MICHELE NORRIS, host:
The energy bill President Bush signed today offers billions of dollars in tax incentives, loan guarantees and other aid to promote energy production. There's been a lot of attention on spending for the oil and gas industry, but as NPR's Peter Overby reports, nuclear power did pretty well, too.
PETER OVERBY reporting:
President Bush has his roots in the oil industry, but in a speech on energy policy last April, he left no doubt how he regards the nuclear industry.
(Soundbite of April speech)
President GEORGE W. BUSH: One of the most promising sources of energy is nuclear power.
(Soundbite of applause)
OVERBY: Right now nuclear power supplies 20 percent of the electricity in the United States, but nobody in the US has built a new reactor plant since the early 1970s. The new energy policy in the bill signed today is intended to change that by providing new subsidies for the industry and extending old ones. Angelina Howard is executive vice president of the Nuclear Energy Institute.
Ms. ANGELINA HOWARD (Executive Vice President, Nuclear Energy Institute): This bill passed with strong bipartisan support, and the nuclear provisions were not the controversial provisions in the energy bill.
OVERBY: Here's what the bill has to offer the nuclear industry. It extends an existing cap on the industry's liability in case of a catastrophic accident; the extension is good for 20 years. For the first six plants to be built, the federal government will guarantee the construction loans. That lets the builder get financing at a lower interest rate. It also leaves the government with the tab if the builder defaults. The bill provides eight years of tax credits for the operating costs, the same tax break that goes to wind farms and other non-polluting sources.
Anna Aurilio is a lobbyist with the US Public Interest Research Group, which opposed the bill.
Ms. ANNA AURILIO (US Public Interest Research Group): It's hard to imagine how the federal government could do any more for nuclear power besides actually start laying the bricks and the mortar themselves.
OVERBY: But there's another break for the nuclear industry that's raised the most eyebrows. For the first six plants, the energy bill provides risk insurance, or, as the industry prefers to call it, standby support. Should one of those plants not get its license on schedule, the federal government would pay the power company either a quarter or half a billion dollars. The snag could be caused by anything from bureaucratic lethargy to a lawsuit to a terrorist attack. Again, industry spokeswoman Angelina Howard.
Ms. HOWARD: That came from the administration asking the industry, `What would it take for industry to commit private capital to build new nuclear plants?'
OVERBY: The first public sign of this new benefit came in April in that speech by President Bush. The president said he wanted to make the country less dependent on imported oil.
(Soundbite of April speech)
Pres. BUSH: To do so, I've asked the Department of Energy to work on changes to existing law that will reduce uncertainty in the nuclear plant licensing process. It can also provide federal risk insurance that will protect those building the first four new nuclear plants against delays that are beyond their control.
OVERBY: What started as four plants then grew to six. Risk insurance had not been considered by Vice President Dick Cheney's energy task force back in 2001, nor had it ever appeared in subsequent versions of the energy bill until this summer. Congress never held hearings on it, nor was it debated on the House of Senate floor before it was added to the final version of the bill last month. Jerry Taylor is director of natural resources studies at the free-market think thank the Cato Institute. He says the problem with nuclear power is that it just costs too much for the market to bear.
Mr. JERRY TAYLOR (Director of Natural Resources Studies, Cato Institute): When you hear Republicans talk about the glories of nuclear power, you might as well hear the Democratic left talking about the glories of solar power. They're the identical speeches, and neither speech talks about price. Will this bill throw enough subsidies at the industry to create a Potemkin village market, kind of like we've created for ethanol?
OVERBY: Taylor says he hopes not. But it would be a mistake to underestimate the political clout of the nuclear industry, an industry that was created by the federal government and, in good times and bad, has never fallen from favor. Peter Overby, NPR News, Washington.