1 The Promising Potential of New Nuclear Donald C. Hintz President, Entergy Corporation American Association of Blacks in Energy February 26, 2004, New Orleans

2 Two Things We know About the Future … There is a finite supply of oil and gas Environmental regulations are going to get stricter and stricter

3 Who is Entergy Corporation?  Fourth largest electric utility in the U.S.  Based in New Orleans, LA  Service Area: LA, AR, MS & TX  Generation> 30,000 MW  Customers> 2.6 million  Revenue> $ 8 billion  EnvironmentalOne of lowest utility emitters in U.S.  Awards  2002 Edison Award, highest in the U.S. utility industry  2002 Global Power Company of the Year, Business Week and Platts  2003 EEI Award for most profitable utility company  2003 Global Energy Company of the Year and Global CEO of the Year, Business Week and Platts  2003 CEO of the Year, Institutional Investor magazine

4 Who Is Entergy Corporation ? Air Emissions Comparison, 100 largest U.S. utilities

5 Entergy: A Premier Nuclear Operator Second largest nuclear operator in U.S. Operate all four U.S. reactor technologies Fastest growing nuclear operating company –5 units in the South for years –5 units in Northeast, acquired since 1999 Nuclear is a long-term growth strategy for ETR –More Acquisitions Being Sought –Lease And Operate For Others –Build New Plants –License Renewal Services –Decommissioning Services, Clean Up Radiological Sites For Others

6 Nuclear – A Growth Strategy Entergy Nuclear South Entergy Nuclear Northeast u Arkansas Nuclear One Grand Gulf River Bend Waterford 3 u Pilgrim James A. FitzPatrick Indian Point EC Vermont Yankee

7 Nuclear Capacity Factor Is at an All-Time High 79.5% in % in % in % in % in 2002 Platt’s World Performance Statistics Nuclear performance has improved 57%

8 Nuclear Costs At All-Time Low RDI /EUCG. Converted to $2002 by NEI (in constant 2002 cents/kWh) Nuclear is the lowest cost generation

9 Sources of Emission-Free Electricity

10 The Waste Volume All the used fuel produced by the U.S. nuclear power industry in 40 years of operation — about 40,000 metric tons — would, if stacked end to end, cover an area the size of a football field about five yards deep. Used Fuel: A Manageable Volume

11 Entergy Nuclear’s 2-track approach Selection and deployment of Advanced Light Water Reactor (Track 1) –Maturity of technology permits earliest deployment –Increases U.S. fuel diversity (reduces dependence on fossil fuels) –Reduces production of greenhouse gases Selection and deployment of High Temperature Gas Reactor (Track 2) –Technology most suited for low-cost, large volume hydrogen –Improved safety to near meltdown proof –Increase proliferation resistance –Long-term domestic fuel

12 A Freedom Reactor Demonstration Design & Build a High Temperature Gas Reactor (HTGR) as a demonstration plant Would provide technical basis for –Design certification –Prove hydrogen and electric power production are compatible –Establish construction and operating cost data –Demonstration of other significant operational benefits (waste reduction, increased fuel cycle flexibility) Bring Gen IV technology to the marketplace Vision: Build HTGR on DOE site to demonstrate H 2 & electricity production

13 Nuclear and hydrogen could team up to develop the potential of both technologies A Hydrogen-Nuclear Economy

14 A Hydrogen Economy Makes Sense Only If Hydrogen Is Produced With Non-GHG Emitting Processes Biomass Hydro Wind Solar Biomass Hydro Wind Solar Biomass Hydro Wind Solar Nuclear Coal Oil Natural Gas Sequestration Multiple Sources & Applications Stationary - Commercial, Residential Transportation Micro Apps

15 Hydrogen Advantages Reduces emissions from transportation Reduces dependency on foreign oil, gas –Worldwide production of oil expected to peak in 2010 –Peak worldwide production of natural gas shortly after Can be renewable energy’s best friend –Serve as the battery for renewables –Overcome some of the limitations for solar, wind and biomass Hydrogen economy only makes sense if it is produced from non-emitting sources

16 Hydrogen Today World Consumption  45 MM Tons/yr (200 GWs) –~96% Produced by Steam Methane Reforming (SMR) –Releases 320 MM tons of CO2/yr Source: Salomon Smith Barney, EIA, EPRI US Consumption  11 MM Tons/yr (50 GWs) –~96% Produced by SMR –Releases 74 MM tons of CO 2 /yr –Consumes 5% of Natural Gas Supply Oil Refining (37%) Ammonia Production (50%) Methanol Production (8%) Other (5%) Liquid Fuel Production is Rapidly Becoming Major Market for H 2 10% Annual Growth An Existing Market For Deployment of Nuclear – Hydrogen

High Temperature Electrolysis Thermochemical Water Splitting

18 New Nuclear Plants: Competitive Position $51 $45 $52 $59 $66 $73 $0 $10 $20 $30 $40 $50 $60 $70 $80 Nuclear at $1,000/kWe Gas at $4Gas at $5Gas at $6Gas at $7Gas at $8 $ per megawatt-hour Combined Cycle Plant Nuclear Energy Institute Without any value for environmental contribution

19 U.S. Public Opinion % Agree: Definitely Build More Nuclear Energy Plants in Future Bisconti Research Inc California Blackout

20 What’s Needed  Government Incentives to Cover FOAK Costs of Advanced Light Water Reactors (ALWR)  Funding for Demo Very High Temp Gas Rx (Freedom Reactor © ) at INEEL  Environmental Value for Nuclear