Is the Nuclear Regulatory Commission’s (NRC) approval of the first license for a nuclear reactor in over 30 years the start of the nuclear renaissance? We hope so. But as any Washington Capitals fan will tell you, it’s hard to predict how a season will turn out based on the first eight games. In hockey, a strong start can help build to a long playoff run. But it requires building on early momentum. The same can be said for nuclear energy. This is a huge step for the sector – and for anyone who wants the United States to build more reliable, affordable, clean energy.

So how does nuclear build on this momentum?

The key factor is completing the Vogtle plant on time and on budget. The high cost of private capital has long been a major force holding back nuclear energy. Given that the last nuclear reactor was built more than 30 years ago, investors do not have any data to determine how long it will take to build a new nuclear plant or how close to budget estimates it will be. Showing potential investors that there is a clear path to building a new nuclear power plant can help loosen the purse strings for future reactors and reduce the cost of borrowing capital.

We can’t forget the need for balance. Injuries have forced the Capitals to rely on too few players to do too much. The same might be said of the United States’ electricity fuel mix. It’s understandable that utilities and investors are attracted to the far lower price of natural gas—the main alternative for new, base load electricity in the U.S.—at the moment. Natural gas is and will remain a vital and growing part of our country’s electricity fuel mix. The U.S., however, has experienced the downside of an energy sector too reliant on one fuel source. Power plants are built for 40 years or more of use. We simply do not know what factors will be driving fuel prices 10 or 15 years from now. The decision to build the Vogtle plant, and hopefully additional plants, is a smart clean energy hedge against this unknown.

Finally, there’s the issue of confidence. The Fukushima disaster raised or deepened many Americans’ concerns about nuclear energy. But public opinion research has found that the closer Americans live to a nuclear facility, the more confident they are in its safe operation. Why? Because they understand the NRC’s rigorous regulation and the standards the industry holds itself to. The completion of the new Vogtle plants creates a national platform to build Americans’ confidence.

This April, we’ll know whether the Capitals’ 8-0 start launched them to the playoffs. It will take longer to know whether last week’s NRC approval of the license for Vogtle launched a nuclear renaissance. But as the first new nuclear reactors to be built in the United States in over 30 years, it is an enormous step in the right direction.

The nuclear industry is not poised for its renaissance after more than 30 years of stagnation, and the nuclear projects in questions are unique in that they have attracted federal loan guarantees and are in a State with a state utility commission willing to accommodate the industry. Nuclear power plant costs are ballooning while natural gas prices are plummeting. O&M and security costs for nuclear plants are several orders of magnitude higher than natural gas generation, and nuclear waste costs are the highest of any waste of any energy technology. Aside from concerns about terrorism, including cybersecurity, nuclear plants cannot be ratcheted incrementally higher and lower as with natural gas plants. With a weakened economy, the chance that the highest cost energy will have a resurgence is rather comical. Yes, there will be a few plants, but after their price tag is known, there will be few followers.

The Nuclear Regulatory Commission's (NRC) historic decision last week to approve the construction of the first new nuclear power plant in this country since the accident at Three Mile Island is certainly a major milestone.

Not only is it the first new license since 1978, it’s the first ever streamlined combination construction and operating license. The two reactors approved at the Vogtle site in Georgia are to be built by the Shaw Group using the new Westinghouse AP1000 design, which features innovative technology that relies on passive systems to cool the reactor. The NRC also showed that it could meet the challenge of successfully licensing nuclear power plants again, despite three decades of dormancy. This milestone was achieved over the dissent of NRC Chairman Greg Jaczko, who further put himself at odds with the Commission's professional staff and four other Commissioners.

Proponents of nuclear energy -- and few are more pro-nuclear than me -- have to be encouraged by last week's historic approval. Could it signal the long awaited renaissance of nuclear power, the safest, most reliable, and most environmentally benign source of base-load generation?

