Nuclear Loans, Subsidies & other
Taxpayer Swindles….
May 5, 2012
Sierra Club National Nuclear
Strategy Conference
Michael Mariotte
Nuclear Information and Resource Service
How we got where we are….
Energy Policy Act of 2005:
*authorized cost-overrun support of up to $2
billion total for up to six new reactors;
*authorized production tax credit of up to $125
million total a year, estimated at 1.8 US¢/kWh
during the first eight years of operation for the
first 6,000 MW of capacity—approx. 5 reactors-consistent with renewables;
*authorized loan guarantees of up to 80% of
project cost to be repaid within 30 years or 90%
of the project's life.
Energy Policy Act of 2005, part 2
*extended the Price-Anderson Act through 2025;
*authorized $2.95 billion for R&D and the building of an
advanced hydrogen cogeneration reactor at Idaho
National Laboratory;
*authorized “standby support” for new reactor delays that
offset the financial impact of delays beyond the
industry's control for the first 6 reactors, including 100%
coverage of the first two plants with up to $500 million
each and 50% of the cost of delays for plants three
through six with up to $350 million each.
This dream bill led to industry
dreaming….
Nuclear Energy Institute, February 2006: “To be
conservative, the NEI financial analysis assumes
a capital cost of approximately $2,000 per
kilowatt for the first few plants built, declining to
approximately $1,500 per kilowatt for the later
plants.”
Economics Reality Check, Part 1
• Mayo Shattuck (Constellation Energy), March
2009: Calvert Cliffs-3 will be “about $10 billion”
not counting financing and other costs
• Turkey Point (FP&L), September 2009:
$8,200/kw—about $11 billion per reactor
• Bell Bend (PPL, Pennsylvania), 2010: $13-15
billion for one 1600 MW EPR reactor ($89,000/kw)
• Levy County (Progress Energy), May 2012: $24
billion for two reactors (about $10,000/kw)
Economics Reality Check, Part 2
• Citigroup UK, November 2009: “New Nuclear: The
Economics Say No”
• DOE: Average cost overrun in first round of reactors:
207%
• Areva EPR in Finland: already 100%+ overrun
Standard & Poor’s, Moody’s and Fitch’s rating services all
essentially have said “no” to new nuclear. No U.S. bank
will loan for new reactors without CWIP or loan
guarantees.
Only two ways to pay for new
nuclear
• Construction Work In Progess, also known as
Early Cost Recovery
• Taxpayer loan “guarantees:” in fact, taxpayer
loans
2007 battle over loan guarantees
• Bush Administration wanted $50 Billion in new loan
guarantees for new nuclear reactors
• Grassroots campaign in opposition: 125,000+ e-mails in
opposition, & thousands of phone calls
• Musicians came to DC, met with key Congressmembers
and brought public attention to the issue
• Speaker Pelosi said no, and added that renewables would
get however much nuclear got
• Compromise position: $18.5 billion for new reactors, $2
Billion for uranium enrichment, $18.5 Billion for
renewables/efficiency, $8 billion for “clean” coal.
2009 battle over loan guarantees
• Sen. Bennett (R-Utah) led effort in February
2009 to add $50 Billion to nuclear loan
guarantee program
• Another major grassroots effort, w/support from
Reps. Waxman & Markey, & tacit support from
new Obama administration
• Defeated.
2010-2011 battles over loan
guarantees
• The idea of adding more money—from $9 Billion
to $54 Billion—for new nuclear came up about a
dozen times from Obama administration & at
various levels of Congress during 2010-2011.
• More than 200,000 grassroots e-mails,
thousands and thousands of phone calls, and a
new skepticism about federal spending
generally…
• Defeated. Defeated. Defeated. Defeated…
Meanwhile, DOE was trying to give
away the money it had….
• February 2010. President Obama personally
announced conditional approval of $8.3 Billion
for Vogtle reactors in Georgia.
• $2 billion granted for Areva uranium
enrichment plant in Idaho
• October 2010. Unknown amount, but believed
to be about $10 billion, offered to UniStar
Nuclear for Calvert Cliffs-3 in Maryland.
…but not very successfully
• Constellation Energy—1/2 of UniStar—balked at loan
terms (and really, entire Calvert Cliffs-3 project), and
abandoned UniStar, selling its 50% share to Electricite
de France for pennies on the dollar
• Areva enrichment plant is on indefinite hiatus because of
financial issues at Areva, lack of future demand for
uranium
• Vogtle received license, February 2012, but apparently
“conditional” meant no conditions were actually worked
out. DOE/OMB now trying to work out conditions with
Southern Company
The most important battle right
now: stopping the Vogtle loans
• DOE/OMB have not come to terms on loan agreement (which
would come directly from taxpayers through Federal
Financing Bank).
• SACE lawsuit assures some transparency/public statement of
credit subsidy fee, so DOE can’t lowball. Uproar over Solyndra
loan also puts pressure on DOE/OMB.
• Southern already submitting 32 license amendments—they
weren’t ready for license.
• Coalition lawsuit against licensing assures it will stay
controversial.
• 9,000+ e-mails through NIRS alone; others doing too, but we
need much more.
New battle? Ending tax credits….
• Tax credits for new nuclear have not been
challenged at all
• Parity with renewables is not quite true—
renewable tax credits have to be re-authorized
constantly; nuclear tax credits are permanent
• Renewables offer benefit to society; nuclear
offers misery to society
• We should begin now to lay groundwork for
repealing nuclear tax credits.
Another target…the $10.2 Billion still
in program
• $10.2 Billion in nuclear loan program still
unspent, and entire Title 17 program remains
very controversial.
• Is it possible to have these funds withdrawn?
• What about ending Title 17 entirely? What
should safe energy community position be?
• Also on the block: loan/gift for USEC plant.
Upcoming issue? “Clean Energy
Standard”
Outgoing Senate Energy Chair has again proposed
a dirty “Clean Energy Standard.” Hearing on
May 17.
GOP is opposed so not going anywhere this year….
Would create 80 GW of new nuclear by 2035,
according to EIA (about 100% increase).
Renewables would increase by 34%.
The public is with us!
• March 2012 ORC International poll, for Civil
Society Institute:
• 80% say “taxpayers and ratepayers should not
"finance the construction of new nuclear power
reactors in the United States through tens of
billions of dollars in proposed new federal loan
guarantees."
The public is with us….
• 76% would support "a shift of federal loanguarantee support for energy away from nuclear
reactors and towards clean, renewable energy,
such as wind and solar."
• 80%--including 78% of Republicans, 83% of
Independents, and 82% of Democrats--oppose
the use by utilities in some states of advance
billing (known as "Construction Work in
Progress“) to pay for the construction of new
nuclear and other power plants.
The public is still with us….
• 78% favor a new Congressional review of the
Price-Anderson Act and say that nuclear
companies should be liable for damages from a
nuclear accident.
• 51% support a moratorium on new reactor
construction.
And on CES…
• 66% say “Clean Energy Standard” should not include
nukes, coal, or fracking.
• Watch for a NIRS compendium on these and other poll
results in early June 2012.
• CSI & EWG working to put together a no nukes, no coal,
no fracking, no dirty biomass coalition to unite
movements.
Michael Mariotte
Executive Director
301-270-6477
nirsnet@nirs.org
www.nirs.org