EnergyBiz - September/October 2007 - (Page 39) tion extended because that’s going to be critical to our ability to raise capital and to keep strong equity values during a period of huge build-out in our infrastructures. r atcliffE I don’t think it’s a question of availability of capital, because the market is flush with capital. The question is the return of and on the capital and the recovery of the capital. It’s a less risky proposition if you still operate a vertically integrated business. r ainWatEr Can we get it all done? There’s just a limited amount of labor that’s out there. HarvEy We’ve got two coal plants we want to build, about 600 megawatts of wind and we’re retrofitting everything on the planet. For us, it’s about a $4 billion capital spend over the next seven years and that’s a fortune for a company our size. We would all like to know what the game is so that we actually knew what we had to do instead of guess what we have to do. When we’re looking at spending the kind of capital that Jim described, to do it against the backdrop of ambiguity that we have in this country is just a shame. Part of what we have to do is make plans so that we’re flexible. KEvin BurKE , consoliDatED EDison the environmental requirements, the base load requirements and other changes in the industry. stErBa Many of the issues we face are global, like climate change. The climate change piece puts a bigger challenge before us than we may have faced with the Arab oil embargo. A NEW NUCLE AR ER A DAWNS EnErgyBiz Federal regulators this fall anticipate receiving 30 new license applications for nuclear power plants. Do you expect opposition to start surfacing? r ainWatEr Well, if history is any guide the opposition will certainly be there. But one thing that has changed over the last 20 years is that the public acceptance of nuclear power is higher than it has ever been in my career. rogErs We need to tie nuclear to the climate law. If we let a new climate law go into effect without getting the right legislative action on nuclear, we’ll never get the right legislative action at all. stErBa Do we have the workforce that’s trained to be able to construct and operate new facilities? Some universities are starting to put together more aggressive programs on the nuclear side. Our industry has to really partner with them. We’re going to have to operate these things, and we don’t have the workforce today. rogErs We’re in better shape though, Jeff, than we were when we started in the 1960s and 1970s in terms of having the infrastructure and the ability. Nuclear represents 20 percent of all the electricity produced in the United States today. By 2030, if it’s going to maintain the same share, we have to build 35 plants. If we’re going to reduce our emissions of CO2 to the 1990 level, we’re going to need 55 to 58 plants built between now and 2030. That’s an enormous task. MoorE Waste disposal has to get resolved if we’re going to add that many nuclear plants. r atciffE If we don’t solve nuclear waste disposal as part of planning, shame on us as a nation because if we don’t close the cycle in some fashion, we’ll never close it. EnErgyBiz That’s been a problem for some time. How can this industry at long last solve it? rogErs We have to step back and revisit the whole idea of reprocessing. It’s expensive and it’s going to take a couple of decades to evolve. It’s interesting that the Russians are going to Third World countries, telling them they will take the spent fuel back. The French reprocess it. We really need to start thinking through a reprocessing strategy. Kevin BuRKe , consolidated edison RichaRd Kelly, Xcel eneRgy Jeff steRBa , PnM ResouRces NEE D FOR ENERGY POLICY Who’s to blame for that ambiguity? I don’t think we’ve done particularly well in this country developing well-structured, national energy and environmental policy. We tend to do it piecemeal, and those of us in the industry end up with our eyes crossed wondering exactly what it is that we ought to do as we spend money at a billion dollars a clip. rogErs Jim Schlesinger, the former U.S. energy secretary, said that energy and environmental policy in this country swings between complacency and panic. The real price of electricity is going up for the first time in a decade and a half. The last time that regulatory commissions dealt with building base-load generation was 20 or 30 years ago. The educational process is immense. Thinking is in silos. The people who are experts on gas are not talking to the people in coal or nuclear. You’re really not seeing enough sharing of information or a comprehensive thought process. KElly I’m in favor of a national policy, but each state has a different asset, each state has something different to bring to the party. If we try to come up with something like a renewable portfolio standard, it doesn’t work for everybody. But we need some overarching national policy. BurKE There will continue to be ambiguity. Part of what we have to do is make plans so that we’re flexible. r ainWatEr Things do go in cycles, and our challenges are not unprecedented. But it is all coming together at the same time — EnErgyBiz HarvEy 40 E n E rgyB i z September/October 2007
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