nuclear-news

FACING SOUTH 31 July 09
Power companies pursuing construction of new nuclear plants may find it harder to get credit — meaning ratepayers could end up shouldering a greater financial burden for the costly and environmentally harmful projects.

Moody’s Investors Service, a leading independent credit rating firm, recently released a report that says it’s considering taking a “more negative view” of debt obligations issued by companies seeking to build new nuclear plants.

Titled “New Nuclear Generation: Ratings Pressure Increasing,” the report raises concerns that investing in new nuclear plants involves significant risks and huge capital costs at a time when national energy policy is uncertain. Yet companies investing in new nuclear projects — cost estimates for which are hovering in the $6 billion range — haven’t adjusted their finances accordingly, according to Moody’s:

‘Few, if any, of the issuers aspiring to build new nuclear power have meaningfully strengthened their balance sheets, and for several companies, key financial credit ratios have actually declined. Moreover, recent broad market turmoil calls into question whether new liquidity is even available to support such capital-intensive projects.’…………………………
The financing problems have already caused some companies to back away from nuclear projects. Earlier this month, AmerenUE announced that it was suspending plans to build a new reactor at its Callaway plant in Missouri. A factor was that state’s ban of “Construction Work in Progress,” a financing scheme that allows a nuclear utility to recover the construction costs of a reactor from ratepayers before the reactor is up and running.

ISS – Nuclear plans hurting power companies’ credit ratings