From Facing South, where this story was first published.
Among the special interests that see the outcome of the mid-term elections as a win for themselves is the U.S. nuclear power industry.
NRG Energy, the New Jersey-based power company that’s seeking federal subsidies in the form of Department of Energy loan guarantees to build two more reactors at the South Texas Project near Bay City, has already told Bloomberg that it expects to benefit from Republican gains in Congress:
“A lot of the things we’re trying to do in Washington to move forward with zero- and low-carbon generation is something that at least the mainstream of the Republican Party wants to support — nuclear power in particular,” [NRG CEO David] Crane said in an interview. “It’s not just California and Oregon tree-huggers.”
NRG invested heavily in this election, with its political action committee contributing more than $323,000 to various House and Senate campaigns and its employees donating more than $137,000, according to OpenSecrets.org. The Nuclear Energy Institute, the industry’s lobby group, spent another $451,000.
During his post-election press conference, President Obama — who has close ties to the nuclear industry and who has already proposed tripling DOE’s loan guarantee program to $54 million — also talked about additional financial support for the nuclear power industry as a potential area of compromise in a divided Congress:
There’s been discussion about how we can restart our nuclear industry as a means of reducing our dependence on foreign oil and reducing greenhouse gases. Is that an area where we can move forward?
Whether nuclear power is a good solution to climate change is questionable, as is whether a Congress increasingly dominated by climate science skeptics would care.
Also questionable is whether the nuclear industry’s calls for more taxpayer assistance will resonate with politicians and an electorate that want Washington to rein in spending.
Nuclear technology is enormously expensive, and its costs are growing exponentially. The original cost estimate for the South Texas Project — first proposed in 2006 — was $5.4 billion. By last year, the cost estimate for the project had skyrocketed to a jaw-dropping $17 billion. And the Congressional Budget Office estimates the risk of default on these loans — which would leave taxpayers footing the bill — at well above 50 percent. Meanwhile, the cost of clean energy sources like solar is dropping.
The fiscal watchdog group Taxpayers for Common Sense is highly critical of nuclear loan guarantees:
Taxpayers should be seriously concerned about loan guarantees to the nuclear industry — proposed reactors have been riddled with cost overruns, delays and significant design problems, all of which can easily lead to taxpayers losing billions of dollars if and when these risky projects default. Even in the heyday of lending on Wall Street, private backers were not interested in investing in new nuclear reactors because of these serious uncertainties. Asking taxpayers to take on this financial risk is fiscally irresponsible.
Last week, a coalition of nuclear watchdog groups including the Natural Resources Defense Council, Union of Concerned Scientists and the Southern Alliance for Clean Energy sent a letter to the White House Office of Management and Budget asking it not to seek any additional loan guarantee authority for nuclear reactors. The letter pointed out that “[a]llocating even more loan guarantees to these large, uneconomic projects will put U.S. taxpayers at even greater risk.”
It will be interesting to see whether nuclear power opponents are able to forge coalitions with tea partiers and other fiscal conservatives to challenge nuclear loan guarantees.