Call it a preemptive bailout if you like, my Friends…
…but the Department of Energy recently issued a press release stating that they have received 19 applications for federal loan guarantees to build 14 nuclear power plants. The price tag: $122 billion.
I know after the $700 billion bailout package, on top of $100+ billion just for AIG, $122 billion for nukes doesn’t sound that impressive. But it is a little scary when you realize that the feds only appropriated $18.5 billion for loan guarantees. Now children, don’t push in line!
The DoE estimated the total cost to construct the 21 proposed reactors at $188 billion, which they say averages out to around $9 billion per reactor.
Taxpayer-backed loan guarantees would total $5.8 billion per reactor based on DoE’s numbers. That’s a hard pill to swallow for an industry with a notorious history of default. From Bloomberg:
Taxpayers are on the hook only if borrowers default. A 2003 Congressional Budget Office report said the default rate on nuclear construction debts might be as high as 50 percent, in part because of the projects’ high costs.