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RICHARD p, GODWIN To give you some idea of the amount of powe~ produced in the 16 plants so far committed this year - they, in total, would produce 13,000 MW, or ten times the total amount of power genera- tion capacity installed in the Flaming Gorge, Cureconti, Navajo, and Glen Canyon Dams. I should quickly add that the vast majority of plants in terms of numbers built in the U ,S, will continue to be fueled with oil, gas and coal - primarily, because they are smaller plants where nuclear power just does not compete, So far I have been speaking of newly ordered gellerating capacity. In terms of present installed capacity, including hydroelectric, nuclear is not so impr~ssive - but it is growing rapidly. It is expected that by 1980, approximately 30% of the total installed U ,S. Capacity will be nuclear fueled, Before going further to assess what this low cost nuclear power means to the Colorado Basin, I would like to digress for a m.oment for those who may not be familiar with nuclear power stations. A typical pressurized water nuclear power plant generates heat in the reactor core by nuclear fission of the uranium fuel. High pressure, high temperature water is circulated through the core to extract the heat generated, In the heat exchanger, steam is generated, which in turn drives a turbine-generator, producing electrical energy. . The nuclear reactor is simply a heat source, analogous to the boiler in a conventional unit util- izing fossil fuel. The heat output from the reactor is cdntrolled by varying the position of the control rods, which act to poison the nuclear reactor. Takin in total, the nuclear components which. I have just discussed can be designed with a rather compact form. As an example, compare a 450 MW plant - in this case, the Southern California Edison San Onofre Nuclear Station - with a 450 MW Coal-fired plant. It is about half the size, The compactness of nuclear fuel is even more impressive as compared to fossil fuels. For in- stance, the entire year's supply of nuclear fuel for a 1000 MW plant can be shipped in one 30-ton box car. Compare this with approximately 20,000, ISO-ton coal cars for a fossil plant of the same electri- cal power output. While the physical size of the plant and the vqlume of the fuel are important, neither are as critical to power costs as the location, financing and plant capacity, To provide some economic basis to understand how these factors influence costs, let me briefly describe recent cost trends. First, as reactor technology advanced and power ratings increased, capital costs per KW de- creased dramatically, As a result of the large surge in order for nuclear power, and resulting total com- mitment of the capacities of equipment manufacturer~, plant costs first decreased through 1967 and then started to increase substantially, We anticipate that the rate of cost escalation will be less as ad- ditional manufacturing capacity comes on line and tha~ cost will again begin to stabilize, Suffice to say that contracted costs for large plants in the 800-1000 lyIW range are now about $160-170 per installed KW. .I Second, nuclear fuel costs have also decreased' sharply, due largely to technological improve- ments and economies of scale in fuel fabrication, Decreasing fuel costs have been largely responsible for maintaining the competitive position of nuclear plants during the recent increases in plant capital costs, How do energy costs for a nuclear station compare with those of a fossil plant? As an exam- ple, compare the two reactors purchased by TV A to a modern coal fired plant, ENERGY COSTS, Mills/kwh 5,7%AFC 12,5%AFC PLANT TYPE Nuclear Fossil 2.37 2,83 3,60 3,90 The 5,7 percent annual fixed charge rate is somewhat typical of public utilities, and 12,5 percent re- presents private utility financing. You will notice :that nuclear power tends to become less competi- tive at higher interest rates as it is more capital inten~ive. Tight money conditions currently existing have pushed total annual fixed charges up to 14 perc~nt for some private utilities, further narrowing -30- :