Review of John Rowe’s Keynote Speech at ANS Utility Working Conference

I went to the ANS UWC for the first time this past week. I had many excellent conversations and listened to many interesting speakers, so I’m taking a few days off from my strategic analysis series to provide a review of some of the goings on.

There was an outstanding vendor technology Exhibit. The first night, we had the opportunity to walk around and see old friends as well as learn about new technologies being applied in the industry. As usual, I was amazed and impressed by all of the people and technologies being shown. Of course, there are always innumerable cool toys and souveniors to pick-up, although I restrained myself that first night. I think I counted 111 different vendors.

The first day started out with a keynote speech from John Rowe, CEO of Exelon. Here’s a link to his prepared remarks. It wasn’t a pep talk, it was a reality discussion. It felt to me like the talk you get in the locker room when you are losing the game and you may not be able to pull it off. The reality of where you are today and what that really means. John didn’t always follow his script exactly and I fired off a number of tweets during his speech. Looking back at those, several struck me.

Not what we in this industry want to hear. We keep complaining that we aren’t being judged on a level playing field with our competition or by our critics. It’s time to stop complaining and understand that reality. What do we do to either level the playing field ourselves, or to win the game on the unlevel field we’ve been dealt?

I don’t have the answers, but maybe we should start thinking about this long and hard. Why is nuclear judged by a harsher standard? And how to we go about creating more consensus? I do not believe this will be done by staying in Washington and playing politics and policy games in the back rooms of Capitol Hill. While this is important, we as an industry also need to take our message out to the public, to engage directly with those people who are afraid or who do not know what to think. Their advocacy, or lack thereof, drives the local decisions to support, or oppose, nuclear power at the community level. By leaving these discussions to be started by groups with political and business agendas that oppose nuclear power, we allow ourselves to become defensive and to sound apologetic for our beliefs. We need to start the conversations and find common ground and ways to build consensus within those communities.

Another pair of hard truths.

John gave the industry a check on the first bullet – right reactor technology, and a big red x on the remaining 3. In his opinion, we lack a workable solution to the used fuel questions, slow growth limits the need for new generations and current natural gas prices and availability makes nuclear a poor economic choice.

Many of us would argue about whether or not a workable solution to used fuel exists, but again, in the world of national policy, it does not today. The administration has stopped work on the one repository because of prolonged and strenuous objections from powerful interests in that region. More importantly, there are many who felt that decision was a bad one because it threw away potentially useful material. This issue needs to be resolved and cost-effective, politically workable solutions developed and implemented. It is not a technical problem, it is both an economic and a political one.

On the last two points: Utilities are in the business of selling electrons, not fighting policy makers or making political statements. As long as natural gas costs are low, utilities aren’t real interested in a business busting 10-20 year bet on nuclear power. At least not in a merchant market like Exelon is in. Regulated markets like the SouthEast with high growth and poorer access to natural gas have a different economic equation. We see this same answer with other merchant generators: NRG and Constellation. The industry has a couple of choices, find a way to provide lower cost, shorter cycle solutions (perhaps SMRs). OR fight for a long term national policy that encourages and supports companies to make the big, long term investment in new nuclear plants. It is this long term policy that is allowing India, China, and other countries to continue to move nuclear energy forward.

At last, a positive note from John. He’s right. And this part of our industry is undersold and underappreciated. We allow our critics to make too many unsubstantiated claims and we fail to point out the reality. My mother taught me not to brag about myself, but the industry needs to get over this reticence and speak out.

Wow. Too many times we demand a public funding and argue for “public-private partnerships” and then complain when the private industry can’t sit in the driver seat. We need to find ways to support research and move forward without reliance on the government. We can demand that they allow us ways to do such work and the provide the avenues to be able to move new ideas into the commercial environment more quickly and efficiently. But until we are willing to pay our own way, we have to let the public half of the partnership steer the boat.

John Rowe is a hard-eyed realist who has successfully led the largest nuclear utility in the US for many years. We have to thank him for his honest assessment and now buckle down and get to work and figure out how to change our future.