Mr. Speaker, how very appropriate it is today that this Congress is interrupting consideration of child welfare and foster care bills in order to address a gift for the nuclear industry. An…
Mr. Speaker, how very appropriate it is today that this Congress is interrupting consideration of child welfare and foster care bills in order to address a gift for the nuclear industry. An indifferent Congress that refuses to put an extra dime in addressing the deficiencies of our foster care system doesn't hesitate for a moment in giving a few more million dollars to the nuclear industry.
Isn't it amazing to hear what we will accomplish with a mere $16 million additional tax subsidy?
Our national security will be protected. This is the first concern I have heard here on the floor in months from a Republican about giving things to Russia and China. Maybe the better place to look than this bill is down the street at the White House, if the real concern is what we are giving to the Russia.
To hear supporters of this bill talk about the dangers to Georgia and South Carolina, you would think that Sherman's March on Atlanta, Georgia, and South Carolina was nothing compared to the harm this Congress would do if it failed to enact this bill.
Well, the devastation that faces consumers in these States has nothing to do with what Congress has or has not done, but it has to do with the nuclear industry seeking special treatment, much as it is seeking taxpayer subsidies here today.
It is an industry that has disregarded longstanding utility law to compel Georgians to pay higher electric bills for utility investments before they ever deliver one kilowatt of power. And it may, in fact, never get around to providing any power for all the money that is wasted on them.
This is a bill that is masquerading as an incentive for the future. A glorious new day for nuclear power. And yet it makes this tax credit available to 20-year-old nuclear technology and for last-century uranium mining.
This bill hardly matches its cover. It is true that $16 million of additional help to the nuclear industry is a mere footnote compared to the billions of taxpayer dollars, taxpayer resources, that have been lavished on this industry in the past.
In Georgia, the nuclear power industry literally turned decades of utility law upside down in demanding that electric ratepayers pay for what stockholders traditionally have paid for. Even after doing that, Westinghouse, a once distinguished American company, a blue ribbon company, went belly up. It has been nuked, and so have those local utility ratepayers.
As The New York Times reported recently:
``Many of the company's injuries are self-inflicted. . . . ''
``Bankruptcy will make it harder for Westinghouse's business partners to collect money they are owed by the nuclear-plant maker.''
``Now, it is unclear whether the company will be able to complete any of its projects, which in the United States are about 3 years late and billions over budget.''
``The cost estimates are already running $1 billion to $1.3 billion higher than originally expected, according to a recent report from Morgan Stanley, and could eventually exceed $8 billion . . . '' right onto the shoulders of those ratepayers in Georgia and South Carolina.
Of course, you would have thought, after the disaster at Fukushima and the many questions raised about nuclear power in Japan, that Congress would be rethinking nuclear power as a panacea. But even if you overlook this human disaster and the dangers to health and safety, a recognition that when the nuclear industry makes a mistake it is a mistake that lasts forever, if you just look at the economics alone, this kind of tax subsidy is unjustified.
With an ample amount of natural gas coming on the market, with so much renewable energy, nuclear simply has not made economic sense, and the history of this particular legislation demonstrates that.
When this tax break was originally set up back in 2005, there were some 32 nuclear plants that were going to take advantage of it, and it hasn't been because of the failure of Congress that they didn't. Out of that 32, exactly four have even begun to be built, and not one of them, not a single one of them, has been completed in over a decade and a half.
After this record of miserable failures, there is good reason to ask why taxpayers should be called on to give even more.
Mr. Speaker, I include in the Record a letter from 13 environmental groups expressing opposition to the legislation.
June 20, 2017.
Re Opposition to H.R. 1551--amending tax credit provisions
for ``advanced'' nuclear power.
Dear Speaker Ryan and Minority Leader Pelosi: On behalf of
our millions of members we are writing to register our strong
opposition to H.R. 1551 that would eliminate the placed-in-
service date for the nuclear production tax credit, which is
currently January 1, 2021. It would also allow public power
companies to receive the benefit of the federal production
tax credit even though they pay no taxes.
Despite H.R. 1551's misleading title, the production tax
credit it extends is not designated solely for new, supposed
``advanced'' nuclear technologies. Rather, reactor designs
that were approved over twenty years ago are eligible as
described in the bill analysis by the Joint Committee on
Taxation, ``An advanced nuclear facility is any nuclear
facility for the production of electricity, the reactor
design for which was approved after 1993 by the Nuclear
Regulatory Commission.''
