CO2 emission reduction laws would benefit nuclear plant firms

Philadelphia (Platts)--20Sep2006

Energy analyst Hugh Wynne said Wednesday that a handful of firms capable
of financing, building, operating and buying nuclear plants will benefit most
if the US moves toward the "carbon-constrained" environment that already
dominates in Europe.

The Sanford C. Bernstein analyst said at the firm's "Seminar on Climate
Change and the Power Sector" conference in New York that six
companies--Exelon, Entergy, Dominion, Duke Energy, Southern Company and FPL
Group--stand to gain most if the US were to move toward cap-and-trade or
another approach to cut carbon dioxide and other greenhouse gas emissions.

Those firms have extensive nuclear holdings and operating experience,
plus the financial wherewithal to build new nuclear plants.

Entities with nuclear plants in the Midwest and Northeast--regions
dominated by coal-fired generation--also will see benefits from a move toward
carbon constraint, Wynne said, noting that firms with nuclear assets in those
regions include Exelon, Constellation, FirstEnergy, Dominion, PPL and PSEG.

Wynne also added he expects that, even if CO2 emission credit prices
approach those seen in Europe--an average of about $27/ton over the past
several years--he expects that coal-fired plants will remain ahead of natural
gas-fired plants in dispatch sequences, even though coal plants generate about
twice as much CO2/MWh.

At the conference, representatives of American Electric Power and FPL
said they each expect some kind of CO2-constraint law to be implemented in the
US over the next few years, and that CO2 is a consideration in all their plant
and fuel planning.

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