Nuclear Economics Boondoggles 101Georgia Women’s Action for New Directions
Energy Policy Act (2005)-authorized cost-overrun support of up to $2 billiontotal for up to six new reactors;-authorized production tax credit of up to $125 milliontotal a year, estimated at 1.8 US¢/kWh during the firsteight years of operation for the first 6,000 MW ofcapacity—approx. 5 reactors-- consistent withrenewables;-authorized loan guarantees of up to 80% of projectcost to be repaid within 30 years or 90% of theprojects life.-extended the Price-Anderson Act through 2025;
The Cost of DisasterPrice Anderson Act: No fault insurance system for non-military reactors. Power companies pay up to $12.6 billionGermany estimates a Fukushima scale accident would cost the country$11 trillionTepco’s Costs: “Impossible to bear”
Cost of Reactors-Mayo Shattuck (Constellation Energy), March2009: 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-Bend (PPL, Pennsylvania), 2010: $13-15 billionfor one 1600 MW EPR reactor ($8-9,000/kw)-Levy County (Progress Energy), May 2012: $24billion for two reactors (about $10,000/kw)
Nuclear EconomicsDOE: Average cost overrun in first round ofreactors: 207%Standard & Poor’s, Moody’s and Fitch’s ratingservices all essentially have said “no” to newnuclear. No U.S. bank will loan for new reactorswithout CWIP or loan guarantees.
CWIPConstruction Work In Progress, also knownas Early Cost Recovery
Federal Loan GuaranteesTaxpayer loan “guarantees:” in fact,taxpayer loans
2007 battle over loan guaranteesBush Administration wanted $50 Billion in new loanguarantees for new nuclear reactorsGrassroots campaign in opposition: 125,000+ e-mails inopposition, & thousands of phone callsMusicians came to DC, met with key Congress members andbrought public attention to the issueSpeaker Pelosi said no, and added that renewables would gethowever much nuclear gotCompromise position: $18.5 billion for new reactors, $2Billion for uranium enrichment, $18.5 Billion for renewables/efficiency, $8 billion for “clean” coal.
2009 battle over loan guaranteesSen. Bennett (R-Utah) led effort inFebruary 2009 to add $50 Billion to nuclearloan guarantee programAnother major grassroots effort, w/supportfrom Reps. Waxman & Markey, & tacitsupport from new Obama administrationDefeated.
2010-2011 battles over loanguaranteesThe idea of adding more money—from $9 Billion to$54 Billion—for new nuclear came up about adozen times from Obama administration & atvarious levels of Congress during 2010-2011.More than 200,000 grassroots e-mails, thousandsand thousands of phone calls, and a newskepticism about federal spending generally…Defeated. Defeated. Defeated. Defeated…
Meanwhile, DOE was trying to giveaway the money it had….-February 2010 President Obama personallyannounced conditional approval of $8.3 Billion forVogtle reactors in Georgia.-$2 billion granted for Areva uranium enrichmentplant in Idaho-October 2010. Unknown amount, but believed tobe about $10 billion, offered to UniStar Nuclear forCalvert Cliffs-3 in Maryland.
…but not very successfully-Areva enrichment plant is on indefinite hiatusbecause of financial issues at Areva, lack of futuredemand for uranium-Vogtle received license, February 2012, butapparently “conditional” meant no conditions wereactually worked out. DOE now trying to work outconditions with Southern Company
A look at Plant VogtleFirst two reactors: -went over budget by 1200% -Led to largest rate hike in Georgia history at the timeNew proposed reactors: -loan $$ not dispersed -just .5 - 1.5 % credit subsidy fee -$900 million projected overage -new construction flaws = more cost overages -CWIP fee 3x higher thanproposed
The most important battle right now: stopping the Vogtle loans- DOE has not come to terms on loan agreement (which would comedirectly from taxpayers through Federal Financing Bank).-SACE lawsuit assures some transparency/public statement of creditsubsidy fee, so DOE can’t lowball. Uproar over Solyndra loan alsoputs pressure on DOE/OMB.-Southern already submitting 32 license amendments—they weren’tready for license.-Coalition lawsuit against licensing assures it will stay controversial.-9,000+ e-mails through NIRS alone; others doing too, but we needmuch more.
New battle? Nulcear tax credits-Tax credits for new nuclear have not been challengedat all-Parity with renewables is not quite true—renewable taxcredits have to be re-authorized constantly; nuclear taxcredits are permanent-Renewables offer benefit to society; nuclear offersmisery to society-We should begin now to lay groundwork for repealingnuclear tax credits.
The public is with us!March 2012 ORC International poll, for Civil SocietyInstitute:80% say “taxpayers and ratepayers should not "finance theconstruction of new nuclear power reactors in the UnitedStates through tens of billions of dollars in proposed newfederal loan guarantees."
The public is with us….76% would support "a shift of federal loan-guarantee support for energy away fromnuclear reactors and towards clean, renewableenergy, such as wind and solar."80%--including 78% of Republicans, 83% ofIndependents, and 82% of Democrats--opposethe use by utilities in some states of advancebilling (known as "Construction Work inProgress“) to pay for the construction of newnuclear and other power plants.
The public is still with us….78% favor a new Congressional review ofthe Price-Anderson Act and say that nuclearcompanies should be liable for damagesfrom a nuclear accident.51% support a moratorium on new reactorconstruction.