A Nuclear Renaissance? Bernstein Alternative Energy Conference September 16, 2008 Tom O’Neill Vice President, New Plant Development Exelon Generation Exhibit 99.1 |
2 Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from these forward-looking statements include those discussed herein as well as those discussed in (1) Exelon’s 2007 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 19; (2) Exelon’s Second Quarter 2008 Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors and (b) Part I, Financial Information, ITEM 1. Financial Statements: Note 12; and (3) other factors discussed in filings with the Securities and Exchange Commission by Exelon Corporation and Exelon Generation Company, LLC (Companies). Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. None of the Companies undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this presentation. |
3 It’s About the Economics Uncertainties make cost confidence difficult • Vendor estimates remain soft, fluid • Designs not yet complete, some not certified • Engineering/Procurement/Construction contract pricing will include “fixed”, “firm”, and “target” categories • Commercial risk-sharing provisions not yet established • Commodity cost volatility continues • Construction & regulatory schedules unproven in U.S. • Financing/credit environment in flux • Pending change in U.S. administration Current industry overnight cost estimates range from $2400/kw - $4500/kw … and rising |
4 Time & Action Will Reduce Level of Uncertainty Decision process is a series of decisions, not a single commitment – Decide to file a COLA – Decide to procure long-lead materials – Decide to build • Individual milestones move the process forward in a more manageable, deliberate way A new administration will take office, and act on its energy policy providing clarification The first movers will move sharing lessons learned Exelon has in place a quantitative risk assessment process • Comprehensive, balanced and integrated view of risks • Risk mitigation strategies developed to address the critical risks |
5 Exelon Takes a Long View of New Build We do not expect to be a first mover Our strategy is to preserve our options • Phased project approach, with off-ramp options Active participation in industry new build initiatives Continue to advocate for sound public policy on energy, including • Adequate federal loan guarantee authority • Effective market-based carbon policies • Competitive power markets • Long-term regulatory stability • Integrated spent fuel management strategy |
6 From a Long View, New Nuclear Looks Good Despite capital cost, cost of electricity generated by new nuclear can be competitive in nearly any likely scenario • Brattle Group study for State of Connecticut: Natural gas prices will continue to be volatile Efficiency & renewables are necessary, but not sufficient Carbon pricing will eventually be imposed Nation must build new nuclear But the first step is a high one Nuclear SCPC SCPC w/ CCS IGCC IGCC w/ CCS Gas CC Gas CC w/ CCS Capital Cost ($/kW) 4,038 2,214 4,037 2,567 3,387 869 1,558 Levelized Cost ($/MWh) 83.4 86.5 141.9 92.2 124.5 76 103.1 SCPC = supercritical pulverized coal; CCS = carbon capture & storage. Assumes carbon control |