The Department of Energy report on subsidies to nuclear power was not released publicly by DOE's office of consumer affairs, nor by its author, as reported in Dec. 26 editions.
Nuclear power has received almost $40 billion in federal subsidies the past 30 years and would otherwise be twice as costly and unable to compete even with oil-fired electricity, according to an unpublished Department of Energy Study.
The 75-page report from the Energy Information Administration's Office of Economic Analysis said nuclear power has benefited since its birth from federal aid in five major areas: $23.6 billion for research and development, $237.4 million to promote foreign reactor sales, $2.5 billion for uranium market promotion, $7.1 billion in fuel enrichment pricing aid and $6.5 billion for management of wastes, mining spoils cleanup and unpaid decommissioning costs. The total is $39.9 billion in constant 1979 dollars.
The study, written by former EIA economist Joseph Bowring, said that if the subsidies had been borne by private industry, nuclear power that DOE says now costs 2.2 cents per kilowatt hour (kwh) when it leaves the plant would cost an additional 1.6 to 2.5 cents, or up to 4.7 cents per kwh, more than twice as much.
Oil-fired electricity, by far the most expensive power, now costs about 3.75 cents per kwh, other DOE offices have figured. Nuclear power has always cost slightly less than coal power, which is now at about 2.25 cents per kwh at the plant gate.Transmission charges add about 40 percent to all three kinds of electricity, and the national average price to the consumer is now about 4.5 cents per kwh.
The study was prepared at the request of the House subcommittee on energy and power and completed last March. Bowring, who was then an economist in EIA's financial and industry analysis division, made the report public last week. It has never been sent to the House subcommittee but was released through DOE's Office of Consumer Affairs.
David McNichol, Bowring's former boss and director of DOE's Office of Economic Analysis, said complex review procedures and a heavy load of other projects had delayed issuance of the report, although the delay "is not a record." It will be submitted to Congress when the review is completed, he said.
Tom Kuhn of the American Nuclear Energy Council, the industry's lobbying arm, criticized the study for including as a subsidy some military research funding he said had no link to commercial industry. He questioned inclusion of fuel enrichment prices as a subsidy, arguing the government recovers all its costs in the process. Coal and oil power also receive some subsidies, too, he said: "It's not a one-to-one comparison."
The study does not consider tax arrangements, which some nuclear power critics contend are a major benefit to the industry, nor does it deal with the insurance premium benefits of the Price-Anderson Act of 1956 which set a $560 million limit on total industry and government liability for property damages in a nuclear power plant accident.
It traces development of the commercial nuclear power industry from the beginning of the U.S. Navy nuclear submarine program in 1948, counting as a subsidy all research and development funding until 1955 and 50 percent of all R&D money after that until 1962. This, Bowring said, was because light-water reactor technology was first tested in the submarines, then on U.S. aircraft carriers and finally at the first pilot commercial plant at Shippingport, Pa., in 1962.
In early pilot plants, "private investors' risks were limited to their investment in the site and the conventional portion of the generating plant," the study said. In 1962 reactor manufacturers began to offer "turn-key" complete power plant packages to utilities.
Bowring counted all Nuclear Regulatory Commission spending as an industry subsidy because its job is to police the safety of nuclear power and "the alternative is that society absorbs some of the health and safety costs without trying to mitigate them."
Encouragement to foreign reactor sales included loans, grants, international training, conferences, the Atoms' for Peace program, a third of the International Atomic Energy Agency annual budget and assorted loan guarantees that helped "to increase foreign demand for U.S. reactor technology," the report said.
Uranium miners were guaranteed ore prices, given bonuses for discoveries, helped by U.S. helicopter search teams and drilling surveys and protected by an 11-year ban on uranium imports, from 1964 to 1975, the study said. The government then enriched the ore to fuel-grade quality, charging utilities a price for it that did not include many things a private enricher would have had to charge for: profit, taxes, insurance, interest, depreciation and eventual decommissioning.
Finally, the government paid for cleaning up uranium mill wastes and has paid for all the research on spent fuel waste disposal, which would otherwise be a corporate responsibility, the study said.
"The result has been that current production of electricity from nuclear power stations is substantially larger than it would have been in the absence of such subsidies," the study said.