While the Vogtle license is a very positive development, nuclear power is still far from returning to its glory days, at least in our country. Market forces, more so than regulatory constraints, may work against a meaningful return of nuclear power. Utility executives will be hard pressed to order nuclear units when the market is currently awash with cheap natural gas. Nuclear power requires a sizable capital investment (the two Vogtle reactors are slated to cost $14 billion) and years to build (the first Vogtle unit isn't scheduled to begin operations until 2016). Natural gas generating plants are less capital intensive and quicker to build (but utilities may become too reliant on highly variable gas prices).

With existing nuclear technology, utilities are also required to buy massive 1,000 megawatt units. The two Vogtle units will produce as much electricity as 1,000 large wind turbines, and unlike wind, nuclear power operates at full capacity 24-7, not just when the wind is blowing. Today’s dynamic marketplace seems to prefer smaller, more adaptable energy generation. The development of the small modular reactor technology should address this problem, and make the generation of nuclear power more attractive investments.

While economic issues are bigger factors, nuclear also needs to solve its political Achilles heel – long-term disposal of radioactive waste. The nuclear power industry should remain committed to the statutory nuclear waste solution, the Yucca Mountain repository. Hopefully the DC Circuit Court of Appeals will uphold the law this summer and affirm the Yucca repository. Otherwise, we may be forced to proceed with another tortuous site selection process that will allow environmentalists to take the high ground with their argument that no new nuclear should be constructed until we have a long-term nuclear waste disposal option.

So, congratulations to the nuclear power industry and the NRC (Mr. Jaczko notwithstanding) for an important milestone. While it may not foreshadow a full-scale nuclear renaissance, it is nonetheless a necessary step in the right direction.

The Nuclear Regulatory Commission’s approval of the new units at Plant Vogtle is an important development for both the nuclear industry and our country. With the issuances of these licenses, the industry knows what to expect moving forward, sending a strong signal to the critical stakeholders, including both the investment community and, significantly, the State regulators that NARUC represents. A predictable investment climate can lead to stable rates. At the end of the day, we hope the big winners are the consumers who pay for the bulk of building these plants.

Still, the industry has several hurdles to clear before we can call this a full-blown “renaissance.” The biggest hurdle now is getting potential investors to look at the operating life of a nuclear plant—likely to be 60 years—and be confident that it will prove a good economic choice. With the current excitement over suddenly abundant shale gas, there may be a tendency to believe natural gas prices will remain a lower cost option.

Another hurdle is that the nation’s nuclear-waste policy remains at an impasse. Despite the billions consumers have paid into the Nuclear Waste Fund for three decades, we are perhaps further from a solution than we were in 1982, when Congress passed the Nuclear Waste Policy Act.

The recent report from the Blue Ribbon Commission of America’s Nuclear Future offered numerous positive recommendations. NARUC, in a resolution approved last week, supports many of them, particularly the proposals that reform the Nuclear Waste Fund.

Many of the BRC’s solutions require congressional action, no sure bet in any political atmosphere, and certainly an unlikely one now. Sen. Lisa Murkowski, speaking to us at our Winter Committee Meetings last week, said she is working with Senate Energy and Natural Resources Committee Chair Jeff Bingaman on legislation on the BRC recommendations. Regardless of near term legislative outcomes, we believe that it is important that the recommendations be debated this year, particularly the future of the financing mechanism.

It is also a positive development that new technologies like small modular reactors are moving forward to revitalize the industry. While the Fukushima disaster rightly focused the world’s attention on nuclear safety, we know nuclear energy remains an integral piece of the nation’s energy mix. President Obama called for an “all-of-the-above” energy strategy, and the NRC actions last week help solidify nuclear energy’s role.

Three years ago, MIT’s Richard Lester published a simple analysis of what would be required to meet President Obama’s 83%-by-2050 greenhouse gas emission reduction target. The results were stark: Even if energy efficiency were to improve at rates 50% better than historical averages, and biofuels were able to meaningfully reduce transportation emissions in the near term (a proposition with which we disagree), meeting Obama’s goal would require retrofitting every existing coal plant in the country with carbon capture and sequestration (CCS), building twice again that much fossil capacity with CCS, building close to 3,000 wind farms the size of Massachusetts’ Cape Wind, and building nearly 4,000 solar farms the size of California’s Ivanpah. And, having done all that, increasing the amount of nuclear power we generate by a factor of five.

