Nuclear Power - The 'Other White Meat'

By Eric Epstein 

"My party, the Republican party, is too deep in bed with the coal, oil and electric utility industries to remember its free market principles." 

-Jim Rubens, former state senator from Hanover, New Hampshire

      Federal legislation passed by Congress spells the demise of the free enterprise system as a means to address our energy problems. Remember when Republicans were welded to the notion that entrepreneurs should decide what constitutes the most prudent investment? Wasn’t it yesterday that conservatives proclaimed that the market is best suited to determine what technology should move America forward? 

Turns out that  politicians know what’s best after all. Welcome to this century’s version of corporate socialism. 

The “new energy policy” failed to increase mileage standards, did nothing to decrease fossil emissions, and gambled the nation’s energy security on rusted technologies. The legislation provided massive subsidies and tax credits to energy companies, but eased export restrictions on bomb-grade uranium.

The energy bill was the right bill for the wrong century. The legislation revisits failed solutions from the 20th century with financial giveaways not seen since the great railroad plunders of the 19th century. Tom DeLay was able to squirrel away $1.5 billion for an energy center in his home district without public debate. To borrow a jingle from the pork industry, Congress has made nuclear power the “other white meat.”  

The energy industry overall is enjoying record profits, yet nuclear power companies will be guaranteed $2 billion in federal insurance to cover construction delays caused by court challenges or any other inconvenience outside “normal business risks.”

      “Incentives” in the energy bill of 2005 included $1.6 billion for research and development of nuclear power. Since the establishment of the Department of Energy in 1978, more than $20 billion of taxpayer money has been spent on nuclear power research and development.

  The legislation commits up to $5.7 billion in tax credits for the first six nuclear reactors to be built. But wait, it gets better. Exelon, Entergy, Constellation and Florida Power & Light are entitled to unlimited loan guarantees for up to 80 percent of the cost of new reactors.

There is considerable exposure for Joe Q. Taxpayer. The Congressional Budget Office (CBO) considers the risk of default on government nuclear plant loan guarantees "to be very high – well above 50 percent." In a report issued on May 7, 2008, the CBO concluded the risk of default by private companies comes from the expectation that a new nuclear plant "would be uneconomic to operate because of high construction costs, relative to other electricity generation sources."

Federal welfare is separate from the state windfalls Pennsylvania nuclear plants received after deregulation. Exelon and PPL gobbled up over $9.5 billion in stranded costs primarily associated with the construction of nuclear power plants at Limerick and Berwick. “While homeowners are paying an average of 30 percent more than they did in 1997, Exelon, Pennsylvania Power & Light, and the other major electric utility companies in the state are paying 85 percent less in taxes on their plants, down from about $120 million annually to about $20 million”  according to a July 13, 2003 report from the Philadelphia Inquirer.

Does the nuclear industry really need additional subsidies?   

Perhaps the answer lies in an essay penned by the Cato Institute’s Jerry Taylor and Peter Van Doren on May 18, 2001, the day after president Bush unveiled his energy plan. “Aren't conservatives supposed to be skeptical about having the federal government pick winners and losers in the  marketplace?"  

" ...In the final analysis, the nuclear industry is purely a creature of  government. The administration needs to practice the free-market rhetoric that it preaches and put away its nuclear pompoms.”

 Eric Epstein is chairman of Three Mile Island Alert , Inc., a safe-energy organization based in Harrisburg, Pennsylvania and founded in 1977. TMIA monitors Peach Bottom, Susquehanna, and Three Mile Island nuclear generating stations: tmia.com