May 6, 2011: To OMB: Will U.S. Taxpayers Have to Bailout Electric Utilities for Bad Nuclear Loans?
WASHINGTON (May 6, 2011) – Following the Fukushima nuclear meltdown, new questions about the inherent risks of nuclear power and the overall safety of the U.S. nuclear power plant fleet have been raised. Because the nuclear power industry is virtually incapable of building new plants without taxpayer-backed loans, Rep. Ed Markey (D-Mass.) is asking the Office of Management and Budget (OMB) to analyze how updated understanding of the risks of nuclear power, and the pull-back by private institutions from financing the industry, should then affect the U.S. government’s loan guarantee program.
“Wall Street banks are unwilling to finance new nuclear power facilities, and as a result these projects are unlikely to go forward without the United States government providing billions of dollars in loan guarantee support,” writes Rep. Markey to OMB Director Jacob Lew. “It is my belief that if any of these deals are to go forward, the terms of loan guarantees for nuclear power plants must be as transparent to the public as possible, they must fully incorporate all known market risks, and they must go as far as possible in protecting American taxpayers from having to bailout the nuclear industry in the event of a loan default.”
The letter details how several private financial institutions have warned that cancellations or delays of new nuclear power plants resulting from the Fukushima disaster and the subsequent reevaluation of nuclear safety in the United States would create higher financial risk for investors.
Because of the higher potential for cancelled projects and defaults on loans, Rep. Markey asks Director Lew how the American taxpayer will be protected from losing the $22.5 billion they are set to have tied up in these risky projects.
The full letter is available HERE.