Progress Energy CEO: Nuclear energy has a challenging, promising future

Washington, D.C., February 17, 2011 — The future of nuclear energy in the U.S. is promising, complicated and challenging, said Bill Johnson, chairman, president and CEO of Progress Energy.

But the central question related to new nuclear plants is not “if” they’re needed, but “when” and “how” they’ll be built.

“Despite the sea change of events in the last five years, the underlying need for a secure, clean and affordable energy supply is stronger than ever,” Johnson said today at the seventh annual Platts Nuclear Energy Conference in Bethesda, Md. “And today, there’s an even more compelling case that greater use of nuclear power is a vital part of a balanced energy strategy.”

Johnson cited President Obama’s Jan. 20 State of the Union address, in which the president discussed nuclear power as a key component of the clean options needed to meet an 80 percent clean energy goal in 2035.

“Nuclear energy is certainly not the only tool we have or need in building a clean energy future,” Johnson said. “There’s a toolbox of options, and we’ll need a diverse mix tailored for each company and region. But I do believe that advanced nuclear technology is one of the essential tools our nation must employ in a bigger way. It’s a key part of a realistic, balanced solution. The need is compelling, and the global trend is undeniable.”

Global energy use is expected to double by 2030, and U.S. electricity consumption is expected to grow by 30 percent by 2035. Meanwhile, about one-third of the existing U.S. nuclear fleet will be at least 60 years old by 2035, so the decade of the 2030s could see a wave of nuclear plant retirements — at a time when many fossil-fueled plants will also already be retired. That points to a significant need to invest in new plants capable of producing emission-free electricity 24 hours a day.

Johnson pointed to four factors needed to drive the nation’s expansion of nuclear energy:

* Excellence in maintaining and operating the nation’s current fleet of reactors;

* Financial strength of the companies that plan to build more plants, in light of the elevated scrutiny on companies’ creditworthiness;

* Regional partnerships among joint owners to reduce financial impacts on consumers and financial risks for individual companies; and

* Broad political and regulatory support, including timely and efficient recovery of financing costs during construction.

“There is positive momentum on all these fronts,” Johnson said. “But more work needs to be done, especially in putting the right cost-recovery mechanisms in place. ” I would like to see the United States lead the way in commercial nuclear expansion – thoughtfully, strategically and on a scale and timetable sufficient to the need.”

Johnson currently serves on the boards and executive committees of the Edison Electric Institute and the Nuclear Energy Institute. He is also a member of the board of directors of the Institute of Nuclear Power Operations. Johnson believes advanced nuclear power must have an expanded role as the U.S. looks to meet energy needs reliably, affordably and in an environmentally sound manner in the decades ahead.

Progress Energy owns and operates five nuclear reactors at four sites in the Carolinas and Florida. The company has pending applications with the Nuclear Regulatory Commission for licenses to permit up to two new reactors each at sites in Florida and North Carolina.

Progress Energy, headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 22,000 MW of generation capacity and about $10 billion in annual revenues. Progress Energy includes two major electric utilities that serve about 3.1 million customers in the Carolinas and Florida.

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