Finally, a serious publication did the math:
John McCain’s plan to revive the U.S. nuclear power industry with 45 new reactors may cost $315 billion, with taxpayers bearing much of the financial risk.
Who else should bear the financial risk? After all, taxpayers bear the meltdown risk thanks to the Price-Anderson Act. Why should a mature industry with 20 percent market share bear any risk at all?
The Republican presidential nominee wants the plants built in time to help the U.S. meet a 29 percent increase in electricity demand by 2030.
Well, that is what the increase in electricity demand would be if we embrace Cheney’s third term. Kind of a self-fulfilling prophecy.
Industry estimates put their cost at $7 billion each.
Or, 50 percent higher. But why do taxpayers bear much of the risk? Because the industry can’t succeed without you, the taxpayer, putting your wallet on the line for each and every plant that gets built:
Investment bankers, citing the industry’s cost overruns in the 1980s, say they won’t finance its long-sought “nuclear renaissance” without federal backing. “Loan guarantees get reactors built, simply put,” said Kevin Book, senior vice president and energy specialist at the Friedman, Billings, Ramsey & Co. investment banking firm in Arlington, Virginia.
No new nuclear plants have opened in the U.S. since 1996. The 1979 scare at Three Mile Island in Pennsylvania and the 1986 explosion at Chernobyl in the former Soviet Union damped support for the technology.
Congress in December authorized $18.5 billion in guarantees that cover as much as 80 percent of nuclear plant construction costs — enough to fund three typical reactors. Three power companies have already applied for the aid.
If we wanted 45 new nukes, a McCain administration might well have to put up $277.5 billion in guarantees — I guess he is a maverick after all because I can’t imagine any sane normal politician proposing that. But what could go wrong?
Taxpayers are on the hook only if borrowers default. A 2003 Congressional Budget Office report said the default rate on nuclear construction debts might be as high as 50 percent, in part because of the projects’ high costs.
Hmm. Defaults that might cost taxpayers more than $100 billion. Sounds familiar.
But if we’re bailing out Fannie Mae and Freddie Mac, the mortgage industry for the nuclear family, then isn’t it only fair to mortgage our family’s future to the nuclear industry?
(Note: Any resemblance between Mr. Burns and a chimera clone of Karl Rove and John McCain is purely prescient on the part of Matt Groening.)
This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.
