carbon per dollar, 20-40 times faster, titled, “New Nuclear—the Economics Office and Government Accountability than new nuclear power—saving trilSay No.” That’s why central planners Office have estimated. In bankruptcy, lions of dollars over decades and avoidtaxpayers wouldn’t even recover before bought all 61 reactors now under con ing vast financial risks. struction worldwide. None were freeprivate lenders—not that there are any Still uncompetitive despite 60 years market transactions. Subsidies can’t private lenders. The Treasury’s Federal of handouts, nuclear developers clamor reverse bleak fundamentals. A defibrilFinancing Bank, financed by new Treasury debt, would issue the DOE-guarlated corpse will jump but won’t revive. for ever greater subsidies. The White anteed loan. Failure would cost taxAmerican taxpayers already reimHouse, Senate, and House all propayers $8.2 billion net. The developer burse nuclear power developers for pose expanded federal loan guarantees keeps any upside. legal and regulatory delays. A unique ($36 billion was the White House figThe Georgia project’s loan-guar - law caps liability for accidents at a presure); developers demand at least $100 antee default fee is much lower than ent value only one-third that of BP’s billion. The Clean Energy Deploythe Maryland plant’s, partly because $20 billion trust fund for oil-spill costs; ment Administration endorsed by both the Georgia developers have already any bigger damages fall on citizens. Yet houses of Congress could issue unlimshifted more of their remaining risks the competitive risks facing new reactors ited loan guarantees without congresto ratepayers. Their project is sional oversight. It would prob54 percent owned by municipal ably fund nuclear and renew utilities and rural co-ops with able energy like the recipe for access to cheaper financing than elephant-and-rabbit stew—one private utilities, including subsielephant, one rabbit. dized stimulus bonds. Some of Bureaucrats, not credit markets, would evaluate risks and these munis and co-ops signed pick winners. Taxpayers would 50-year contracts with the become America’s main energy nuclear operators that would put financiers and almost exclusive them and their customers on the nuclear risk-takers. America’s hook even for power not needed once market-based electricity or wanted. In 1982-83, the analoinvestments would work like gously financed five-reactor WPPSS (“Whoops”) project China’s, Russia’s, and France’s in the Northwest defaulted on nuclear command economies. municipal bonds, vaporizing $3This is bipartisan folly. $4 billion in today’s dollars. As nuclear subsidies spiral The Sequoyah nuclear generating station, near Chattanooga Moreover, a few southeasttoward fiscal ruin, brave voices ern states now make utility customers are uninsured, high, and escalating. protest from a handful of think tanks: finance new reactors in advance—often Since 2000, as nuclear power’s cost the Heritage Foundation, the Cato whatever they cost, whether they ever projections have more than tripled, Institute, the George C. Marshall Instirun, no questions asked, plus a return its share of global electricity genera tute, the American Enterprise Instito the utilities for risks that they no tion has fallen from 17 percent to 13 tute, the Competitive Enterprise Instilonger bear. This scraps all five bedpercent. That of cogeneration (making tute, the National Taxpayers Union, rock principles of utility regulation: electricity together with useful heat in Taxpayers for Common Sense. Yet payment only for service delivered factories or buildings) and renewables most congressional budget hawks— and only for used and useful assets; (excluding big hydropower projects) supposedly sages of circumspection rose from 13 percent to 18 percent. and defenders of free markets—urge accountability for cost and prudence; more nuclear socialism. return matching risk; and no commisThese bite-sized, modular, quickly Here’s a principled alternative: sion able to bind its successors. Such built projects—with financial risks, Reverse the energy subsidy armslaws re-create for nuclear power the costs, and subsidies generally below race. Don’t add subsidies; subtract same moral hazard that just shredded nuclear’s and declining —now domithem. Take markets seriously. Not just America’s financial sector. nate global power investments. Last for nuclear and fossil fuels but for all year, renewables (wind, water, solar, geothermal), excluding large hydroso-called “clean” technologies, head ith such juicy incentives, why electric dams, attracted $131 billion toward zero energy subsidies, free won’t private investors finance of private capital and added 52 billion enterprise, risk-based credit pricing, reactors? In 2005-08, with the strongest watts. Global nuclear output fell for the competition on merit, cheaper energy subsidies, capital markets, and nuclear past three years, capacity for two. services, greater energy security, and politics in history, why couldn’t 34 proThis market shift helps protect the dwindling deficits. posed reactors raise any private capiclimate. Renewables, cogeneration, and Who wouldn’t like that? Why don’t tal? Because there’s no business case. efficiency can displace 2-20 times more we find out? As a recent study by Citibank U.K. is ♦
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