Providing for the common good is one of them
In the arguments against nuclear energy, critics have taken aim at the debt ceiling of the Tennessee Valley Authority (TVA) and the federal loan guarantee program for support investments in new nuclear power plants. These critics seem to have forgotten something very important. There are some jobs the government must do, and one of the most important is to take on the very large tasks that cannot and do not belong in the realm of the so-called "free market."
The promise of Franklin Roosevelt's New Deal included a commitment to raise a region out of poverty. It was premised on the belief that it is the role of the federal government to provide for the common good by bringing the benefits of affordable electricity to every household, business, and community without regard to fear or favor. The role of government is to preserve the quilt of bonds that tie a society together.
"Freedom from want--which, translated into universal terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants" Franklin Roosevelt, message to Congress, January 6, 1941.In this case the issue is to prevent the economic consequences of global warming from undoing our civilization. Building more coal fired power plants, instead of nuclear, is not an answer. It does not provide for the common good.
Bumping up against TVA's debt ceiling
Some people don't get it, and have their own agendas. Two former TVA chairmen, S. David Freeman (right) and Craven Crowell are on a press tour of TVA's service area wringing their hands about the utility's debt ceiling. Both men are critics of TVA's plans to trade out older coal-fired power plants, and their greenhouse gases, for new nuclear plants including Watts Bar and Bellefonte.
In fact, what both men want to do is to throttle the nuclear renaissance as it is being born by using a string of promises they made about TVA's debt nearly three decades ago. These two see the debt ceiling issue as a way to drive a zero sum wedge between the utility and the congressional delegations in the multi-state region served by the utility. In fact they are apologists for investors who say they support wind and solar energy projects. However, what you get when you stop new nuclear power plants is more coal plants.
Solar and wind cannot provide 15,000 MW of electric power 24 x 7 365 days a year. Renewable sources are peak power only. It is coal which can provide baseload power that has a vested interest in its existing infrastructure including current mines. TVA's nuclear plans are up against more than an argument about its debt ceiling. The battle is on over the future path of investment in energy generation and fuels sources in a multi-state region brimming with coal mines. An argument against an increase in debt ceiling is an argument for displacing TVA's new nuclear power plants with private sector coal-fired plants. What you get are Freeman and Crowell wearing hats for coal even if they don't intend it.
Nukes are expensive to build
The costs of new nuclear power plants are high. Watts Bar will cost $2.5 billion. TVA is evaluating several options for Bellefonte including building two new Westinghouse AP1000 units at $4.5 billion each and / or finishing two partially complete units for a price tag of about $3.6 billion. In May 2007 TVA reopened Browns Ferry for a price tag of $1.8 billion.
TVA receives no federal funding and hasn't for more than a decade. TVA's current debt is about $25 billion and is bumping up against a $30 billion ceiling. The debt is guaranteed by the revenue from the sale of electricity from its power plants. In its strategic plan the giant utility says it is retiring debt and setting a limit to how much it will carry relative to the value of existing assets.
The current TVA chairman is Bill Sansom, and he told the Tennessean newspaper on Sept 18, "if you are running a company that is continuing to grow, that changes the way you look at that $30 billion cap. If you are growing, it doesn't mean your debt shouldn't grow relative to your worth."
TVA President Tom Kilgore told the Chattanooga Free Press on Sept 16 that, "as we grow the debt cap will be a problem."
Sansom points out that while nuclear power plants are indeed expensive to build, they operate at lower costs compared to fossil plants.
Congress must address the debt ceiling
The Tennessee congressional delegation wants to see a long-term plan for the utility. Sen. Lamar Alexander told the Free Press he thinks the TVA board is doing a good job, but right now he is cautious about raising the debt ceiling. Rep. Jim Cooper pointed out that TVA's legacy of debt from the 1980s is higher relative to revenues than commercial utilities. His comment ignores the fact that TVA isn't a commercial operation and, as a quasi-government agency, is intended to provide for the common good apart from the profit motive.
“The nuclear construction program is basically new partnerships with other utilities to build more nuclear capacity in the southeast United States, and TVA is basically the home base for some of these plants. This debt is going to be shared and is going to be paid for in the most efficient and effective return of any of the power generating assets in the country. That’s a good business model.”
What happens at TVA with its debt ceiling is a bellwether for the nuclear industry in the U.S. It will be a signal how Congress will deal with the loan guarantee program for new nuclear power plants. Note that TVA does not participate in that program.
TVA will have to show Congress, which just completed a $700 billion bail out of Wall Street, that it can support an increase to TVA's debt ceiling because it makes sense for the region and for the country. This isn't a "bail out" because TVA makes money every day.
The government has a mission to provide for the common good, and that includes retiring old, fossil fuel power plants by building new nuclear plants to address the very real threat of global warming. That's a "good business model" as Rep. Wamp would say.
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