Just on its face, this is a tall order. The capital investment is jaw-dropping, and it is becoming increasingly difficult to site new energy projects, regardless of whether they are solar or wind farms, transmission lines, CCS infrastructure, shale gas drilling, or nuclear facilities. More subtly, integrating these various energy sources—especially balancing output of intermittent renewables in an electric grid with no significant ability to store energy—is a major challenge; it is far from certain it can even be done at very large scale. To maximize our odds of meeting the target, we will need to prioritize development and deployment of technologies that appear capable of growing economically to full scale.

Cheap unscrubbed natural gas is a “McSolution” to the problem—tempting, but probably not the healthiest long-term choice. In order to make a major contribution to climate abatement, methane emissions from natural gas production and distribution will need to be reduced, and gas-fired power plants will need to use CCS technologies. And, although gas in the United States today is sold at prices below production costs, that cannot continue for long, especially in increasingly international markets. Similarly, “soft energy paths” like PV power (also sometimes today sold below cost) will need significant grid support and zero-carbon balancing to generate meaningful emission reductions. The economic supply curve for large, attractive sites for these projects is bound to bend sharply upwards over time as well.

In this context, nuclear power has potentially significant advantages to offer: It is demonstrably low-carbon; it provides baseload energy; unlike wind and solar, it has high power density; and, although gas is cheap today, the price of new nuclear power appears to approach that of new coal. Perhaps more importantly, the price of new nuclear plants will decline as years pass. Standardization will lead to some cost reductions; factory assembly of small, modular units could bring about further step-change reductions (as it has for automobiles and airplanes) in production costs.

None of this means that nuclear is poised for a renaissance in the United States. Utilities and their regulators won’t argue with $3 gas, Congress is unwilling to put a price on carbon, and some people remain vehemently opposed to nuclear energy. Ultimately, however, nuclear energy is probably an indispensible element of any credible plan to substantially decarbonize the country. The Nuclear Regulatory Commission’s recent approval of the new Westinghouse reactor design is good news in this regard, as it should help revitalize the American nuclear industry and keep it moving on a path of continuous improvement. In the longer term, a host of newer technologies, including passively cooled small reactors, gas-cooled reactors, and reactors with liquid fuels offer significant potential for further improvements in cost and safety. The country would do well to support continued development and deployment of these designs.

In an ideal world, we might wait to scale up nuclear power until after we’ve exhausted all efficiency and renewables options. Unfortunately, however, we don’t have decades to do this, even if we thought traditional green sources would eventually fill the zero-carbon void, which seems unrealistic. Half of the CO2 emitted today will still be warming the planet 1,000 years from now, and these legacy emissions won’t erase themselves. We need to develop all low-carbon energy options now to hedge against the risk of serious climate consequences; nuclear power, despite its genuine challenges, cannot be left off the table.

The NRC has approved the first new nuclear power plant licenses since 1978. Wow! This reminds us that good things from that era (i.e. nuclear energy) can survive and bad things (i.e. Disco Duck, Disco Inferno, Donna Summer songs) can stay in the cultural scrapheap.

Since that last license was approved, we’ve relied on nuclear energy for about 20% of our electricity generation and year after year the industry has proven that nuclear energy can be used safely and reliably in this country. In Illinois today, we have the most nuclear energy, the most plants and the most reactors in the country.

Obviously, it’s way past time for the public and private sector to build a next-generation nuclear plant. Like most new, big generation facilities, it will take a public/private partnership to build it. The government is also involved in new coal and carbon sequestration projects in Illinois. This is a good spot for federal investment as it allows new generations of energy to be tested on a commercial scale. Only time will tell if the new nuclear plants are the beginning of a trend or an energy anomaly and I would be foolish to try and predict which outcome will happen.

For those worried about the lack of a long-term storage facility for the waste, please note that we have to solve that problem anyway. Adding new facilities does not make the solution any harder because it’s not a matter of having enough room for our nuclear waste, it’s a matter of where to put it.

