An article in yesterday's Washington Post incorrectly identified Frederick L. Webber as chief of the Edison Electric Institute. He is executive vice president for governmental affairs.
Nuclear industry officials, meeting with Vice President Bush, suggested a $50 billion federal loan program or federal regulation of huge regional electric companies as ways the government could help nuclear power get back on its feet financially, industry leaders said yesterday.
Bush, Energy Secretary James B. Edwards and Commerce Secretary Malcolm Baldrige were hosts at a closed-door meeting Tuesday afternoon to major players from every level of the electricity industry: eight utility executives, three nuclear power supply companies, two Wall Street investment firms and two top utility regulators. The purpose, Bush's office said, was to listen. He got an earful.
Charles H. Dean Jr., chairman of the Tennessee Valley Authority, proposed a National Nuclear Energy Pool, backed by a Federal Nuclear Financing Bank, "to assure supply of capital needed to complete plants now started and past some specified stage of construction." For about $50 billion in low-interest loans, he said, the bank could acquire control over 20 million kilowatts of nuclear generating power in about 10 years.
"This National Nuclear Energy Pool would form a reliable source of power . . . and be available during a national emergency," he said. He argued that the investment would be repaid in seven or eight years by savings on oil imports.
"The industry's major problem boils down to money," Dean said. In an interview, he said he recognizes that the administration's "general feeling is to cut expenditures," but that he remained hopeful the idea might be pursued.
Lelan F. Sillin Jr., chief executive officer of Northeast Utilities, a Connecticut-based group of five nuclear-owning companies, said he proposed the combination of utilities into large regional power companies that would be regulated by the Federal Energy Regulatory Commission (FERC), bypassing state utility commissions. "This would assure some degree of greater coordination in terms of planning," he said in an interview.
The privately-owned electric utility industry long has argued that state regulators hold the firms' earnings too low for them to survive. Sillin admitted that his idea is controversial. "Many state commissions would object, but I'm not sure all of them would," he said.
The industry is divided on all these ideas, said Frederick L. Webber, chief of the Edison Electric Institute, the utility trade group. He added that the $50 billion bailout "is a tough one to throw at this administration, but it's an idea we ought to take a look at."
Nuclear critics dismissed the proposal as a political impossibility. "I just can't believe that Congress will go along with some kind of a $50 billion nuclear Salvation Army when one out of every10 American workers is unemployed," said Rep. Edward Markey (D-Mass.)
All sides agreed that the meeting was a listening session and that Bush, who stayed for an hour, had enthusiastically promised a continuing dialogue. Edward F. Burke, president of the National Association of Regulatory Utility Commissioners, recommended that the talks be widened to include state governors and attorneys general, who frequently intervene in utility rate proceedings. He also proposed a modified version of Sillin's idea that would have FERC and state utility commissioners decide all utility matters jointly within a region.
FERC now regulates only wholesale electricity rates.