Yesterday at a Senate Energy and Water Appropriations Subcommittee hearing, Energy Secretary Chu said an additional $9 BILLION in Treasury-backed loan guarantees for nuclear reactors would be needed to fund the three nuclear projects that are currently contending for loan guarantees. This would add to the $18.5 billion already provided for nuclear loan guarantees and comes on the heels of an $8.3 billion loan guarantee to Georgia-based Southern Company this February.
Loan guarantees for nuclear reactors carry significant risks for taxpayers. Asking taxpayers to pony up more, when we’ve already provided an overly generous $18.5 billion, is just plain fiscally reckless. Nuclear reactors can cost $6 billion to $10 billion each and government sources have found nuclear loan guarantees have more than a 50% risk of default.
Adding insult to injury, most of the top contenders for the loan guarantees have already faced enormous cost increases, construction delays and design flaws, making the prospects for taxpayers recouping their money even less likely.
When will the federal government learn that no matter how much taxpayers give, the nuclear industry wants more? The nuclear industry has already applied for $122 billion in loan guarantees-- far surpassing any other technology that has applied for loan guarantees. And with extremely high capital costs, significant technology risks, and a track record of project defaults, Wall Street is unwilling to back them. Even before the mortgage bubble burst, when the market couldn’t get its hands on enough high risk investments, investors treated nuclear power like it was radioactive. If it’s too risky for Wall Street, it’s way too risky for taxpayers.
After decades of generous subsidies, the time has come to cut the taxpayer safety net and let the nuclear industry stand on its own two feet. We’re already on the hook for $18.5 billion for new reactors. Getting out ahead of too many projects will only guarantee huge losses for taxpayers.
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