Nuclear energy has been safely generating baseload energy with little to no greenhouse gas emissions for decades. Our country has to continue trying new ways to generate power from new and old sources so we can meet future demand. We hope this next generation of nuclear facility will help lead the way.

And we hope that disco never comes back – talk about radioactive waste!

Whether America is poised for a nuclear renaissance largely rests in President Obama’s hands. Proper leadership of the Nuclear Regulatory Commission (NRC) and a full complement of commissioners are essential to create the regulatory predictability that is critical for the nuclear industry’s future. Only the president can designate a chairman capable of leading the agency and only the president can nominate competent commissioners to ensure that all five of the agency’s seats are filled.

Last week, the NRC issued the first new plant license in over 30 years to Southern Company to build two new reactors. This is great news for American jobs: these reactors will create 5,000 construction jobs as well as 800 permanent jobs. However, we also unfortunately witnessed NRC Chairman Greg Jaczko indulge in a symbolic display of opposition. Contrary to all four NRC Commissioners, the agency’s professional staff, the NRC’s expert advisors, and the post-Fukushima Near Term Task Force, Chairman Jaczko chose to stand alone in his dissent on this historic license. In doing so, he ignored the numerous processes available for the NRC to enact post-Fukushima-related safety improvements, and tried to stop the license by pretending that an unknown set of requirements to address undefined deficiencies is the only way to ensure compliance.

Chairman Jaczko’s actions are a bizarre u-turn from his apparent support of a Commission decision last September: “Our regulatory processes provide sufficient time and avenues to ensure that design certifications and COLs satisfy any Commission-directed changes before any new power plant commences operations.” His dissent also ignores the fact that the NRC will issue orders next month to Southern Company imposing new post-Fukushima requirements on these new reactors for spent fuel pool instrumentation and station black-out mitigation.

Chairman Jaczko has demonstrated his inability to build consensus among his colleagues and his propensity to isolate himself, propounding that he is the single-most passionate defender of public safety. This type of behavior falls far short of the caliber of leadership warranted by his position and deserved by the agency’s employees and the public. Grandstanding has no place in nuclear safety.

Last October, the four NRC Commissioners took the unprecedented step of writing to William Daley, the White House Chief of Staff at the time, to express grave concerns that Chairman Jaczko’s leadership and management practices have undermined the Commission’s ability to function. One of those colleagues, Commissioner Kristine Svinicki, is awaiting President Obama’s nomination to serve another term when her term expires this June. So far, President Obama has failed to act. Given the challenges currently facing the NRC, I can’t imagine how President Obama can justify the loss of such a knowledgeable and conscientious regulator, much less allowing the Commission to fall below its full strength of five commissioners.

Energy Secretary Steven Chu said, “As President Obama made clear in his State of the Union address, we need an all-out, all-of-the-above strategy that develops every available source of American energy - a strategy that’s cleaner, safer and full of new jobs for U.S. workers.” I absolutely agree and a nuclear renaissance fits the bill. If President Obama is serious about his support for nuclear energy, he’ll address the agency’s failed leadership and ensure that Commissioner Svinicki continues to serve.

The announcement on Thursday is a positive milestone for the nuclear energy industry and for American energy consumers who rely on stable, affordable electricity to power their lives. While the approval is indeed an excellent step in the right direction, our nation’s growing energy needs will require much more than two reactors.

Nuclear energy is a key part of an all of the above, long-term approach to meet our needs reliably and at a low-cost. And the NRC’s approval demonstrates the tremendous strides the American nuclear industry has undertaken to design and implement technologies and practices that ensure the safety of nuclear plants under catastrophic circumstances. In fact, the U.S. nuclear industry has led the world in terms of advanced safety precautions and continues to advance new technologies to make their facilities even more secure.

Even prior to Fukushima, American facilities had adopted strict regulations that required all plants to prepare for unlikely events that could threaten the safety of the reactor, and more importantly, the safety of the surrounding community. Post-Fukushima, the NRC, industry and the international community have made great progress to learn the lessons from Fukushima and augment existing safety measures.

