The Future of New NuclearThe Future of New NuclearThe Future of New NuclearNational Conference of State LegislaturesThe Future of New NuclearNational Conference of State Legislatures

Louisville KYLouisville KYLouisville, KYJuly 25, 2010Bill Levis, PSEG Power President and COO

Louisville, KYJuly 25, 2010Bill Levis, PSEG Power President and COO

2006 International Electricity Statistics2006 International Electricity Statistics

Total Thousand MW: 4,012.4Fuel Diversity – 2006 Electricity Produced – 2006

Total Million GWh: 18,014.67

17%

Renewable / Other

Hydroelectric 2%

19%Renewable /

Other

Hydroelectric

3%

9%

17%Nuclear

15%

19%

Nuclear

3%

66%69%

Conventional Thermal (fossil)

Conventional Thermal (fossil)

Total United States vs. World Population (millions)Total United States vs. World Population (millions)

7000

Although less than 5% of the world’s population, the U.S. consumes 21% of the world’s total energy annually (2007)

6000

7000

4000

5000

2000

3000

0

1000

1700 1800 1900 2000

The Earth at NightThe Earth at Night

International demand for electricity will continue – indefinitely!International demand for electricity will continue – indefinitely!

2008 United States Energy Statistics2008 United States Energy Statistics

Total MW: 994,888Fuel Diversity – 2008 Energy Produced – 2008

Total GWh: 4,115,888

10%

Nuclear

Hydro8% 20%Gas

NuclearRenewable

3%Renewable

3%

40%

GasOil

8%6%

%

21%20%

Hydro6%

31%

Coal

49%

2%CoalOther

Gross Domestic Product vs. U.S. Electricity GenerationGross Domestic Product vs. U.S. Electricity Generation

12000

14000

16000t 3500

4000

4500

)

8000

10000

12000

mes

tic P

rodu

ct

2000

2500

3000

(bill

ion

kwh'

s)

4000

6000

Gro

ss D

om

1000

1500

2000

Gen

erat

ion

0

2000

1970 1974 1978 1982 1986 1990 1994 1998 2002 20060

500

Year

GDP Electricity Generation

United States demand for electricity will continue indefinitely!United States demand for electricity will continue – indefinitely!

Relative Energy CostsRelative Energy Costs

C ti l l i id littl i ti t h Comparatively low energy prices provide little incentive to change behavior

$1.20

$1.40

$1.60

$1.80

Premium Unleaded Gasoline

$1,000.00

$1,200.00

$1,400.00

Heating Oil

e

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00

a k d e ly d n d m es

$/Li

tre

$/10

00 L

itre

Austr

ia

Denm

ark

Finla

nd

Fran

ce

Italy

New

Zeala

nd

Spain

Switz

erlan

dUn

ited

King

dom

Unite

d St

ates

Aust

ria

Denm

ark

Finl

and

Fran

ce

Italy

New

Zea

land

Spai

nSw

itzer

land

Unite

d Ki

ngdo

mUn

ited

Stat

es

$1,200.00

$1,400.00

Natural Gas

V $0.40

$0.45

Residential Electricity

$0.00

$200.00

$400.00

$600.00

$800.00

$1,000.00

$/10

7kc

all G

CV

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$/kW

H

$

Aust

ria

Denm

ark

Finl

and

Fran

ce

Italy

New

Zea

land

Spai

nSw

itzer

land

Unite

d Ki

ngdo

mUn

ited

Stat

es

$

Aust

ria

Denm

ark

Finl

and

Fran

ce

Italy

New

Zea

land

Spai

nSw

itzer

land

Unite

d Ki

ngdo

mUn

ited

Stat

es

Source: International Energy Agency 2009 Key World Energy Statistics

Aging InfrastructureAging Infrastructure

Investor Owned Utilities

100

75

100

50

75

ent *

Within planned service life

Near end of service life

25

Perc

e

At, past, well past end ofservice life

0

Distribution Transmission Generation* 2009 / 2010 Black & Veatch utility industry survey

New Nuclear DevelopmentNew Nuclear Development

Nuclear Industry Performance Improvement Nuclear Industry Performance Improvement

90

9558.2% in 1981

75

80

85 70.2% in 1991

89.4% in 2001

91 1% in 2008ctor

(%)

ctor

(%)

65

70

75 91.1% in 2008

apac

ity F

acap

acity

Fac

50

55

60Ca

Ca

50'81 '86 '91 '96 '01 '06

Invited CompetitionInvited Competition

Competition

Public PerceptionPublic Perception

D t l f h t f h t 80% 74%

Do you strongly favor, somewhat favor, somewhat oppose or strongly oppose the use of nuclear energy?

60%

40%

20%23%

0%

Favor Oppose

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

MAR

10

Favor Oppose

Source: Bisconti Research, Inc. with GfK Roper. Telephone interviews with 1,000 nationally representative U.S. adults March 18-21, 2010, margin of error isplus or minus three percentage points. For full questions and answers, see www.nei.org.

