John McCain's plan to build 45 new nuclear reactors could cost taxpayers hundreds of billions in defaulted loan guarantees.
The Republican presidential nominee wants the plants built in time to help the U.S. meet a 29 percent increase in electricity demand by 2030. Industry estimates put their cost at $7 billion each ... Investment bankers, citing the industry's cost overruns in the 1980s, say they won't finance its long-sought ``nuclear renaissance'' without federal backing.
``Loan guarantees get reactors built, simply put,'' said Kevin Book, senior vice president and energy specialist at the Friedman, Billings, Ramsey & Co. investment banking firm in Arlington, Virginia.
... Taxpayers are on the hook only if borrowers default. A 2003 Congressional Budget Office report said the default rate on nuclear construction debts might be as high as 50 percent, in part because of the projects' high costs.
``The nuclear industry has been aggressively going after taxpayer-backed loan guarantees because nuclear technology cannot stand on its own two feet in the marketplace,'' said Allison Fisher, an energy policy analyst for the nonprofit consumer group Public Citizen in Washington.
Indeed, rising construction costs hit nuclear plants doubly hard because of safety considerations - which means a new nuke plant costs two to four times as much per kilowatt generated as any other kind of power. And with a total build cost at current prices of around $315 billion, defaults rates of 50% and more would involve taxpayers in yet more corporate giveaways and deficit spending. The potential costs in this plan alone outrun all the savings McCain says he can make by cutting earmark spending. The only way to make it viable is for consumers to pay up to four times more for their power.
Isn't it about time John McCain came clean about the pitfalls of his nuclear energy plan and explained why, if simply getting away from using oil is his priority, he won't turn up for Senate votes on tax credits for renewable energy generation?