Although the news on Thursday is positive, there are still hurdles to be overcome if we are to ensure the expansion of this vital source of power. While challenges exist, rational solutions are at hand. Consider nuclear waste. Notwithstanding the federal government’s inability to reach a solution on long-term storage, the Blue Ribbon Commission on America’s Nuclear Future recently released a series of recommendations that would allow for an interim solution to the nation’s growing nuclear waste. The Commission’s recommendations to remove waste from costly storage sites at existing facilities and move it to a few underground geological storage sites are sound. Further, utilizing existing monies from the Nuclear Waste Fund to pay for interim storage until a long-term disposal in a facility like Yucca Mountain is also a smart decision. This would relieve ratepayers who have been paying to store the waste onsite and been paying into the Nuclear Waste Fund.

And with regards to natural gas, while it will surely play a critical role in our nation’s energy future, we cannot rely on it to be the sole source of our electricity generation. Natural gas can be used to bolster our manufacturing sector, fuel the transportation sector, heat our homes and offices and generate electricity.

The Plant Vogtle licensing action sounds a clarion call to the world that the United States recognizes the importance of expanding nuclear energy as a key component of a low-carbon energy future that is central to job creation, diversity of electricity supply and energy security. Other projects will follow – most notably and soonest the two-reactor expansion planned at the V.C. Summer power station in South Carolina.

These projects are in the high-growth Southeastern electricity markets; expansion in other regions will be years away. This is due to low natural gas prices, soft power markets, slow economic growth, and no or little growth in electricity demand for the past four years. Those are powerful forces for any potential new electric generating facility not fueled by natural gas to overcome.

Still, the long-term fundamentals that will drive the need for new low-carbon energy sources point to expanding nuclear energy. The electric industry is on course to shut down 10 to 20 percent of its coal-fired electric generating capacity. There is value in fuel and technology diversity and, with the expansion of intermittent electric sources, the increasing value that nuclear plants provide to grid stability. The bottom line is that at one percent annual growth in electricity demand – below historical trends – the Energy Information Administration forecasts a need for 220 gigawatts of new electric capacity by 2035.

Keep in mind: U.S. electricity demand has grown nearly 25 percent since the last nuclear power plant began operating in Tennessee in 1996. It has risen more than 80 percent since the Nuclear Regulatory Commission last approved a construction permit for a new nuclear energy facility in 1979. A big part of the reason that the nation has been able to meet this rising demand is because electricity production from existing nuclear energy facilities – wrongly portrayed as “stagnant” – has jumped 40 percent over the past two decades. Nuclear energy supplies 20 percent of the nation’s electricity, even though 104 reactors constitute only 10 percent of the installed electric generating capacity.

Our industry is committed to maintaining safe operations and is unique among nuclear operators around the world in the extent to which we’ve planned for extreme events. After 9/11, the Nuclear Regulatory Commission and industry assumed a scenario where the plant suffered a large fire or explosion that disabled vital equipment. We purchased portable equipment like generators and pumps for that contingency. The major lesson learned from Japan is that we must be prepared to handle natural catastrophic events simultaneously at multiple reactors. We must also assume access around the site could be a challenge.

As with 9/11, the industry and independent regulators at the NRC are taking steps to enhance safety and preparedness. The industry has proposed to the NRC a “FLEX” approach for diverse and flexible coping capability. It involves using additional portable equipment and backup systems – and pre-staging some of this equipment and supplies offsite – to ensure that we can provide an uninterrupted supply of electricity and cooling water to protect critical plant systems at all times.

All of this activity, ultimately, will further benefit consumers who depend on affordable electricity from nuclear energy facilities that have proven to be a prudent investment in our nation’s economic and environmental advances. As we embark on the transition to a low-carbon electricity sector that drives the resurgence in America’s economy and growing electrification of the transportation sector, nuclear energy must continue to be a primary provider of 24/7, reliable power.

NRC approval of this license was never in doubt, but new nuclear remains more than twice as expensive as combinations of natural gas and energy efficiency. Exelon, the owner of more reactors than any other U.S. company, does not consider new nuclear plants competitive even as a low carbon electricity source.

All of the "renaissance" reactors proposed in power market states, which consume more than half of the electricity in the U.S., have been cancelled or indefinitely deferred.

