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According to McGraw-Hill's Utility Data Institute (UDI), production costs at U.S. nuclear power plants are the lowest of any major reliable electricity source, including coal. This marks the first time in more than a decade that nuclear power has even come close to fulfilling the dreams of its proponents—electricity too cheap to meter.

In 1999, production costs, including fuel and operations and maintenance, at nuclear power plants averaged 1.83 cents per kWh. By comparison, coal came in at 2.07 cents per kWh, oil-fired plants at 3.18 cents per kWh, and natural gas plants at 3.52 cents per kWh.

In 1998, average production costs for coal-fired plants were 2.07 cents per kWh, with nuclear energy plants at 2.13 cents per kWh, oil-fired units at 3.24 cents per kWh and natural gas plants at 3.3 cents per kWh, according to Washington-based UDI.

UDI takes its data directly from the Form 1 filings that utilities send annually to the U.S. Federal Energy Regulatory Commission (FERC). The past year's spikes in oil and natural gas prices aren't yet reflected in the full-year data available from UDI.

"At a time when the eyes of the nation are on energy prices, nuclear power's re-emergence as the low production-cost leader is a reminder that the United States needs a diverse energy portfolio that relies on nuclear energy," said Marvin Fertel, Nuclear Energy Institute (NEI) senior vice president.

"Electricity consumers of all kinds, as well as state and federal lawmakers, should take notice that nuclear power plants provide tremendous value-economically, environmentally and with regard to reliability, energy security and stable electricity price," Fertel said. "Nuclear energy is unmatched among large-scale electricity sources capable of producing electricity 24 hours a day, seven days a week."

Average production costs at nuclear power plants haven't been lower than those for coal-fired plants since the mid-1980s, when safety improvements initiated across the industry caused the nuclear industry to lose the production-cost advantage that it held for years.

Although production costs don't represent the complete cost of electricity at nuclear power plants, Fertel said low production costs position these facilities to thrive in a competitive electricity marketplace even after capital costs, property taxes and other expenses are added.

"Assuming electricity markets average between 2.5 and 3 cents per kWh on a total cost basis, U.S. nuclear power plants already are very competitive," Fertel said. "They are operating at record levels of safety and reliability."

"They are stabilizing the electrical grid and helping to avert brownouts and blackouts," he said. "And they are doing so economically and without emitting any pollutants into the atmosphere. Consumers, the environment and our nation's economy are all the better for it."

NEI is the nuclear energy industry's Washington-based policy organization. For more information, visit www.nei.org.

By April C. Murelio, Managing Editor, Power Online

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