Energy Bill Dumps $6 Billion In New Tax Credits To The Nuclear Power Industry

WASHINGTON—Two new provisions in the energy bill conference report, which just emerged from behind closed doors, would lavish more than $6 billion to the nuclear power industry. The energy bill conference report, released this weekend by Senator Pete Domenici (R-N.M.) and Representative Billy Tauzin (R-La.), contains two new tax provisions that would provide the first ever production tax credit for nuclear power and grant tariff relief for importers of nuclear power reactor components.

"It's outrageous that these new provisions would encourage more radioactive waste production and allow dirty expensive nuclear power plants the same tax credits as clean renewable energy," said Anna Aurilio, legislative director for U.S. PIRG.

Section 1310 of the energy tax title would give nuclear power companies a first ever electricity production credit. The credit is worth 1.8 cents per kilowatt-hour for advanced nuclear power plants that are placed into operation before January 1, 2021. The credit allows up to six 1000 megawatt plants to qualify for the credit, allowing each plant to claim up to a $125 million deduction per a year for eight years. The credit would create up to $6 billion in tax benefits for the nuclear power industry. The credits could benefit three companies, Dominion, Entergy and Exelon, which have applied with the Nuclear Regulatory Commission for early site review to build new nuclear power facilities.

"This is perhaps the single largest tax credit for energy production in the energy bill, as well as the current tax code," stated Erich Pica, director of economic campaigns at Friends of the Earth. "Even after 50 years of taxpayer handouts, the nuclear power industry is still seeking more."

The second provision, section 1365, benefits foreign manufacturers of nuclear power plant parts in France, Korea, Japan and Italy by exempting steam generators and reactor vessel heads from import tariffs. According to the Nuclear Energy Institute, which favors lifting these tariffs, the federal treasury would lose $15-20 million in tariffs for steam generator tubes replaced between 2007 through 2012 and $4.5 million for reactor vessel heads replaced before December 2007.