One major work, even a masterpiece, isn't a renaissance, but Vogtle does have one thing in common with the original Renaissance. It depends on dubious financial instruments for the completion of overly costly construction. Faced with crushing cathedral costs, the Renaissance church pioneered the sale of indulgences as an instrument of cathedral finance, offering indulgences to the faithful as a way to avoid punishment even for sins not yet committed.

The moral hazard apparent in such transactions echoes the customer supplied capital and taxpayer backed loan guarantees being made available to build Vogtle. If the building goes awry or other alternatives prove superior, Southern Company and its backers are off the hook. Financial atonement has been taken care of.

The Nuclear Regulatory Commission’s license approval for two new reactors at Southern Company’s Georgia Vogtle plant does not signal the beginning of nuclear renaissance in the U.S. In fact, it does not even guarantee that the reactors will come online. Continued financial risks, an inability to deal with radioactive waste storage, long-term domestic energy demand destruction and cost advantages of competing renewable and natural gas fuels are making nuclear power an unaffordable relic.

By approving the license before the full suite of lessons from Japan has been learned and before new safety regulations that were recommended by a task force established post-Fukushima have been implemented, the NRC is creating the same regulatory environment that contributed to the mid-construction cancellation of more than 30 reactors during the initial wave of nuclear development 30 years ago.

Regulators responded to the 1979 Three Mile Island partial meltdown in Pennsylvania by introducing new safety requirements. Incorporating these new safety features during construction of reactors post-TMI led to delays and skyrocketing costs. As a result, projects were abandoned, companies went bankrupt and ratepayers were left paying for power plants that would never produce a kilowatt of energy.

Even before the TMI accident, hundreds of construction plans were being scrapped because of daunting financial costs and lowering energy demand. These realities are the same today and in part, explain the dormancy of the industry over the past 40 years, and predict its grim future.

Despite the successful efforts of nuclear company lobbyists to secure generous public subsidies - most notably the sweep of incentives for nuclear power in the 2005 Energy Policy Act— Southern Company and its partners remain the only nuclear consortium able to secure the financing to move forward, receiving $8 billion in federal loan guarantees to back the $14 billion project in February 2010. This incentive, combined with the 2009 Georgia law allowing the company to charge ratepayers up front for costs associated with the project, shields Southern Company from financial risk (in addition, federal stimulus-law Build American Bonds are providing an additional $2 billion in financing for the project).

Any significant nuclear development in the U.S. would require significant, additional commitments of the public’s money, a viable solution to the mounting stockpile of radioactive nuclear waste at our existing reactor sites and public confidence that a Fukishima accident could not happen here. I just don’t see these stars aligning for new nukes, particularly with the continued advancement of competing renewable technologies.

You ask whether NRC approval of the two Georgia reactors signals the long awaited nuclear renaissance. There is no renaissance on the horizon and there is no chance of one so long as natural gas is available at reasonable prices--ask John Rowe. There are other reasons for the nuclear industry to restrain its enthusiasm. What we have here is two heavily subsidized units with federal loan guarantees whose details are secret and whose generosity is unlikely to be duplicated; a captive state commission is pushing construction costs onto the ratepayers; and the plant passed an NRC hearing process that is heavily stacked against the public. This is not a model for gaining the public confidence needed for a real national nuclear take-off.

It is also extremely significant that in what must be a first, the NRC chairman voted against the license. He said that last year's Fukushima accident was such an extraordinary event that he thought it essential to insert a license condition that the necessary safety upgrades coming from the lessons of the accident would be incorporated into the Georgia units before operation. The other four commissioners refused, opting to follow the existing NRC procedures and approve operation without any such condition. That the chairman took such a dramatic step, one that could be very costly to him politically, means that he does not have confidence that the agency will require the necessary safety measures without the license condition he supports. One cannot lightly dismiss the chairman's opinion on the need for a stronger nuclear safety commitment because in this his views are a lot closer to those of most people than are the views of the other four commissioners. That vote is not a plus for public confidence, either.

