not likely that utilities would order new nuclear power plants in the US during the next decade even with more favourable tax policies. The negotiation and tailoring of federal credit to specific risks where the federal government carries a lead role (e.g. commissioning, regulatory, waste disposal and indemnification) offers a path forward to preserving nuclear power as a vital fuel source in a diversified national energy portfolio.
NERC Regions Offer Differing Locales for Considering New Reactors
Although most consumers and voters are not aware of these facts, the United States does not have a national grid and the US grids are integrated with Canada. NERC coordinates power delivery and reliability within and between ten regional grids in North America (Alaska, Hawaii, and Mexico excluded). Three major NERC regions include Canadian provinces that also provide power to the United States. Regional grid operations also provide some insulation from a nationwide power shutdown. Hence, regional developments in Canada, beyond gas supply, have an impact in planning for US electric capacity. For example, power from nuclear units built in Canada (e.g., CANDU reactors) could be "wheeled" into the United States, as hydropower now is in the NPCC region.
Detailed Tabulation and Analysis of Risk Ratings
Ratings by industry were made utilizing a Delphi methodology approach, and updated from those taken in May 2002 for the Business Case, among virtually the same respondents:
Detailed Analysis of Risk Ratings by Probability vs. Severity of Consequence – October 2002
The survey of ratings was plotted as a two-value rating of "probability of occurrence and an assessment of "severity of consequence".
Progress on Reactor Relicensing Improves Outlook for Nuclear Power
Swift reactor relicensing since 1998 combined with competitive marginal operating costs has improved the outlook for consideration of building new reactors.
Source: NRC (www.nrc.gov)
Ownership of US Nuclear Plants is Consolidating in Strong Hands
Consolidation of the current nuclear fleet under the management of fewer utilities has improved overall technical and financial performance. The larger owners, now with 75% of U.S. capacity, are able to manage a portfolio of units. They can consider financing new units based on a larger balance sheet of total asset value.
Source: Business Case for Nuclear Power
Acquisitions of US Nuclear Plants Moves Reactors from Public to Private Sector
Several acquisitions since 1998 transferred plants from municipal ownership to private hands.
Source: NEI, Business Case for Nuclear Power (www.nuclear.gov)
© copyright The World Nuclear Association 2003