The nuclear industry is once again demonstrating that it is
not only dirty and dangerous but that it is also not cost
competitive. Despite promises that this time would be
different, the four Toshiba-Westinghouse AP1000 nuclear
reactors under construction in the U.S., two at Southern
Company's
Plant Vogtle in Georgia and two at SCANA's V.C. Summer plant
in South Carolina, have yet again shown that the nuclear
industry is incapable of building new reactors within budget
or on time even with significant federal and state financial
incentives and new, streamlined federal licensing processes.
Reports issued in recent weeks show that the costs of these
projects are out of control, and falling further and further
behind schedule. Both are approximately 40% complete in terms
of construction, yet have already more than doubled in cost
and projected construction time. When construction started in
2009, Vogtle 3 and 4 were projected to cost a total of $14
billion and to begin generating electricity in 2016 and 2017,
respectively. Eight years later, the reactors may not be
completed until 2022 and 2023, if ever, and at an estimated
total project cost of $29 billion. Summer 2 and 3 were
projected to cost $11 billion, but overruns have pushed the
total to at least $22.9 billion. Consequently, utility
customers in both states are suffering as they are paying in
advance for the financing costs associated with the projects
far longer than initially predicted and will ultimately face
increasing bills because of the projects' costs overruns.
H.R. 1551 would unfairly reward Southern Company and SCANA
Corp. for not being able to complete these projects on time,
providing them each with more than $1 billion in taxpayer-
provided handouts to shield their shareholders from the
financial responsibility of pursuing inherently risky,
uneconomical projects. Perhaps even worse, eliminating the
placed-in-service date will provide an incentive for yet
other utilities to make the same mistakes.
The purpose of tax incentives, whether for nuclear,
renewable energy, or other technologies, is to support
innovation and technological leadership in the energy sector
and to drive the commercialization of promising new
technologies. When the nuclear production tax credit was
created in 2005, Congress hoped to support a revival of
nuclear reactor construction. Only four out of thirty-two
reactors proposed since 2005 ever began construction, and the
vast majority of the rest have been cancelled or indefinitely
shelved.
The failures to bring any of the four reactors online
within the fifteen-year period of the tax credit program
demonstrates that the technology is an even greater failure
than the first generation of reactors, and it will never be
widely commercialized. It is simply not a justified or worthy
investment of taxpayers' money to grant the owners of these
reactors the extraordinary relief of billions of dollars in
subsidies for projects that hold no promise for the U.S.
energy sector. It should not be forgotten that Southern
Company's expansion of Plant Vogtle has already received
substantial taxpayer support through the $8.3 billion in
federal nuclear loan guarantees and the public/private cost-
sharing support during the permitting and licensing process.
Finally, we oppose H.R. 1551 because the legislation
establishes an expensive precedent by creating brand-new tax
credit value for any not-for-profit project partners that can
only be transferred to all for-profit project partners. Both
the Vogtle and Summer projects feature a combination of both
for-profit and not-for-profit utilities. Not-for-profit
utilities, such as rural cooperatives, municipal or state-
owned utilities, have no federal tax liability and therefore
are not entitled to tax credits. But under H.R. 1551, the tax
credit is made available for not-for-profit entities that can
only be transferred to the project's for-profit partners.
Furthermore, H.R. 1551 specifies that rural cooperatives may
treat tax credit transfers as funds collected for ``the sole
purpose of meeting losses and expenses''--that is, as a form
of debt relief, for which production tax credits were not
intended. These measures amount to a brand-new, taxpayer-
shouldered giveaway for both Southern Company and SCANA Corp.
Furthermore, the definition of ``eligible partners'' that
can receive the tax credits from the not-for-profit
partner(s) is troubling as it ``includes any person who
designed or constructed the nuclear power plant, participates
in the provision of nuclear steam or nuclear fuel to the
power plant, or has an ownership interest in the facility.''
Providing tax credits to reactor suppliers or the uranium
mining industry is objectionable and goes beyond the original
intent of the law to provide incentives to actual nuclear
utilities that were among the first to pursue new nuclear
generation.
