No one ever said that the re-emergence of nuclear power would take the fast lane. The road, in fact, is filled with potholes that include some high profile deferments and ever-increasing capital costs.

Despite the delays, the long-term underlying fundamentals are favorable to the nuclear industry. Newer reactor designs are not only considered to be even more productive but also to have safety redundancies to give communities greater assurances. Emissions from nuclear energy, meantime, are negligible when compared to fossil fuels -- an important factor if one considers that regulatory pressures to limit greenhouse gases that cause global warming will only intensify.

While nuclear developers are doing the necessary groundwork to build, they still have not committed themselves. Most immediately, the credit markets are weak and the cost of raw materials such as cement, copper and steel is expensive. Those dynamics have caused Berkshire Hathaway's MidAmerican Energy to put off developing a nuclear plant in Idaho as well as South Carolina Electric & Gas to postpone submitting a combined license application to federal regulators.

The South Carolina utility, however, may choose to move forward given that access to generous benefits provided by the Energy Policy Act of 2005 may be limited. That law provides for loan guarantees of up 80 percent of a project's cost, while it also gives a tax credit of 1.8 cents per kilowatt-hour for 6,000 megawatts of capacity from new nuclear power plants for the first eight years of operation.

Certainly, the presidential candidates have all reacted favorably to nuclear energy. But proponents are concerned that shifting sentiments in future congresses would lead to the eradication of those financial incentives that are needed to make sure the first few modern reactors actually get built. After that, they say investors will be satisfied and that the industry will create economies of scale to bring down prices.

"Nuclear projects are lengthy -- possibly requiring 7-10 years to design and construct -- and there is some concern in the industry that a new administration and more strongly Democratic congress may not be as favorable to nuclear development," says Christine Tezak, regulatory analyst with the Stanford Group. "We agree, and believe that the controversial loan guarantee programs are particularly vulnerable to a change in political winds after the 2008 elections."

By 2010, utilities are expected to have submitted applications for 33 new reactors at 22 sites to the Nuclear Regulatory Commission for approval. When the first applications were submitted in 2007, the developers had estimated the cost to construct to be in the $4 billion to $6 billion range. Now, though, the price is in the $7 billion to $8 billion range -- the single greatest factor causing MidAmerican to get cold feet. Despite its reluctance, major utilities such as Dominion, Progress Energy and the Tennessee Valley Authority are keeping their eye on the ball.

TVA, which began its forays into nuclear energy in the 60s, says that the fuel source is second only to hydro in terms of cost efficiency. The demand for energy in its southeast region necessitates the expansion of its nuclear portfolio that already comprises 30 percent of its total generation, the company says. Last November, it applied for an operating license to build two modern reactors in Alabama, which is in addition to spending $2.5 billion to complete Unit 2 at its Watts Bar facility in Tennessee.

Progress Energy, meantime, says it will file an application to build two nuclear reactors at an existing nuclear plant site in North Carolina. Interestingly, the location was chosen in the 1970s and was designed to accommodate four reactors. But as history unfolded, only one of the units was actually built. The utility has notified federal regulators that if it moves forward with the two new reactors, they would be online around 2018. It says that a final decision is still more than a year away.

"The overall demand for electricity is not going to decrease in our fast-growing part of the country and, as a utility, we have an obligation to meet that growing demand," says Progress Energy's CEO Bill Johnson. "Using nuclear power, we can help secure our energy future with a fuel that does not contribute to global warming."

Critics of nuclear power, however, say that those nuclear-bound utilities have a fallacious energy strategy. If history is any indication, it would be a monumental task for them to stay on time and on budget. According to Arjun Makhikani, who advised TVA in the late 1970s and who now heads a nuclear watchdog group called the Institute for Energy and Environmental Research, says that utilities canceled 121 reactors in the post-1974 period and subsequently wasted $50 billion in 1995 dollars.

The TVA, in fact, was the last one to activate a new nuclear reactor -- Watts Bar Unit 1 in Spring City, Tenn. -- in 1996. That reactor ended up costing $6 billion to build after construction and financing in a process that took 20 years.

"Enjoying virtually every conceivable advantage at its birth -- from high public popularity to lavish government funding to virtually unanimous political support -- the commercial nuclear power industry in the United States is a moribund one, with virtually every one of its early advantages reversed," says Makhikan.

It's a different time now. Nuclear plants in the United States have solid safety and performance records. Last year, they exceeded previous production levels and generated 807 billion kilowatt-hours of power. Those achievements, on top of the current regulatory climate, are adding to nuclear power's new appeal. While the financial risks associated with development remain an impediment, they can be mitigated by continuing along the path that Congress laid out in the 2005 Energy Policy Act.

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