Money Matters in Reactor Project Debate

Financing, Rather Than Safety, Appears to Be Key Factor in Whether Plans Proceed

It's not the greenies who worry those aiming to build a new nuclear reactor in Southern Maryland. It's the green.

This seemed perfectly clear at a recent community meeting in Calvert County, where Constellation Energy has proposed the first new reactor project in the United States in nearly 30 years. The price tag: about $4.5 billion.

"Without the federal loan guarantees, this whole thing will come to a stop," George Vanderheyden, a Constellation executive, said while standing outside the hotel conference room where the meeting was about to start.

Ten feet from him, a row of environmentalists greeted Calvert residents with stacks of brochures. "Threatened Communities," from Greenpeace, showed rows of grave markers next to a nuclear cooling tower.

Vanderheyden showed little concern and later said his company could dispel such notions during the long approval process for the reactor.

What concerns him more -- and what appears to be the larger factor in whether the Calvert reactor gets built -- is taking place 55 miles away in Washington. There, nuclear companies such as Constellation, along with Wall Street bankers, are lobbying hard to get the federal government to help kick-start construction of a series of reactors.

Their argument: Nuclear power is clean energy that can reduce greenhouse gases. Wall Street investors could help finance new reactors. But they're skittish, remembering nuclear projects in the 1970s and 1980s dogged by regulatory delays, cost overruns and the Three Mile Island meltdown. The government, according to the nuclear industry, should protect investors if the initial projects go bad.

To nuclear's critics, the industry is trying to seize a limited government program -- energy loan guarantees -- and expand it to cover and lessen the costs of a series of massively expensive projects. It is the latest plea, they say, by an industry mature enough to try to sell projects on its own.

"This is among the most subsidized industries in the nation," said Ryan Alexander, president of Taxpayers for Common Sense, a budget watchdog group. "They're looking to get as much as they can in this political climate."

Calvert's political leaders, and many of its residents, want the new reactor. Residents have lived for three decades near two reactors at the Calvert Cliffs nuclear plant in Lusby, where the reactor would be built. That plant enjoys a reputation for safety and pays taxes representing 8 percent of the county government's operating revenue. Calvert's Board of County Commissioners has offered Constellation 15 years of tax breaks valued at $300 million to build another reactor.

President Bush chose Calvert's plant as the stage to deliver an energy policy speech two years ago.

"Some Americans remember the problems of the nuclear plants -- that the nuclear plants had back in the 1970s," Bush said. "We all remember those days. That frightened a lot of folks. People have got to understand that advances in sciences and engineering and plant design have made nuclear plants far safer, far safer than ever before."