Friday, July 29, 2005

Energy bill stokes nuclear power

Philadelphia Inquirer | 07/29/2005 | Energy bill stokes nuclear power

Energy bill stokes nuclear power

Tax breaks and other incentives are offered.

By Chris Mondics

Inquirer Washington Bureau

WASHINGTON - After years on the defensive, the nuclear-power industry has come out a big winner in the energy bill passed yesterday by the House.

The measure, which passed, 275-156, and is expected to win Senate approval today, includes hundreds of millions of dollars in tax breaks, loan guarantees, and government-provided insurance for operators and builders of nuclear plants.

The incentives reflect a consensus among Republicans in Congress and the Bush administration that the nation needs more nuclear plants to meet a growing demand for power.

"It is going to help; there is no question that these provisions provide investment stimulus," said Steve Kerekes, a spokesman for the Nuclear Energy Institute, the industry trade association representing the nation's 103 operating nuclear plants.

Its advocates once promoted nuclear power as a source of inexpensive, nonpolluting energy.

But interest in it collapsed after the 1979 accident at the Three Mile Island nuclear plant spread low-level radiation over much of Southeastern Pennsylvania, and cost overruns at other plants forced sharp increases in electric rates.

The catastrophic 1986 explosion of the Chernobyl reactor in Ukraine - the worst nuclear accident in history - and a series of safety lapses at U.S. reactors added to public anxieties.

No new nuclear plants have been ordered since the 1970s, reflecting intense public skepticism about the safety and costs of nuclear power.

President Bush and other officials in his administration have regularly cited the potential advantages of nuclear power. Notably, Vice President Cheney's energy task force in 2001 recommended that the government take steps to encourage construction of plants and increase the output of existing ones.

Although cost overruns for a time had dampened enthusiasm for nuclear power, the task force said improved efficiency had made the cost of such power competitive with other sources.

The bill passed by the House yesterday would provide tax credits of up to $125 million per company on the energy produced by the first six plants to be built after the legislation becomes law.

It would also provide government-funded insurance for plant operators against financial losses from delays in obtaining federal government approval to build and operate the plants.

Those provisions, along with streamlined application procedures before the Nuclear Regulatory Commission, could prove a boost for the industry, Kerekes said.

But it is far from clear that the industry is on the verge of revival.

The issue of long-term disposal of nuclear waste - the spent nuclear fuel currently stored on site at plants around the country - remains unresolved.

Although Congress has endorsed Yucca Mountain in Nevada as a disposal site, a facility there is still years from opening, if it ever does.

Moreover, environmental groups remain deeply opposed to nuclear power, and promise to put up a fight.

Phil Clapp, president of the National Environmental Trust, contended that nuclear power remained more expensive than other sources. He also said it was not needed because energy companies were building enough plants to meet the nation's energy demand without them.

Of the subsidies in the bill, he said: "It's a huge waste of taxpayer money."


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