Obama’s Nuclear Push Good but Not Enough
Nicolas Loris /
President Obama announced $8.3 billion in federal loan guarantees today to commence projection construction on two nuclear reactors in Burke County, Georgia. This is good news. Congress has authorized $18.5 billion in loan guarantees for nuclear energy projects under the Energy Policy Act of 2005, which also provided other subsidies for nuclear power to help mitigate the effect of decades of regulatory risk for approximately the first six nuclear reactors built in the U.S. While the administration should be applauded for finally getting this program off the ground and getting the remaining $10.2 billion issued should be a priority, loan guarantees are not enough to recreate a robust nuclear industry in the United States. Indeed, an expansion of the program could do much more to stifle the industry’s growth than to help it.
Reuters reports that “A spokesman for Southern [Company] said the loan guarantee would cover up to 70 percent of the company’s portion of the project’s costs.” The money would be paid back if Southern Co. earns back its costs. Loan guarantees can help overcome some near-term financing obstacles, but they are subsidies and should not be expanded. Heritage nuclear expert Jack Spencer writes: (more…)