You ask what lessons we should draw from the Fukushima experience. Let me mention what to me is the key lesson coming out of the accident, one that has not gotten nearly enough attention either in the public or at the NRC: the extensive radioactive land contamination of the area around the Fukushima site. The nuclear community likes to focus on the comparative advantage of nuclear power over other energy sources in terms of fatalities. But there are other important costs. After the accident the Japanese evacuated an area of about 1000 square kilometers in which they estimated the public radiation dose would exceed 20 mSv per year (2 rems per year). nearly ten times background. About a 100,000 persons were affected. (Perhaps three times that many were affected around the Chernobyl site but we didn't pay attention.) Because the chief contaminant is cesium 137 with a 30 year half-life, many of those Japanese evacuees can never come back to their homes. Their lives have been upended. And it could have been much worse had the winds blown differently. This is the principal safety concern about nuclear power plants--that even with effective evacuation, the evacuees may have nowhere to go back to.

If loans guarantees and production tax credits are the foundation for a renaissance, we can’t afford it. We have seen the future of industrial policy and it doesn’t work. Tax credits simply make the deficit larger when what is needed are actions to reduce the deficit and debt. Several years ago an assessment of the nuclear loan guarantee program concluded that perhaps as much as 50% would end up in default. Loan guarantees are also the route to moral hazard. We have seen during our recent financial crisis. The consequences of moral hazard created by misaligned incentives and shifting of risk are the last thing that we need with nuclear power.

The two Southern Company NRC authorized units may be rock solid but there is a reason why private capital is sitting on the sidelines. The market simply does not see a credible path forward for nuclear power. Not only is Yucca Mountain nowhere near being approved but the cost of generated power is 20%-30% more than conventionally generated power. Until the cost of capital gets lower, the storage issue is resolved, the regulatory process rationalized and streamlined, and the public is more accepting, nuclear power’s renaissance will remain a wish but not a reality.

Public and environmental opposition to nuclear power in “my backyard”, slow government permitting, and the risks of accidents all combine to drive up the cost of capital and therefore the cost of delivered power. The government regulatory process and the storage debacle can be dealt with in a constructive way even if it is unlikely that they will. But, the recent accident at Fukushima was a stark reminder that systems designed and operated by humans are not perfect and the consequences of a “black swan” event can be significant. How the citizens of Georgia and special interests group react to the new Southern units may tell us a lot about the public’s willingness to support an expansion of nuclear power in this country. Without strong public support or at least muted opposition, politics will be too much of an obstacle.

The risk of a nuclear accident is small, although not insignificant. The nuclear industry, which has an outstanding record, will be challenged to make it even smaller through better design and construction, even more rigorous training and inspection, and greater redundancy in systems. All of that takes time and with the best of efforts risk cannot be taken to zero. Since the government is unwilling to go ahead with making Yucca Mountain operational, even though it is more than safe enough, the nuclear industry is going to have to find a means of handling wastes that is politically acceptable and operationally cost-effective.

All of these efforts and others that will arise have the effect of raising the cost of nuclear power when what is needed are actions and breakthroughs that will lower it. Under these circumstances, it is hard to be optimistic.

A few years ago, it appeared that nuclear had a brighter future because of the growing demand for electric power and growing opposition to coal. Now we have a real renaissance in natural gas which will enable us to meet a growing demand while reducing air pollutants and CO2. Given our abundance of natural gas, its price should stay low unless the heavy hand of federal government over regulation constrains its production and bright future. With the abundance and affordability of natural gas, a logical question is why promote nuclear? And, if nuclear cannot compete with natural gas fired power plants, why offer loan guarantees and production tax credits. Competition among fuels is a good thing.

The federal government has a poor track record in the energy field. It has squandered hundreds of millions of dollars, imposed an embargo on potentially significant increases in domestic oil production, driven investment and jobs overseas, and imposed unnecessary costs on consumers with renewable fuel mandates. In other words, to quote John Dingell on another topic, it has created a glorious mess.

The United States is rich in energy resources and as our economy continues the shift to service industries and to more widespread use of information and communication technologies, we will consume enormous amounts of electricity in the future. That need can be more easily met if the government abandons its industrial policy on energy and lets market forces and private capital work their will.