Monday

Extra Nuclear Funding in Budget Bill Quietly Passes



The FY05 Omnibus Appropriations conference report (HR 4818), passed out
of conference committee Saturday, includes as part of the Energy and
Water Development section $50 million for the Nuclear Power 2010 program
-- five times what the Bush administration requested. This money is
the pool from which funds are drawn to support 50 percent of the cost of
the three Early Site Permit applications in Virginia, Illinois, and
Mississippi, as well as the three consortia that have announced their
intention to apply for a combined Construction and Operating License.
One consortium, NuStart Energy Development, has requested $400 million
in COL support over the next few years, and a second, led by Dominion,
has asked for $250 million.

"This is yet another example of the Bush administration subsidizing a
mature industry that should sink or swim on its own merits after fifty
years of market failures," said Michele Boyd, legislative director of
Public Citizen's energy program. "The money would be better spent
developing truly clean and renewable forms of energy generation."

Nuclear power will not alleviate our major energy problems of the day:
high oil prices and a reliance on oil imports from politically unstable
regions. Only 1.4 percent of our electricity is generated from oil, so
greater reliance on nuclear power will have essentially no impact on
demand for oil.

For more information, please visit www.energyactivist.org

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For Immediate Release: Nov. 22, 2004
Contact: Tyson Slocum (202) 454-5191; Erica Hartman (202) 454-5174

D.C. Regulators Should Counter PEPCO's Rate Hikes by Halting Disastrous
Deregulation Experiment

Public Citizen Urges the Re-Purchase of PEPCO's Power Plants

WASHINGTON, D.C. - D.C. government regulators are powerless to protect
consumers from PEPCO's proposed 17.7 percent electric rate hike because
deregulation has allowed unregulated companies to set higher prices,
Public Citizen said today. The consumer advocacy organization is urging
the D.C. Public Service Commission (D.C. PSC) to reject the requested
rate hike and work toward re-regulation, so the District once again will
have the regulatory power to ensure that prices consumers pay are tied
to the true costs of producing power.

The only way for D.C. to adequately protect consumers is to re-regulate
the region's electricity system by ordering PEPCO to re-purchase the
power plants it sold to Atlanta-based Mirant, because the commission is
less able to control rates if PEPCO is buying power from another entity
than if PEPCO re-acquires the plants it sold. Such a move would restore
the city's ability to regulate power prices and implement the cost-based
rate system that successfully protected consumers for 100 years.

Further, taking steps to re-regulate the system would be consistent
with national trends; nine states have either repealed or delayed their
deregulation laws in the past couple of years. Those states are Arizona,
Arkansas, California, Montana, Nevada, New Mexico, Oklahoma, Oregon and
West Virginia.

"This would put D.C. on the path of lower costs for consumers while
maintaining reasonable profits for PEPCO," said Tyson Slocum, research
director for Public Citizen's energy program. "Controlling rates is
particularly important for those on fixed or lower incomes, because they
are hit even harder by rate hikes."

PEPCO voluntarily sold four of its six D.C.-area power plants to Mirant
in December 2000. Mirant, which has paid $17.8 million to settle
allegations of Enron-style market manipulation, filed for Chapter 11
bankruptcy protection in July 2003. The sale of PEPCO's power plants
meant that D.C. no longer had any ability to regulate power prices as it
had for 100 years, because the U.S. Supreme Court has ruled that states
cannot regulate prices from power plants unless they are part of a
vertically integrated system.

PJM Connection -- regional transmission organization coordinating the
movement of electricity in all or parts of Delaware, Illinois, Indiana,
Kentucky, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, Tennessee,
Virginia, West Virginia and the District of Columbia -- is the largest
centrally controlled dispatch area in the United States. PEPCO must buy
all its power through the PJM market, and power prices in PJM have
skyrocketed 75 percent under deregulation, with inflation-adjusted
electricity prices rising from $25.92 per megawatt hour in 1998 to
$45.33 per megawatt hour over the first 10 months of 2004. These high
prices are rising far above the actual cost to produce electricity,
meaning unregulated power companies reap record profits while consumers
pay more.

"The sole reason PEPCO is seeking a rate increase is because PEPCO is
now forced to buy its power from unregulated power producers like Mirant
in the regional PJM market," said Slocum.

The D.C. PSC originally supported PEPCO's decision to sell its power
plants in an attempt to foster competition for consumers. The problem
is, "competition" isn't occurring in D.C. or in any states that have
deregulated.

For example, consider the benchmark used to measure the relative
success of such "competition": the share of D.C.'s residential consumers
who have chosen an alternative electricity supplier to PEPCO. The
highest "choice" rate achieved in D.C. was in December 2002, when 12
percent of the city's residents "chose" an alternative supplier to
PEPCO. Nearly two years later, by October 2004, nearly 10,000 fewer
D.C. residents were "choosing" an alternative supplier, reducing the
share of residential customers "choosing" to 7 percent. Nationally,
just 5 percent of residential consumers in the remaining 15 deregulated
states have switched suppliers because wholesale prices continue to
climb and retail competitors have shown little interest in serving
residential consumers.

There is little cost savings in choosing alternative providers serving
residential consumers in the District. The average annual price per
kilowatt hour for residential customers is 5.04 cents with PEPCO; 6.4
cents with Pepco Energy Services (PES), an unregulated subsidiary of
PEPCO, when 51 percent of the power comes from renewable energy sources;
7 cents with PES' option of providing electricity generated 100 percent
from renewable energy sources; 4.53 cents with Washington Gas Energy
Services (WGES), an unregulated subsidiary of Washington Gas, D.C.'s
regulated natural gas company; and 4.58 with WGES' option of providing
electricity in which 5 percent comes from windpower.

Although consumers may save a nominal sum by selecting an alternative
supplier, most residential consumers haven't made the switch because
they will be even less protected than if they were to stay with PEPCO.
For instance, the prices charged by alternative suppliers are wholly
unregulated, and alternative suppliers can raise prices dramatically
after a contract ends.

Under PEPCO's proposed rate increase, PEPCO's residential customers
will pay an average of $120 more per year on bills of approximately $690
per year.

"Deregulation is clearly a failed experiment in D.C's electricity
market," said Slocum. "It is time to recognize this colossal error and
stop a trend that harms consumers instead of helping them. We urge D.C.
to work towards fixing this broken system."

For more information about PEPCO and deregulation, go to
www.citizen.org/cmep/pepco.

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Public Citizen is a national, nonprofit consumer advocacy organization
based in Washington, D.C. For more information, please visit
www.citizen.org

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*** N O T I C E ***

National Academies Survey on Public Outreach for Radioactive Waste
Transportation Study

The National Academies -- which advises the federal government on
technical matters of science, engineering, and medicine -- is conducting
a survey gauging the public's concerns regarding the transportation of
radioactive waste. The information gathered in this survey will be
employed to craft public outreach materials on a forthcoming study on
this issue by the National Academies. The survey is available at:
http://www8.nationalacademies.org/survey/nap/napinternetsurvey.htm

Please note that Public Citizen has not necessarily endorsed the
contents of this report, as they are not publicly known at this point.

Questions about the CMEP ListServ can be directed to CMEP-request@LISTSERVER.CITIZEN.ORG.
Contact: Brendan Hoffman, 202-454-5134; Erica Hartman, 202-454-5174

To learn more about this and other Public Citizen Critical Mass Energy and Environment Program campaigns, visit our website at http://www.citizen.org/cmep/

-Public Citizen's Critical Mass Energy and Environment Program

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