10. New Nuke Plants: Taxpayers Support, Industry Profits

by Project Censored
Published: Last Updated on

Title: “Nuclear Energy Would Get $7.5 Billion in Tax Subsides, US Taxpayers Would Fund Nuclear Relapse If Energy Bill Passes”
Authors: Cindy Folkers and Michael Mariotte

Title: “US Senate Passes Pro-Nuclear Energy Bill”
Authors: Cindy Folkers and Michael Mariotte

Faculty Evaluators: Lynn Cominsky, Ph.D., Tamara Falicov, Ph. D.
Student Researchers: Andrea Martini and John Hernandez

Senator Peter Domenici (R-NM), along with the Bush Administration, is looking to give the nuclear power industry a huge boost through the new Energy Policy Act. The Domenici-sponsored bill will give nuclear power plants a production credit for each unit of energy produced. This provision, costing taxpayers an estimated 7.5 billion dollars, will be used to build six new privately owned, for-profit, reactors across the country. This is in addition to the $4 billion already provided for other nuclear energy programs.

Through the Energy Policy Act, Senator Domenici intends to create more incentives for nuclear power. It gives 1.1 billion dollars for the production of hydrogen fuel and 2.7 billion for research and development of new reactors under the Nuclear Power 2010 program. The Nuclear Power 2010 program is a joint government/industry effort to identify sites for new nuclear power plants and develop advanced nuclear technologies. In 2003 Congress approved an amendment to the Senate energy legislation, giving approximately $35 million to the Nuclear Power 2010 program. The program’s aim is to advance and expand the nuclear industry’s Vision 2020 policy, which has, as its goal, the addition of 50,000 megawatts of atomic power generation (i.e. 50 new reactors) by the year 2020. Toward this effort, the bill provides new regulations and subsidies to promote private sector investment by 2005 in order to get new power plants deployed in the U.S. by 2010.

Total capital investment for a new nuclear reactor could be in excess of $1.6 bilion dollars. The bill- up for vote in Congress, will establish a “preferred equity investment” provision requiring taxpayers to back private investment in new facilities up to $200 million. The Nuclear Power bill provides a set volume at which the government will buy power from nuclear companies. Nuclear companies would charge the government 50 percent above the market price and the government would in turn resell the power to taxpayers at higher than normal rates to make up for the difference.

Domenici’s will allow leach mining of uranium and push for more uranium enrichment facilities, maintaining that they are necessary for energy production. Although a new revision of the bill addresses some of the environmental concerns of a number of Senators, the charge is that this has been done simply to push the Nuclear Program forward. The new bill still allows depleted uranium to be treated as “low level” waste and requires the Department of Energy to take possession and dispose of waste generated at privately owned facilities (at no cost to the owner). The bill makes it easy to construct enrichment facilities by speeding up the process and easing EPA regulations.

The Energy Policy Act’s promotion of enrichment facilities is likely to benefit Louisiana Energy Services, which is run by a European corporation, Erenco. This corporation has made unsuccessful attempts to build private uranium enrichment plants in Louisiana and Tennessee and is looking to get a license to build an enrichment plant in New Mexico, Domenici’s home state.

Finally, the bill will repeal a ban on exporting highly enriched uranium to other countries, ignoring provisions made in the House that protect against terrorist attacks. The chance that nuclear bomb material could fall into terrorist hands would be much increased with an open market for highly enriched uranium. Also, more reactors in the United States provide terrorists with more targets. The current Administration supports the expansion of nuclear energy, yet has made no attempt to provide for its safety or oversight under Homeland Security legislation.

UPDATE BY: MICHAEL MARIOTTE AND CINDY FOLKERS: The 2003/2004 Bush Energy Bill has continued to stall in the Senate despite use of several convoluted legislative procedures to pass it. This legislation was born from the secretive Cheney Energy task force meetings, which have been the focus of much legal action. The secrecy of this task force is renowned and is yet another attempt by the Bush Administration to cut off the public from government access. The energy industry trade organization, Nuclear Energy Institute, met with the task force more times than any other single energy interest. It is no surprise that the bill is loaded with tax breaks, subsidies and policy initiatives for old energy sources, giving very little to energy efficiency or renewable energy efforts. This is an energy policy more suitable for 1960 and lacks vision and any foundation for our energy independence.

Through the relentless efforts of NIRS and many other national and local activists and environmental groups, the Energy Bill (HR-6) was defeated on November 21, 2003 by a cloture vote of 57-40. Bill proponents could not overcome a filibuster supported by both Republicans and Democrats. The many controversial provisions contained in HR 6, including the $6-15 billion tax production credit for new nuclear reactors, made it unpopular among both parties. In total, there was more to hate about this bill than to like and it couldn’t even be brought to the floor for a final vote.

In 2004 Senator Domenici introduced the energy bill again as S 2095. This bill changed very little from the original legislation. The notable exception is that the nuclear tax production credits (PTC) were excluded. But the bill still did not have the support to pass the Senate so Domenici decided to split the bill in two, attempting to pass the policy and tax sections separately. NIRS is now in the process of opposing these two bills. The policy portion of the bill has failed at this point, but the tax portion of S 2095 could still pass as an amendment to another bill. Again, the nuclear PTC is not part of this energy tax package, but Domenici has threatened to add it separately. This tax credit will amount to at least $6 billion and could reach as much as $15 or even $19 billion, according to estimates by EarthTrack.

Throughout this entire process, the press has covered the overall bill, especially controversial MTBE-related provisions, and numerous newspapers have taken strong editorial stands against it. However, virtually without exception these stories are/were woefully silent on the bill’s nuclear provisions. Since the PTC could be upwards of $15 billion in total cost, it deserves the spotlight as yet another amazing giveaway to the nuclear industry, this time to initiate a nuclear resurgence with taxpayer-supported construction of new reactors.

For more information, contact NIRS, 1424 16th Street, NW, Suite 404, Washington, DC 20036. http://www.nirs.org;202-328-0002, nirsnet@nirs.org

Or contact Public Citizen’s Critical Mass Energy and Environment Program, 215 Pennsylvania Avenue, SE, Washington, DC 20003, 202-546-4996, http://www.citizen.org/cmep