nuclear-news

Nuclear power: The next bailout

Nuclear power: The next bailout
Central Penn Business Journal By Eric Epstein
2/23/2009 – “……………………

Jim Rubens, former chairman of the New Hampshire Republican Party, observed, “My party, the Republican party, is too deep in bed with the coal, oil and electric utility industries to remember its free market principles.”

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

Since Wall Street deferred, Congress and former President Bush approved nuclear loan guarantees for new nuclear reactors in the Energy Policy Act of 2005. In December 2007, $18.5 billion was set aside in federal loan guarantees. An additional $2 billion was allocated for new uranium enrichment. And nuclear power companies were guaranteed $2 billion in federal insurance to cover construction delays caused by court challenges or any other distraction outside “normal business risks.”

The Department of Energy actually admitted that $18.5 billion would build just two new reactors. The program is over subscribed with $75 billion in requests.

Is there 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, 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.”

February 24, 2009 - Posted by Christina Macpherson | business and costs, USA