Nuclear Loans, Subsidies & other Taxpayer Swindles….

1. Nuclear Loans, Subsidies & other Taxpayer Swindles…. May 5, 2012 Sierra Club National Nuclear Strategy Conference Michael Mariotte Nuclear Information and Resource Service

3. How we got where we are…. Energy Policy Act of 2005: *authorized cost-overrun support of up to $2 billion total for up to six new reactors; *authorized production tax credit of up to $125 million total a year, estimated at 1.8 US¢/kWh during the first eight years of operation for the first 6,000 MW of capacity—approx. 5 reactors-- consistent with renewables; *authorized loan guarantees of up to 80% of project cost to be repaid within 30 years or 90% of the project's life.

4. Energy Policy Act of 2005, part 2 *extended the Price-Anderson Act through 2025; *authorized $2.95 billion for R&D and the building of an advanced hydrogen cogeneration reactor at Idaho National Laboratory; *authorized “standby support” for new reactor delays that offset the financial impact of delays beyond the industry's control for the first 6 reactors, including 100% coverage of the first two plants with up to $500 million each and 50% of the cost of delays for plants three through six with up to $350 million each.

5. This dream bill led to industry dreaming…. Nuclear Energy Institute, February 2006: “To be conservative, the NEI financial analysis assumes a capital cost of approximately $2,000 per kilowatt for the first few plants built, declining to approximately $1,500 per kilowatt for the later plants.”

6. Economics Reality Check, Part 1 • Mayo Shattuck (Constellation Energy), March 2009: Calvert Cliffs-3 will be “about $10 billion” not counting financing and other costs • Turkey Point (FP&L), September 2009: $8,200/kw—about $11 billion per reactor • Bell Bend (PPL, Pennsylvania), 2010: $13-15 billion for one 1600 MW EPR reactor ($8-9,000/kw) • Levy County (Progress Energy), May 2012: $24 billion for two reactors (about $10,000/kw)

7. Economics Reality Check, Part 2 • Citigroup UK, November 2009: “New Nuclear: The Economics Say No” • DOE: Average cost overrun in first round of reactors: 207% • Areva EPR in Finland: already 100%+ overrun Standard & Poor’s, Moody’s and Fitch’s rating services all essentially have said “no” to new nuclear. No U.S. bank will loan for new reactors without CWIP or loan guarantees.

8. Only two ways to pay for new nuclear • Construction Work In Progess, also known as Early Cost Recovery • Taxpayer loan “guarantees:” in fact, taxpayer loans

9. 2007 battle over loan guarantees • Bush Administration wanted $50 Billion in new loan guarantees for new nuclear reactors • Grassroots campaign in opposition: 125,000+ e-mails in opposition, & thousands of phone calls • Musicians came to DC, met with key Congressmembers and brought public attention to the issue • Speaker Pelosi said no, and added that renewables would get however much nuclear got • Compromise position: $18.5 billion for new reactors, $2 Billion for uranium enrichment, $18.5 Billion for renewables/efficiency, $8 billion for “clean” coal.

10. 2009 battle over loan guarantees • Sen. Bennett (R-Utah) led effort in February 2009 to add $50 Billion to nuclear loan guarantee program • Another major grassroots effort, w/support from Reps. Waxman & Markey, & tacit support from new Obama administration • Defeated.

11. 2010-2011 battles over loan guarantees • The idea of adding more money—from $9 Billion to $54 Billion—for new nuclear came up about a dozen times from Obama administration & at various levels of Congress during 2010-2011. • More than 200,000 grassroots e-mails, thousands and thousands of phone calls, and a new skepticism about federal spending generally… • Defeated. Defeated. Defeated. Defeated…

12. Meanwhile, DOE was trying to give away the money it had…. • February 2010. President Obama personally announced conditional approval of $8.3 Billion for Vogtle reactors in Georgia. • $2 billion granted for Areva uranium enrichment plant in Idaho • October 2010. Unknown amount, but believed to be about $10 billion, offered to UniStar Nuclear for Calvert Cliffs-3 in Maryland.

13. …but not very successfully • Constellation Energy—1/2 of UniStar—balked at loan terms (and really, entire Calvert Cliffs-3 project), and abandoned UniStar, selling its 50% share to Electricite de France for pennies on the dollar • Areva enrichment plant is on indefinite hiatus because of financial issues at Areva, lack of future demand for uranium • Vogtle received license, February 2012, but apparently “conditional” meant no conditions were actually worked out. DOE/OMB now trying to work out conditions with Southern Company

14. The most important battle right now: stopping the Vogtle loans • DOE/OMB have not come to terms on loan agreement (which would come directly from taxpayers through Federal Financing Bank). • SACE lawsuit assures some transparency/public statement of credit subsidy fee, so DOE can’t lowball. Uproar over Solyndra loan also puts pressure on DOE/OMB. • Southern already submitting 32 license amendments—they weren’t ready for license. • Coalition lawsuit against licensing assures it will stay controversial. • 9,000+ e-mails through NIRS alone; others doing too, but we need much more.

15. New battle? Ending tax credits…. • Tax credits for new nuclear have not been challenged at all • Parity with renewables is not quite true—renewable tax credits have to be re-authorized constantly; nuclear tax credits are permanent • Renewables offer benefit to society; nuclear offers misery to society • We should begin now to lay groundwork for repealing nuclear tax credits.

16. Another target…the $10.2 Billion still in program • $10.2 Billion in nuclear loan program still unspent, and entire Title 17 program remains very controversial. • Is it possible to have these funds withdrawn? • What about ending Title 17 entirely? What should safe energy community position be? • Also on the block: loan/gift for USEC plant.

17. Upcoming issue? “Clean Energy Standard” Outgoing Senate Energy Chair has again proposed a dirty “Clean Energy Standard.” Hearing on May 17. GOP is opposed so not going anywhere this year…. Would create 80 GW of new nuclear by 2035, according to EIA (about 100% increase). Renewables would increase by 34%.

18. The public is with us! • March 2012 ORC International poll, for Civil Society Institute: • 80% say “taxpayers and ratepayers should not "finance the construction of new nuclear power reactors in the United States through tens of billions of dollars in proposed new federal loan guarantees."

19. The public is with us…. • 76% would support "a shift of federal loan-guarantee support for energy away from nuclear reactors and towards clean, renewable energy, such as wind and solar." • 80%--including 78% of Republicans, 83% of Independents, and 82% of Democrats--oppose the use by utilities in some states of advance billing (known as "Construction Work in Progress“) to pay for the construction of new nuclear and other power plants.

20. The public is still with us…. • 78% favor a new Congressional review of the Price-Anderson Act and say that nuclear companies should be liable for damages from a nuclear accident. • 51% support a moratorium on new reactor construction.

21. And on CES… • 66% say “Clean Energy Standard” should not include nukes, coal, or fracking. • Watch for a NIRS compendium on these and other poll results in early June 2012. • CSI & EWG working to put together a no nukes, no coal, no fracking, no dirty biomass coalition to unite movements.

23. Michael Mariotte Executive Director 301-270-6477 nirsnet@nirs.org www.nirs.org