The Blossoming of Nuclear Power


"Owning companies that already own nuclear is the sweet spot for investing in utilities."

The U.S. stands at a pivotal moment for the advancement of nuclear energy. President-elect Barack Obama has put forth a goal to reduce carbon emissions in the U.S. by 80% by 2050, using $150 billion over 10 years to create a "clean-energy" future. Nuclear plants are the biggest producers of energy that doesn't emit any greenhouse gases.

"Nuclear power is in a renaissance," says Tom Neff, a physicist and research affiliate at MIT's Center for International Studies. In fact, 17 applicants are seeking government approval to build 26 nuclear plants, meeting a Dec. 31 deadline for federal tax credits and potentially ending a 30-year hiatus in the construction of new U.S. nuke facilities.

That adds up to a big investment opportunity. Even if it takes 10 years for the first of the new crop to be built—a distinct possibility—some of the power companies operating the 104 existing nuclear plants look tempting right now. Their stocks are cheap and their competitive advantages are many. They have lower costs than rivals such as coal-fired facilities, putting them in a better position to ride out the recession. They'll come out much better than the competition if a carbon tax is imposed. And they're better-prepared for the long haul in the new era of nuclear power. "Owning companies that already own nuclear is the sweet spot for investing in utilities," says Mark Finn, utilities analyst at T. Rowe Price.

"I have seen a sea change in public acceptance of nuclear power," says Slocum Hollis. "People have seen it for 35 years now, and it's working," she says. And perhaps most important, "it has a lot of jobs associated with it in many communities."

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