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Obama’s Tax Plan Raises Price of Nuclear Energy

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Unread 09.22.11, 02:24 PM
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Obama’s Tax Plan Raises Price of Nuclear Energy

On 09.22.11 11:00 AM posted by Jack Spencer


Buried deep within the President’s tax plan is a proposal to “reauthorize the special assessment from domestic nuclear utilities.”

Translation: The President wants to place an additional tax on nuclear utilities that will result in higher energy prices for consumers.

The United States gets 20 percent of its electricity from nuclear power. So what the President characterizes as a $2 billion “savings” over 10 years is really a $200 million annual price increase for the millions of American consumers who rely on nuclear energy.

The money would be placed into a special fund that was created in 1992 to pay for the decontamination and decommissioning of the Department of Energy’s old uranium enrichment sites in Ohio, Kentucky, and Tennessee. Although these plants were built in the 1940s and 1950s to support national security activities, they were also used later to provide enriched uranium for commercial purposes. Thus, collecting a fee from nuclear utilities to help pay for cleanup costs seems to make sense.

The problem is that these fees have already been paid—TWICE!

The first payment came when utilities purchased enrichment services from the U.S. government to begin with. A portion of the price included decontamination and decommissioning costs. But Washington decided that was not adequate, so it charged the utilities again as part of the Energy Policy Act of 1992. The 1992 act required that each utility be assessed a fee based on the services it received from government-owned enrichment facilities. Consumers paid more than $2.6 billion in additional costs as a result of the 1992 act. That program ended in 2007, and now President Obama wants to charge consumers a third time.

The Obama Administration seems to think that the provision of commercial services from these government-owned facilities somehow results in an endless private-sector liability for cleanup costs. It ignores the fact that these facilities were built and owned by the federal government to meet critical national security requirements, not to meet commercial needs.

Indeed, they have no utility as commercial entities, which is why the Ohio and Tennessee facilities are already shut down, with the Kentucky one ready to go. The private sector is fully capable of providing commercial enrichment services far more efficiently than the government ever could. There is already one enrichment plant on line in New Mexico with plants in Idaho, Ohio, and North Carolina planned. And just as owners of each of these plants must be responsible for decommissioning, so must the U.S. government be for its old plants.

Charging nuclear energy consumers a fee for something they have already paid for twice is patently unfair. And portraying outstanding cleanup costs as the responsibility of the nuclear industry is disingenuous.

When it comes to charging America’s electricity consumers for a government mess, the third time is not a charm.



http://blog.heritage.org/2011/09/22/...uclear-energy/
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