Background - Decline & Rebirth of Nuclear Power

Case Study - Capacity Factors, Power Uprates, License Renewal, Operations/Performance Improvements to Maximize Value

Ongoing/Implemented Industry Efforts

Economy – Interest Rates, Recession, Public Fear/Distrust

TMI 2, Chernobyl, Regulatory Requirements

Relative Inexperience

Poor Capacity/Availability

High O&M Costs

Global Warming, Impetus to Conserve/Use Fossil Fuels Judiciously, High Fossil Fuel Costs

Deregulation, Consolidation of Ownership

Streamlining of Regulations

Improved Capacity, Availability, Performance, Operations & Maintenance

Cost-Effective Capacity Additions, Operating License Renewals

Low/Stable O&M Costs, Public Acceptance

2005

5

1

4

12

7

9

8

15 6

10

22

29

38

46 47

0

2

4

6

8

10

12

14

2000 2001 2002 2003 2004 2005 2006 2007 (As ofJan.)Year

No

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ng

Lic

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s R

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ed

0

5

10

15

20

25

30

35

40

45

50

Cu

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Nu

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Op

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No. of Operating Licenses Renewed Cumulative

Originally Licensed to Operate at 2436 MWt in 1974

Until 1994, 67% Average Capacity Factor

Production Cost in 1994 was 40.0 Mills/Kwhr

RFO was 96 Days in 1994

SPU of 5% Implemented in 1997

Increased Focus Since 1994 on Operations, Maintenance, Safety, Performance & Reliability Resulted in Average Capacity Factor of 97% for 2000-2002

No Unplanned Shutdown in 2001-2002

Production Cost for Same Period was 12.8 Mills/Kwhr Compared to 40.0 Mills/Kwhr in 1994

Ranked in Top Quartile for Five Consecutive Years in Capacity Factor & Production Costs

EPU of 15% Implemented in Two Phases: First Phase – 2003 & Second Phase - 2005

In First Phase – Installation of Highly-Enriched Fuel, Replacement of Power Range Instrumentation, HP Heaters, Upgrade of Turbine Control Valves, Rewind of Main Generator Stator, Upgrade of Condensate Polishing System Filters, Etc.

Payback from First Phase was Immediate

RFO in 2003 Lasted Only 29 Days

In Second Phase – Replacement of Main Transformer, LP Heaters, Main Generator Isophase Cooling, Standby Condensate Pump, Upgrade of RFPs, Reheaters, Chemistry Systems, Etc.

Environmental Assessment of EPU Conducted by NRC Deemed Impact Insignificant

In 2004, Application Submitted to NRC for Renewal of OL by 20 Years

In 2006, NRC Approved Application and Renewed OL

The Asset Showed Continued Improvement with 95% Capacity Factor in 2006 and 97% in Feb. 2007

Shorter/Optimized RFO & Planned Outages – Increased Plant Availability, Lower Operating Costs due to Reduced Maintenance Costs

Increased Focus on Plant Performance

Re-Engineering, Self-Assessment, Cost-Effective Capital Investments

Incorporating Lessons Learned – Decreased Unplanned Outages

Improved Outage Management Strategy

Increased Effectiveness of Failure Prevention Programs including Maintenance – Help to Identify Advance Equipment Degradation from Aging

Efficient Use/Sharing of Resources

Greater Use of Analytical Tools to Balance Costs and Benefits of Proposed Activities

Power Uprates, OL Renewals