“advanced cost recovery” – how the nuclear industry plans for consumers to take all the financial risks
“It exposes ratepayers to all the risk.” The nuclear industry’s answer to its post-Fukushima challenges, he said, “is to simply rip out the heart of consumer protection and turn the logic of capital markets on their head.”
His message to policymakers is simple, Cooper said. “This is an investment you would not make with your own money. Therefore, you should not make it with the ratepayers’ money.”
The Nuclear Industry’s Answer to Its Marketplace Woes, Greentech media Construction Work in Progress (CWIP) financing shifts the risks of nuclear energy to utility ratepayers. HERMAN K. TRABISH: FEBRUARY 22, 2012 A sign of the nuclear industry’s difficult situation in the aftermath of Fukushima is a proposal before the Iowa legislature that would allow utility MidAmerican Energy Holdings, a subsidiary of Warren Buffett’s Berkshire Hathaway, to build a new nuclear facility in the state using Construction Work in Progress (CWIP) financing (also called advanced cost recovery).
“Investment in nuclear power is the antithesis of the kind of investments you would want to make under the current uncertain conditions,” explained nuclear industry authority Mark Cooper, a senior fellow for economic analysis at Vermont Law School’s Institute for Energy and the Environment. “They cannot raise the capital to build these plants in normal markets under the normal regulatory structures.”
CWIP would allow the utility to raise the money necessary to build a nuclear power plant by billing ratepayers in advance of and during construction.
“Construction Work in Progress was intended to circumvent the core consumer protection of the regulatory decision-making process,” Cooper explained. “It exposes ratepayers to all the risk.” The nuclear industry’s answer to its post-Fukushima challenges, he said, “is to simply rip out the heart of consumer protection and turn the logic of capital markets on their head.”
The Staff of the Iowa Utilities Board concurred with Cooper. Its recommendations to the legislature followed his arguments in “Nuclear Socialism Comes to the Heartland of America,” his most recent paper on nuclear economics. In it, Cooper found that CWIP could increase average utility bills as much as $70 per month “before any power is generated by the reactors.”
His message to policymakers is simple, Cooper said. “This is an investment you would not make with your own money. Therefore, you should not make it with the ratepayers’ money.”
CWIP exposes ratepayers to all the risks inherent in nuclear energy, Cooper explained. “It gives the utility certain guaranteed returns, which they would never have, and distorts the utility incentives.”……
Vogtle has just been licensed by the Nuclear Regulatory Commission (NRC), causing a stir among environmental activists. To Cooper, the NRC’s decision on Vogtle was “a non-event” because, he said, “The morning after the license was issued, nobody on Wall Street woke up and said, ‘Hey! Now I’m going to buy in!'” The licensing decision had, he said, “no effect on the economics.”
More significantly, he added, the Obama administration has not advanced the Vogtle $8.33 billion federal loan guarantee that has been on hold since last year because of the budget and schedule problems.
“The Obama administration talks about nuclear power,” Cooper said, “but it has stopped putting the people’s money where their mouth is.”
Georgia is one of four Southeastern states that were convinced in the 2006 to 2007 period by nuclear industry lobbying to allow CWIP financing for nuclear plants. Of five projects, Cooper said, the only one that is “seriously moving forward” is Vogtle.
It demonstrates, Cooper said, what it takes to build a nuclear project today. “A massive amount of subsidy, the federal loan guarantee, construction work in progress and muni partners who also don’t raise funds in normal capital markets but are backed by the full faith and credit of municipalities,” he summarized. In addition, Cooper said he believes Westinghouse, the reactor manufacturer, is subsidizing the project in its own self-interest…… http://www.greentechmedia.com/articles/read/the-nuclear-industrys-answer-to-its-marketplace-woes/
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1.This month.
Zoom webinar – “Nuclear Winter: The Environmental Consequences of a Nuclear Exchange.”
April 7th at 11:30 am PST / 2:30 pm EST
Nuclear Winter: The Environmental Consequences of a Nuclear Exchange”
Join us for an informative webinar with renowned atmospheric scientist, Professor Brian Toon, as he discusses the environmental risks and global impacts of a nuclear war. Despite the potential damage caused by the blast from even small nuclear weapons, many countries continue to invest in and expand nuclear arsenals. Professor Toon will provide a scientific assessment of civilian fatalities, agricultural failures, climate concerns, and complications with food supply that would follow any international nuclear conflict. We need to plan how to prevent nuclear conflict and avoid catastrophe. Politicians and military planners must be made aware of global climate and agricultural complications that would ensue. Don’t miss this opportunity to learn from, and engage in, this vital conversation
The Road to War brings a sharp focus to why it is not in Australia’s best interest to be dragged into a war with China which will almost inevitably go nuclear very quickly. The filmmaker has interviewed some of Australia’s senior foreign policy analysts who have vast experience behind them in analysing what really is going on here as the United States rattles its sabres with China. And sets us up to be its proxy, like the poor Ukranians have been fed into the Meatgrinder. So America can remain the Top Dog. The Road to War reveals how the United States through its spy base at Pine Gap and by stationing six nuclear capable B52 bombers in the Top End (without permission from the traditional owners) is making Australia a prime nuclear target if the current war of words suddenly melts down into full scale war.
The Road to War shows the implicit connection between Carbon emissions (the US military uses a whopping 70% of America’s annual petroleum to move its armies and vast War Machine around the globe to its 800+ military bases..but under a loophole wangled at Kyoto, the US military does not have to report its C02 annual emissions). The Road to War starts screening at selected cities and regional centres in March. See the trailer end for details.
Antinuclear 
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