Prepared Remarks for Energy Secretary Bodman
Thank you all for being here and thanks, Mike, for that very nice introduction and for the tour of your transmission control center. I also want to thank Southern Company and Georgia Power for arranging this event and I appreciate Lauren Walker from Governor Perdue's office and Derick Corbett from Congressman Linder's office joining us here today.
During my tour I got a firsthand look at the fine job your operators are doing to keep the power flowing to some 2 million customers around the state of Georgia . . . despite the heat wave that has gripped your region and so much of the rest of the country-Washington included. You and the rest of the nation's electric power companies are to be commended for serving your customers so well under such difficult circumstances.
Difficult conditions are also confronting Americans at the gas pump these days. The high prices we are dealing with are a product of a growing global economy and rising demand for oil.
Yet I am pleased to say our economy continued its strong performance last month by creating 113,000 new jobs, and a total of 1.7 million jobs over the last 12 months. Our gross domestic product expanded at the healthy rate of 4% during the first half of the year and we expect it to continue its strong performance during the rest of the year. Last year's 3.5% growth in our GDP was the fastest rate posted by any industrialized nation. These strong numbers show that this Administration's pro-growth policies are working.
I am traveling today to highlight the continued growth in our economy-which should encourage all of us-and to share with you as well some of the Administration's accomplishments under the Energy Policy Act of 2005.
The Energy Policy Act, or EPAct as we call it inside the Department was signed into law about a year ago and represents the most comprehensive overhaul of our energy policy in over a decade. It was an important step forward for the United States. In just one year, EPAct has led us-and will continue to lead us-toward enhanced energy security and greater energy independence.
I think you all know that building our nation's energy security has been a priority for this President since his first day in office. America needed a long-term energy strategy and, thanks to EPAct, it got one.
It took five years, but we did it-with bipartisan support. One of the central goals of EPAct was to help us produce more clean energy here at home. And one of the ways we plan to do that is by encouraging the expansion of clean, emissions-free nuclear power in the United States.
It's something all of you should appreciate because of the commitment that Georgia Power and the Southern Company already have to nuclear power and the key role it plays in your operations. Nuclear power is the only technology we currently have that can deliver reliable base-load electricity without producing any pollution or greenhouse gas emissions. And it can do it affordably. Our growing dependence on foreign energy and increasing concerns about clean air make nuclear power's advantages over other methods of electricity production more pronounced than ever. That is why President Bush believes nuclear power must be a key part of our future energy mix.
The 103 nuclear plants that are now operating in the U.S. are already producing 20% of the nation's electricity at the very reasonable cost of 1.8 cents per kilowatt hour. But EPAct provides strong incentives to further expand the use of nuclear power in this country. Perhaps most importantly, it calls for providing federal insurance for the first companies that commit to ending our nearly 30-year hiatus in building new nuclear power plants in the U.S.
This program will provide up to $2 billion in coverage to protect the builders of the first six new nuclear plants against the potential cost of regulatory or litigation-related delays. We are already seeing signs of a renaissance for nuclear power in this country. Public acceptance of nuclear energy is higher than it has been at any time in the past 25 years. Industry studies have found that three quarters of Americans are willing to see a nuclear plant built near them. And, according to the Nuclear Energy Institute, 12 energy companies are planning to file license applications over the next three years to build 18 new nuclear reactors.
The announcements this week by Unistar Nuclear were also good news. It is moving ahead with the purchase of long-lead time materials and re-establishing component manufacturing capability that will be needed to build the first of a series of advanced nuclear reactors in the United States.
But I also know that many prospective builders vividly recall the major financial, regulatory and legal problems the industry faced when the last nuclear power facilities were built in the 1970s and 80s. Many of these plants took years longer to complete than anticipated and cost billions more than originally projected. As a result, nuclear power projects became too expensive to finance and construction of new plants in the United States ground to a halt.
The risk insurance program we will be launching today has been carefully designed to help resolve this problem. Under this program, the sponsors of an advanced nuclear plant will first have to apply for a license to build from the Nuclear Regulatory Commission. Then they may apply for this risk insurance.
Once we begin receiving applications-and I expect that one of them will be from Southern Company and Georgia Power for two new reactors at your Plant Vogtle complex-EPAct authorizes the Secretary of Energy to enter into up to six contracts with sponsors of advanced nuclear facilities to insure against certain delays in attainment of full-power operation.
It provides for indemnification of 100 percent of covered costs-up to $500 million-for each of the first two reactors and 50 percent of covered costs-up to $250 million-for each of the subsequent four reactors after an initial 180-day delay.
This program is crucial to reinvigorating the American nuclear power industry. Let me put it plainly; we want to do nothing less than to usher in a new era of nuclear power in the U.S. It is time for the nation that gave birth to this technology to reclaim leadership of this critical sector. With this program, we will be able to generate more clean power and America will be able to set an example for other countries around the world that want to reduce their dependence on fossil fuels. This is an ambitious goal, but with the federal government backing private industry, I know we can make it happen. In doing so, we will create new jobs, improve the environment and increase our nation's energy security.
Expanding our nuclear power sector, though, is only part of what EPAct seeks to accomplish. The Act also set the goal of modernizing our energy infrastructure, and particularly our electric power transmission system. This must be done to meet the demands of our growing economy and population. Next week, we will release our study on congestion points in the grid, which may lead to the designation of National Interest Electric Transmission Corridors and the construction of new transmission lines.
Completing this congestion study was one of the assignments the Department of Energy was given by EPAct and we will be releasing details of the study's findings next week. The study will highlight corridors throughout the nation where bottlenecks now exist or are likely to develop soon and where we must add more transmission capacity.
EPAct also cleared the way for mandatory reliability standards to be set for the nation's power grid and I expect those to be in place next year. Greater transmission capacity and stronger reliability standards will help protect us from the disruption and expense of widespread power outages and blackouts that have occurred more frequently than any of us would like in recent years.
I expect these new reliability standards will stimulate further private sector investment in upgrades to our transmission and distribution systems. We have already seen a surge over the past year in private sector proposals to build billions of dollars worth of new inter-regional transmission lines that, I believe, were spurred by the changes set in motion by the Act.
In short, momentum, is building to create a new electric power infrastructure for our nation that will serve as the backbone of our nation's economy for decades to come. But expanding the use of nuclear power and upgrading our electrical grid were only two of the goals that EPAct sought to advance. Its overall aim of advancing the nation's energy security was much broader.
It took five years and a lot of work, on a bipartisan basis, to get EPAct through. But we now have a legal and regulatory framework for meeting our energy challenges. EPAct provides us with a strategy constructed around three main ideas - the three pillars, if you will, of energy security.
First, as I mentioned, we must modernize our energy infrastructure. In addition, we must increase our energy efficiency. We must also expand and diversify our domestic energy production with additional oil and natural gas resources, as well as renewable energy sources like solar and wind, hydrogen, and bio fuels like bio-diesel and cellulosic ethanol.
EPAct is a comprehensive approach to helping our nation meet its energy challenges.
I am energized by all that has happened in the year since the passage of EPAct.and I plan to continue to challenge my colleagues at the Department and on the Hill to work just as hard in EPAct's second year to create even greater returns for the American people on the road to energy security.
Thank you for having me.
Location: Georgia Power Corporate Headquarters