Sources of Emission-Free ElectricitySources of Emission-Free Electricity

Wi dWind4.7%

N lNuclear72.3%

Solar

Hydro21.7%

Geothermal1.3%

Solar0.1%

2009 Worldwide Nuclear Generation (BkWh) / Construction2009 Worldwide Nuclear Generation (BkWh) / ConstructionTotal Nuclear Generation

Russia 153 United States

Country # UnitsArgentina 1Brazil 1

Total Nuclear Generation 2,559.7 BkWh

153

Korea Rep. 141.1

796.8

10432

Bulgaria 2China 24Finland 1France 1

Japan 260 1

20

54

France 1India 4Iran 1Japan 2260.1

Germany

54

17153

Korea, Rep of 6Pakistan 1Russia 11Sl k R 2Germany

127.6

France

Other691.1

58 Slovak Rep 2Taiwan, China 2Ukraine 2United States 1

390United States 1Total 62

American Power Act of 2010 ProjectionsAmerican Power Act of 2010 Projections

80%

100% Requires additional 72.3 GW of power

60%

80%52 new nuclear units

40%

20%

0%2008 2035

Coal Gas Hydro/renewable Nuclear Oil

Generic Nuclear Development TimelineGeneric Nuclear Development Timeline

Presidential Election

Gubernatorial Election

Presidential Election

Gubernatorial Election

Presidential Election

Gubernatorial Election

Presidential Election

Five technologies under consideration

Election Election Election Election

2 Design Certifications issued (1 with an Amendment under review) and 3 Design Certification Applications under review

2,500 – 4,000 construction jobs; 400 – 700 permanent jobs

Nuclear Development Progress - Industry UpdateNuclear Development Progress - Industry Update

V tl (S th C AP1000) COLA id 2011Vogtle (Southern Co. AP1000) – COLA mid 2011Accepted $3.4B loan guarantee from DOE (45.7% equity owner)Excavation complete with ongoing Limited Work Authorization Excavation complete with ongoing Limited Work Authorization (LWA) with 1000 workers

Summer (SCANA AP1000) – COLA mid 2011Expected to be offered DOE loan guaranteeExcavation complete/circ water piping in place

North Anna (Dominion) announced switch to Mitsubishi Other Lead plants

C l t Cliff (C t ll ti AREVA EPR) & S th T P j t Calvert Cliffs (Constellation AREVA EPR) & South Texas Project (NRG Toshiba ABWR) Both COLAs expected mid 2012pBoth in running for DOE loan guarantees

Nuclear Resurgence – Job Creation in Nuclear Supply ChainNuclear Resurgence – Job Creation in Nuclear Supply Chain

Company Location Project Anticipated JobsCompany Location Project Anticipated Jobs

Toshiba Charlotte, NC Project management and Engineering Center 200

Westinghouse Charlotte, NC Expanding – Engineering, BWR I&C and Projects 100

Areva, Northrop Grumman Newport News, VA Heavy Component Manufacturing > 500

Global Modular Solutions Lake Charles, LA Nuclear Fabrication for Westinghouse AP1000 Tech. 1,400

URS Corporation Fort Mills, SC Nuclear Energy Center - Eng. & Construction > 400

GE Hitachi Nuclear Energy Wilmington, NC Expanding Campus – Add Manufacturing, training, etc. 900

Holtec Turtle Creek, PA Dry Fuel Storage Canisters and high-Tech Racks 575

Alstrom Chattanooga, TN Manufacturing Nuclear and Fossil components 350

Babcock & Wilcox Lynchburg, VA Engineering – Support New and Existing Plants 100

Babcock & Wilcox Mt. Vernon, IN Manufacturing – Support New and Existing Plants 300& , g pp g

Curtiss Wright Cheswick, PA Manufacturing Nuclear Reactor Coolant Pumps 80

Westinghouse Cranberry Woods, PA Nuclear Business Unit – New Facility 1,000

LES Eunice, NM Uranium Enrichment Facility 300

Construction 1,100

USEC Piketon, OH American Centrifuge Plant 420

Construction 1,000

Areva Bonneville County ID Uranium Enrichment Facility 325Areva Bonneville County, ID Uranium Enrichment Facility 325

Construction 1,100

Salem and Hope Creek Nuclear Generating StationsSalem and Hope Creek Nuclear Generating Stations

PSEG Nuclear – Salem and Hope CreekPSEG Nuclear – Salem and Hope Creek

S d l i i Second largest site in countryApproximately 3,575 MWeEnough electricity for ~3 million homes

Each unit licensed for 40 years (license renewal underway)Salem Unit 1 (PWR, 1180 MW) – August 2016Salem Unit 2 (PWR, 1175 MW) – April 2020Hope Creek (BWR, 1220 MW) – April 2026

Each unit on an 18 month refueling cycleDry cask storage facility on propertyEnough space for 200 casks – all 3 units, 60 yearsg p , y

Salem Circ Water ConstructionSalem Circ Water Construction

New Nuclear DevelopmentNew Nuclear Development

PSEG P b itt d E l Sit P it li ti i MPSEG Power submitted Early Site Permit application in MayPSEG Board authorized $100 M for ESP / COLA developmentdevelopmentESP developed including four plant technologies

The ESP route is logical next step for PSEGThe ESP route is logical next step for PSEGStarts the application process while deciding on reactor technologyEngages local public, political, regulatory and environmental stakeholders early in the process

Significant local and state stakeholder supportEnergy and Environmental Resource Center developed after benchmarking trips after benchmarking trips

New Nuclear Development Challenges New Nuclear Development Challenges

Th f fi i i iThe cost of financing is uncertainLoan guarantees will ensure greater investor confidenceActual construction experience in U.S. will increase price certainty

Regulatory rules are uncertainLicensing process is untestedPrice of carbon is unknown

The size of the investment relative to our market capitalization makes risk management a high priority

Partnerships and/or investment opportunities may be id dconsidered

Perceptions of Public OpinionPerceptions of Public Opinion

D th A i P bli ll t Does the American Public generally support or oppose building more nuclear power plants?

14%

42%

44%

Supports Don't Know Opposes

Looking Beyond 2020 Looking Beyond 2020

If fi d d l t i it h t it?If we find we need more electricity, where can we get it?

Nuclear

Coal

Nuclear

PermittingConstruction

?

Peaking

Combined Cycle

0 5 10 15

Years

How are we, as responsible stakeholders, addressing the energy challenges facing our states?