Carbon Caps May Give Nuclear Power a Lift
Source: The Wall Street Journal (5/19/08)
As Congress debates whether to limit carbon-dioxide emissions, one of the most vocal supporters of such legislation -- the nuclear-power industry -- is poised to reap a multibillion-dollar windfall if restrictions take effect.
Some nuclear operators are already forecasting how much their profits could increase under various versions of greenhouse-gas legislation that are under consideration. Among the nuclear operators that stand to profit most are Exelon Corp., FPL Group Inc., Constellation Energy Group, Entergy Corp., FirstEnergy Corp., NRG Energy Inc. and Public Service Enterprise Group Inc.
Carbon limits could usher in a period of "supernormal profits" for nuclear operators in markets where rates are deregulated and have more ability to rise, says Hugh Wynne, utilities analyst for Sanford C. Bernstein & Co. But he warns that profits, if perceived as excessive, run the risk of inciting a public backlash, perhaps including calls for a windfall-profits tax.