U.S. Nuclear Program – A Status Report

1. U.S. Nuclear Program – A Status Report APPA Board of Directors MeetingMarvin S. FertelPresident and Chief Executive OfficerSeptember 14, 2010

2. Sustaining Excellent Reactor Performance Record electricity production in recent years Produces 20% of electricity with 10% of U.S. capacity 2009: 799 billion kilowatt-hours Most reliable electricity producer at 90% capacity factor Nuclear energy dominates CO2-free electricity portfolio 2009: 90.5% capacity factor

3. Strong Public Support Continues 70% Definitely Build New Reactors 74% Favor Use of Nuclear Energy 87% Favor Renewing Licenses 87% Important for Our Energy Future 77% Acceptable at Nearest Site Source: Bisconti Research Inc./Gfk Roper March 2010 poll of 1,000 U.S. adults; margin of error is +/- 3%

4. Bisconti Research, Inc. survey of 1,000 U.S. adults; margin of error +/- 3 percentage points U.S. Public Opinion 1983 – 2010: Favorability to the Use of Nuclear Energy for Electricity Annual Averages Until 2010, Percentages

5. Bisconti Research, Inc. survey of 1,000 U.S. adults; margin of error +/- 3 percentage points U.S. Public Opinion: Acceptability of Adding a New Reactor Next to Nearest Operating Nuclear Power Plant (2005 – 2010) Percentages

6. Nuclear Plant Uprates Uprate Highlights • 5,744 MW of power uprates approved since 1977 • 3,526 MW of uprates under review and expected to be implemented by 2014 • Plant Completions • Watts Bar 1123 Mwe (under construction) • Bellefonte Unit 1 & 2 1256 Mwe (construction suspended – being considered) Source: U.S. Nuclear Regulatory Commission

7. Preparing for Longer-Term Operation 21 Intend to Renew 18 Under NRC Review 6 Unannounced • DOE and EPRI collaborating on extended operation • Industry investing in extended operation through replacements, upgrades and uprates • EIA’s 2010 Annual Energy Outlook reference case assumes 41 nuclear units will operate beyond 60 years License Renewals Continue ... 59 Granted Source: U.S. Nuclear Regulatory Commission

8. Obama Administration ActionsThat Support Nuclear Energy Expansion • Significantly improved and expanded the loan guarantee program • Announced $8.3 billion loan guarantee for Southern Co.’s $2.0 billion for AREVA Uranium Enrichment Plant • $36 billion increase in loan volume in FY 2011 budget • $73.8 million in clean energy manufacturing tax credits awarded too nuclear manufacturers • Nominated three qualified candidates for the U.S. Nuclear Regulatory Commission

9. Snapshot of New Nuclear Plant Development • 22 reactors under active review at NRC • First licenses late 2011, early 2012 • Nuclear plant design certification • Three design certifications in progress • Two previously certified designs being updated • First movers have started site preparation, ordered long-lead components • Expect four to eight reactors in commercial operation 2016-2018 • U.S. manufacturing supply chain growing

10. Cost of Electricity from Nuclear and Gas-Fired Capacity Source: NEI Financial Model PF – Project Finance, RB – Rate Base, CWIP – Construction Work in Progress, LG – Loan Guarantee

11. Learning Curve Opportunity – Korean Example 100% Construction Cost (% of First of a Kind) 94% 82% 80% Construction Duration (Months) 63% 63% 39 Goal 1995 1998 2002 2010 2004 ~ 2011 Shin Kori 1, 2 Ulchin 5, 6 Yonggwang 5, 6 Ulchin 3, 4 Yonggwang 3, 4 Shin Wolsong 1, 2

12. Reactors Under Construction and Planned Worldwide • Totals: • 61 units under construction* • 149 units on order or planned** Sources: International Atomic Energy Agency for units under construction and World Nuclear Association for units on order or planned. *Chart includes only countries with units under construction. **Countries planning new units are not all included in the chart. Planned units = Approvals, funding or major commitment in place, mostly expected in operation within 8-10 years. Updated: 8/10

13. Advanced Reactor Technologies • Small modular reactors (25-350 Mwe) • Light water, high temperature and fast reactors • Generation, process heat and improve fuel use • Could be under construction in 10 years • Built in modules at a factory and shipped to site • T&D planning activities reduced • Potential replacements for old inefficient coal plants • Time to market -- six years assuming an ESP • Need more design information before economic assessments can be completed

14. Summary of Studies on Climate Change Mitigation New Nuclear Generation Capacity Required *Based on a 1,400 MW average nuclear plant.

15. Used Nuclear Fuel: The New Reality • Administration terminating the Yucca Mountain project • Blue ribbon commission to develop recommendations on used fuel management • Interim storage safe, secure for indefinite period of time • Used fuel issues not an impediment to operating reactors or new plant development On-site storage for used fuel at the Surry station in Virginia

16. Political Agenda • Relationship strengthening/building and education • NRC Commissioners Nomination/Confirmation • Energy Policy Positions • Financing platform • Tax issues • Licensing clarifications • Nuclear Waste Policy Act

17. Political Agenda • Oppose imposition of inappropriate new costs • D&D tax • Increase in decommissioning fund tax rate • NRC oversight

18. Conclusions • Current 104 units sustained good performance • Industry pursuing plant uprates ~ 3500 MW’s+ • Industry pursuing license renewal – all 104 units • Greater than 60 years operation being explored • New plants – 4-8 reactors in commercial operation 2016 – 2018 • New small modular reactors being developed • Significant expansion of nuclear necessary to meet 80 percent CO₂ reduction by 2050