Nuclear Industry to Receive More Than $10 Billion in Tax Breaks and
Subsidies in Senate Energy Bill

Public Citizen Says Nuclear Power Doesn't Deserve More Taxpayer
Handouts; 50-Year-Old Industry Should Stand on Its Own

WASHINGTON, D.C. - In a new cost analysis of the Senate energy bill,
Public Citizen today said that the nuclear industry would stand to gain
more than $10.1 billion in subsidies and tax breaks, as well as
unlimited taxpayer-backed loan guarantees and other incentives.

"The government should not be promoting the construction of new
reactors, which will only add to the nuclear waste and security problems
while costing taxpayers billions," said Wenonah Hauter, director of
Public Citizen's energy program. "The nuclear industry is demanding
cradle-to-grave subsidies, and the Senate energy bill is an attempt to
give it to them."

The $10.1 billion includes $5.7 billion in production tax credits and
$4.4 billion in various subsidies, but does not include the potential
costs of loan guarantees or the Price-Anderson Act, which puts taxpayers
on the hook for potentially billions in cleanup costs in the event of a
major accident or terrorist attack on a reactor.

The production tax credits equal 1.8 cents for each kilowatt-hour of
electricity from new reactors (up to 6,000 megawatts) during the first
eight years of operation - costing $5.7 billion through 2025, according
to the Energy Information Administration. However, only $278 million
through 2016 is counted in the $18 billion in tax breaks in the bill,
because most of the nuclear credits would be claimed after 2016. This
means that the true cost of all the tax breaks, including those for
non-nuclear industries, is more than $24 billion.

Separately, the loan guarantees in the Senate bill could prove
extremely costly to taxpayers. According to the Congressional Budget
Office (CBO), the risk of loan default by industry would be very high --
"well above 50 percent" -- leaving the public to pay as much as 80
percent of the cost of building a reactor. This provision authorizes
"such sums as are necessary," but if Congress were to appropriate
funding for loan guarantees covering six nuclear reactors, this subsidy
could potentially cost taxpayers $6 billion (assuming a 50 percent
default rate and construction cost per plant of $2.5 billion, as the CBO
has estimated).

Other subsidies for the nuclear industry in the Senate energy bill
include:

* Reauthorization of the Price-Anderson Act, extending the industry's
liability cap to cover new nuclear power plants built in the next 20
years, which means in the event of an accident or attack, taxpayers
would be liable for the remainder of the cost, estimated to be $600
billion for a single serious accident (2004 dollars).

* Authorization of more than $432 million over three years for nuclear
energy research and development, including the Department of Energy's
Nuclear Power 2010 program to build new nuclear plants, and its
Generation IV program to develop new reactor designs. Half the cost of
applications for new reactors would be paid for by taxpayers, estimated
to be as much as $87 million per reactor.

* Authorization of more than $1.25 billion from FY2006 to FY2015 and
"such sums as are necessary" from FY2016 to FY2021 for a nuclear plant
in Idaho to generate hydrogen fuel. Hydrogen could be a clean fuel of
the future, but using nuclear power to produce it negates the benefits.


Existing reactors have been heavily subsidized for decades, receiving
56 percent of the federal energy supply research and development funding
between 1948 and 1998, capped insurance rates and limited liability in
the case of an accident, and billions in taxpayer bailouts in the 1980s.


"Despite a pro-nuclear push by the Bush administration and some members
of Congress, nuclear power is not an acceptable option for the future,"
said Hauter. "We have 'been there, done that' and it has been a failure.
After more than 50 years, the problems of nuclear power are far from
solved. In fact, they are more widely recognized than ever."

In March, e-mails were released indicating that government scientists
falsified data related to water infiltration and climate modeling for
the proposed Yucca Mountain waste dump site; investigations are still
ongoing. Also, recent reports by the National Academy of Sciences and
the Government Accountability Office pointed out security
vulnerabilities of the highly radioactive waste stored at reactor sites.
The energy bill contains no requirements for improving security at these
sites.

Nuclear power has made headlines this year as proponents attempt to
convince a wary public that nuclear energy can solve the global warming
problem. Last week, nearly 300 environmental and public interest
organizations sent a letter to Congress flatly rejecting nuclear energy
as an "acceptable or necessary" solution to combat rising temperatures
on the planet because it is an expensive, dangerous and polluting
technology.

