By Bruce Ratain
Field Associate, Environment Illinois
Last month saw the consummation of an Obama administration policy boondoggle that will increase America’s dependence on dirty energy sources, set our country back years in the fight against global warming, and impose billions of dollars in additional costs on taxpayers.
What happened? Back in February, the Obama administration announced it would help finance two new nuclear reactors at the Votgle nuclear power station in Georgia. Three weeks ago, Georgia Pacific, a subsidiary of Southern Company, and two other companies announced they would accept the offered $8.33 billion in federal loan guarantees. To mark the occasion, Environment Illinois released a new report titled “The Nuclear Bailout,” which articulates the myriad costs this bailout will impose on Georgians—and why nuclear investment is simply bad policy.
In fact, if one were looking for a perfect example of why not to invest in nuclear power, the Votgle power station is a good candidate. Georgia Power customers will be paying $1.6 billion in higher electricity rates over the next six years—an average of $10 per person per month by 2017—to help finance its construction. The power generated by these new reactors will cost between 10-13 cents per kilowatt-hour, even with the taxpayer-backed support of the loan guarantee—which is significantly higher than the 8.8 cents per kilowatt-hour currently paid by Georgians.
The actual costs are likely to be much higher. Of the 75 nuclear reactors completed between 1966 and 1986, the average cost more than tripled original construction budgets. Vogtle’s two original reactors came in at 1,200 percent over budget, raising Georgians’ electricity rates by 40 percent over several years. Since 2005, the estimated cost of a new nuclear reactor has tripled.
And those are just costs if things go right—if the reactor ultimately gets built. But in 2003, the Congressional Budget Office ranked risk default for nuclear reactor loans at more than 50 percent. The extremely high risk—combined with the extremely high cost—leads analysts at Moody’s Investor Services to call nuclear reactors a “bet the farm” risk. It’s why no new American nuclear reactor has been built in 30 years. And it’s precisely why the Obama administration’s loan guarantees are necessary—because Wall Street simply won’t tolerate the risk. If the project fails, taxpayers could be on the hook for upwards of $10 billion—up to $95 per American household.
Worse still, reduction in climate change pollution will be forced to wait the decade or more the reactors will take to build, whereas were these funds invested in energy efficiency, they could begin reducing emissions immediately. Per dollar spent, energy efficiency produces as much as 500 percent more power and is five times as effective at preventing CO2 pollution than nuclear power. Whereas the Vogtle reactors will cost Georgians more than they currently pay, were the money invested in energy efficiency, it would save Georgians $13 billion on their energy bills. Nuclear’s higher energy costs would cut 5,000 to 8,000 Georgian jobs; the lower costs derived from energy efficiency would create approximately 2,800 jobs statewide.
The new reactors will also harm the environment by doubling the amount of freshwater the plant consumes—currently 66 million gallons per day—from the Savannah River. Nuclear waste remains radioactive for generations, yet the U.S. lacks a plan for storing increasing waste stockpiles. And, increasing the number of plants nationwide will only make the task of protecting plants from terrorist and other threats more difficult.
The Vogtle story offers key lessons for Illinois, which already has more nuclear power plants, and nuclear waste, than any other state. Since 1987, Illinois has maintained a moratorium on new nuclear construction—yet in each of the past three legislative sessions, this prudent measure has come under attack from nuclear power developers and other interests.
The lesson to our legislators from Georgia is clear. When it comes to solving global warming, time and money are of the essence—nuclear power fails America on both counts. Clean energy technologies can begin cutting pollution immediately, do so at lower cost and with less risk, and will create more jobs in the process.
Bruce Ratain, field associate for Environment Illinois, can be reached at firstname.lastname@example.org.
From the July 14-20, 2010 issue