Influence Your Representative and Senator – Ask Them to Support the Clean Energy Deployment Administration
This is an important week for the economic future of the United States as representatives and senators and their staffs work to refine companion bills that will establish a stable financing mechanism for the kinds of long term, high quality projects that often have difficulty gaining support in the “get rich quick” Wall Street arena. I am pretty sure that you have read and heard a great deal about how nuclear power is not competitive in the energy markets. The people who make those statements come from diverse backgrounds, but they all point to the fact that private investors are not racing to provide the financing needed.
What you probably have not heard much about is how steadily the organizations that oppose nuclear power for competitive or emotional reasons have worked to establish a set of rules and barriers to entry that make atomic investment as unattractive as possible when compared to the other ways to bet on the fact that humans will need energy supplies in the future. (That is a pretty safe bet, but it is possible to tilt the table enough to make it unprofitable even when it comes true.)
There is little doubt that the opposition has been helped a bit by some of the inherent characteristics of nuclear power. For a variety of good reasons, nuclear projects do not happen quickly, they require careful planning, complete analysis, excellent quality control and multiple layers of second and third checks for accuracy at all steps of the process. Slow projects have a financial disadvantage; they lead to larger costs for salaries and for financing during the period before revenue generation begins. Impatient investors often chafe at the time involved and the requirements for skilled workers trained to pay attention to detail. In a world that rewards speed over accuracy and appearance over substance, nuclear power is often a wall flower.
However, the same patient care that makes nuclear power plants safe and clean also makes them reliable and long lasting. When the projects are completed and operated by competent people, the payoffs come every time someone flips a switch to on – just look at the cash flow statements of the companies that own the currently operating plants.
While no one can guarantee the future, some are better at predictions than others. One way to tell the difference is to examine track records. If you have been around a while or you like to dig through historical documents you might want to recall just how many of the current leaders of the opposition to nuclear power told us how expensive those plants were to build and then worked to delay the projects to make them as expensive as possible.
The opposition even succeeded in getting completed plants to shut down early, which prevented the opportunity to earn a return on the investment. Those actions destroyed some very productive clean energy sources that have a low marginal cost of operation and enabled a lot of profits on the part of the companies that sold the fuel for the replacement power plants. However, the still operating units are commonly referred to as “cash cows” that some claim deserve some kind of windfall profits tax. In other words – just think how profitable they would have been if there had been steady support rather than constant sniping.
There is a bipartisan group of Senators and Representatives who recognize the challenge and have proposed some good legislation to set up a self-financing agency whose mission will be to provide government co-signatures to well vetted projects with good chances for long term success. Those co-signatures and vetting processes should reduce the risk to a level low enough to allow financial investors that have a longer time horizon – pension and mutual funds, for example, to understand the risk and the revenue opportunities well enough to provide the patient capital that such high quality, long term projects require.
There is a LOT of work that needs to be done to build a significant number of plants. (Let me translate that for you – establishing a bank that enables a large number of new project starts will produce a LOT of JOBS.)
I wrote a long post with a lot of the specific language details a couple of days ago, but the important message to your representatives and senators is that you support the establishment of the Clean Energy Deployment Administration along the lines suggested by Senator Murkowski and Senator Bingaman in the Senate and Representative Jay Inslee (D-WA) in the House of Representatives.