"We urge the Senate to remove these unjustifiable subsidies, tax breaks
and loan guarantees from the energy bill," Hauter said. "After 50 years,
the nuclear industry should stand on its own. Instead of endless
subsidies to nuclear companies, Congress should dedicate funds to
harness the promise of energy efficiency and renewable technologies,
such as wind and solar energy."

Last month, Public Citizen released a new fact sheet series outlining
the five fatal flaws of nuclear power: cost, waste, safety, security and
proliferation (to read them, go to www.citizen.org/cmep/fatalflaws.) For
more information about the subsidies and other incentives in the Senate
energy bill, go to
http://www.citizen.org/documents/senatebillnukeprovisions.pdf. For a
copy of the statement opposing nuclear power, go to
http://www.citizen.org/documents/GroupNuclearStmt.pdf.

Yesterday, the Senate added Sen. Chuck Hagel's climate change
amendment, which authorizes additional financial assistance through
2010, including direct loans, loan guarantees, a line of credit and
production incentive payments, that could include new nuclear power
plants.

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Public Citizen is a national, nonprofit consumer advocacy organization
with 150,000 members. For more information, visit www.citizen.org

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Speak Out Against Nuclear Power in Mississippi!

This coming Tuesday, June 28, the U.S. Nuclear Regulatory Commission
(NRC) will host a public meeting in Port Gibson, Mississippi -- in
Claiborne County -- to discuss Entergy's proposal to build two new
reactors at the Grand Gulf nuclear plant along the Mississippi River.
The meeting will allow members of the public to give transcribed,
on-the-record comments about new reactors in Mississippi and their
environmental, health and safety impacts.

If possible, please attend this meeting to make your voice heard.
Visible public opposition has the power to stop this nuclear expansion.
For more information, visit http://www.citizen.org/cmep/grandgulf.

While the time allocated for each individual to give comments at the
meeting will be only several minutes, the impact will be huge. This is
the one and only public meeting to discuss the negative health, safety,
and economic consequences the new reactors will have on Port Gibson and
Mississippi. There's likely to be a substantial media presence there, so
high turnout among opponents of the project will be important.

The Grand Gulf plant is already a burden on the local population --
unjust tax laws prevent Claiborne County from recouping in taxes what
they have to pay to provide emergency services.  As a result, those
services--from the police to fire fighters to hospital -- are not up to
the appropriate standard, posing a hazard that extends beyond the county
line.  Even the NRC admits that with a new reactor, "It is not clear
whether Claiborne County would receive property taxes, sales, and use
taxes, or other taxes and public monies commensurate with the costs of
its additional emergency management and public services obligations.
The net financial burden may fall on local residents and taxpayers, most
of whom are minority and low-income persons."

As a nation, we can't afford to start down the road of nuclear power
again, after a 30-year hiatus. Nuclear power continues to rely heavily
on taxpayer subsidies because it is so expensive, and draft language in
the energy bill in the current Congress indicates billions more dollars
could be on the way. There is still no solution to the waste problem;
the proposed nuclear waste dump at Yucca Mountain is in a downward
spiral and wouldn't be large enough to hold waste from a new reactor
even if it did go forward. Safety continues to be sacrificed in favor of
higher profits by both the industry and the NRC. And security standards
at nuclear plants are downright pathetic.

Please help us put a stop to nuclear power once and for all by
attending this public meeting from 7-10 p.m. at the Port Gibson City
Hall, 1005 College Street, Port Gibson, MS. Please encourage family and
friends to attend also. If you'd like to speak at the meeting, be sure
to arrive at least 30 minutes early to register, or e-mail
GrandGulfEIS@nrc.gov.  If you are unable to attend on Tuesday or
don't wish to speak publicly, we encourage you to send written comments
by July 14 via e-mail to GrandGulfEIS@nrc.gov.

For more information about the specific problems with a new reactor at
Grand Gulf, visit http://www.citizen.org/cmep/grandgulf. You can also
direct questions to Brendan Hoffman of Public Citizen's Critical Mass
Energy and Environment Program at bhoffman@citizen.org or (202)
454-5130.