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Loans encourage more power plants
Steam billows from the cooling towers at Exelon's nuclear power generating station in Byron, Ill.
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Bill Radke: Later this morning, President Obama is expected to announce the go-ahead for more than $8 billion in government loan guarantees to build two nuclear power plants in Georgia. These would be the nation's first new reactors in decades. From Washington, Marketplace's John Dimsdale has the story.
John Dimsdale: The government will guarantee the repayment of private bank loans to the Southern Company, which hopes to have licensing approval to start building two nuclear reactors in 2012. The industry hopes the government seal of approval will jumpstart new construction around the country.
Baltimore's Constellation Energy is awaiting its own government loan guarantee. Mike Wallace is Constellation's chief operating officer:
Mike Wallace: Getting a loan guarantee is absolutely critical to moving forward. Commercial banks simply will not lend the money when no nuclear plant's been built in this country in 30 years.
But nuclear power skeptics, like Vermont Law School's Mark Cooper, say if other investors won't guarantee the loans, why should taxpayers?
Mark Cooper: It's quite clear that the industry is unable to move forward in private markets, and the industry wants essentially a bailout -- a commitment from taxpayers to guarantee very risky projects.
Congress has already approved $18 billion worth of loan guarantees for new nuclear plant construction. President Obama has asked for three times that amount in next year's budget.
In Washington, I'm John Dimsdale for Marketplace.
I so wish that part of the "stimulus package" waste of money we had devoted, oh, a few billion here and a few billion there to serious research to FUSION energy technology.
This FISSION stuff leaves us with endless waste that we cannot dispose of, can easily run out of control and frankly, isn't safe.
Nuclear could have much more of a future if it didn't come with such high pricetags ... monetary, environmental and political.
I helped in startup of Unit 1 at Plant Vogtle and got to see almost every part of it. It is a beautiful piece of machinery and it should be for the staggering amount it cost. In 87 we had T Shirts that said Finish the Who** in 8.4. That was 8.4 billion for the two units. I think the final total was 8.87 billion. So the loan guarantee of 8.3 would not have even covered the cost of the first two units.
The current estimate of around 14 billion keeps up with inflation but it is a pipe dream to think that
will be the final price. Construction on massive projects such as this rarely comes in on time and on budget.
Four billion dollars will not be adequate to cover a loan for a nuclear plant. If you take the reactors that were finished in the 1980s and simply apply inflation to these costs, a reactor today would cost over ten billion dollars. The average reactor in the United States cost over three times its original estimate. Loan guarantees encourage even higher overruns, with the reactor builders knowing that the taxpayers will pick up the tab. Loan guarantees are a pre-emptive bailout for the nuclear industry.