The rationales provided for eliminating the placed-in-
service date for the nuclear production tax credit are
irrelevant and have no merit:
``The cost of H.R. 1551 is minimal.'' The cost of the
nuclear production tax credits is at least $5.2 billion. Due
to both eliminating the placed-in-service date and by
permitting qualified public entities to transfer credits to
an eligible project partner, the latter provision would
actually increase the cost of the tax credits by allowing
non-profit, tax-exempt owners of reactors to take a large
federal tax credit. State and municipal utilities and rural
cooperatives are major owners of both the Vogtle and Summer
projects: rural cooperatives own 54.3% of the Vogtle 3 and 4
reactors; and Santee Cooper owns 45% of the Summer 2 and 3
reactors. By permitting these tax-exempt entities to transfer
tax credits to private sector partners, H.R. 1551 would
double the anticipated amount of the tax credits for the
Summer and Vogtle projects. The credits are valued at $18 per
megawatt-hour of electricity generated for the first eight
years. This would amount to about $160 million per year for
each reactor--$1.3 billion each, or $5.2 billion for all four
reactors. Taxpayers stand to avoid a $5.2 billion expense if
none of the reactors come online before the tax credits
expire at the end of 2020. By eliminating the placed-in-
service date, H.R. 1551 could cost taxpayers billions of
dollars for a failed technology.
``The tax credits are essential to the completion of the
Vogtle and Summer projects.'' It is not clear that the tax
credits will have any effect on the outcome of the Vogtle and
Summer projects at this point. Each of the reactors under
construction is now $5 billion to $7 billion over budget.
Even $1.3 billion in tax credits is not enough offset such
massive cost overruns; and, in/ any case, the benefits of the
production tax credit were assumed when the utilities began
building the reactors. If the utilities determine to complete
the reactors despite the cost overruns, the value of the tax
credits will not be a decisive factor.
``The tax credits are essential to maintaining U.S.
leadership in the global nuclear industry.'' Extending the
nuclear production tax credit will do nothing to promote U.S.
leadership in nuclear technology or reactor exports. The tax
credits themselves will derive to the domestic utilities that
will own and operate the Vogtle and Summer reactors, not the
manufacturers that design, export, and build reactors. The
nuclear divisions of Westinghouse and General Electric are
the only two U.S.-based companies actively involved in the
global reactor market, but both are now owned by Japanese
corporations (Toshiba and Hitachi). As a result of
Westinghouse's bankruptcy, Toshiba has determined not to
build any more new reactors, and not to continue supporting
the AP1000 reactor design. GE-Hitachi's prospects are no
better. The company has only two reactors in construction
globally (both in Japan and long-delayed).
``A viable commercial nuclear power industry is necessary
to support the nation's defense nuclear complex.'' This would
be a hypocritical reason to provide a subsidy to reactors,
and could prove dangerous to peace and security domestically
and globally. The U.S. is under international treaty
obligations to maintain a strict separation of civilian and
military applications of nuclear technology. Historically,
the U.S. government's purpose in promoting commercial nuclear
power was to encourage the peaceful application of atomic
energy, not to advance nuclear weapons. If the U.S. is
perceived as promoting civilian nuclear power as a means of
bolstering our nuclear weapons program, then it will
undermine our credibility in the nonproliferation arena. It
could also encourage enemies to view nuclear power plants as
extensions of our military establishment, and hence as
legitimate targets in armed conflict.
We strongly oppose this bill and urge you to vote against
this undeserved industry bailout. We urge Congress to oppose
this provision and instead focus on low- or no-carbon energy
choices that can be deployed affordably in the near-term, at
low risk, that will lead us to a clean and sustainable
future.
Sincerely,
Beyond Nuclear, Center for Biological Diversity, Clean
Water Action, Environment America, Friends of the
Earth, Greenpeace, League of Conservation Voters,
Natural Resources Defense Council, Nuclear Information
And Resource Service, Public Citizens, Sierra Club,
Southern Alliance for Clean Energy, Southern Oregon
Climate Action Now.
Mr. Speaker, I believe that there is an important additional concern raised by our colleague Mr. Neal already.
And that is the fact that there are so many other additional measures that our colleagues' bipartisan efforts that are pending in our committee on energy-efficient residential property, on fuel cells, on small wind energy, on geothermal heat pumps, to mention only a few. These represent forms of energy and energy conservation that will help us address climate change while achieving our energy objectives.
Mr. Speaker, instead of today's measure, our focus should be on safe, healthy forms of energy instead of an industry that costs too much and poses too much danger to humans.
