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FoE Chastises NEI on Taxpayer-Funded Loan Guarantees

Posted Oct. 28, 2008 / Posted by: admin

For Immediate Release

For more information contact:
Nick Berning, 202-222-0748

WASHINGTON -- In response to the Nuclear Energy Institute's misleading claims about provisions in pending energy legislation that would put taxpayers at risk for billions of dollars in loan guarantees to the nuclear industry, Erich Pica, Economic Policy Analyst at Friends of the Earth, today sent a letter to Richard Myers, NEI's Vice President of Policy Development, to set the record straight.

"You obviously have a blind spot when it comes to evaluating legislation that affects your industry, caused perhaps by being over-exposed to so much high-level radioactive spin," wrote Pica.

Myers in an NEI blog post on October 25 made the claim that loan guarantees weren't subsidies. In his letter, Pica argued:

 

Simply put, a taxpayer subsidy is anything that bolsters or advances a favored program, industry or technology. There are farm subsidies; there are subsidies to Fannie Mae and Freddie Mac providing them with access to cheaper financing than the private sector to name just two. And there are subsidies -- more so than to any other energy sector -- to nuclear power. The Price Anderson Act is a life and death subsidy that provides insurance in the case of a large nuclear disaster. So too are loan guarantees. In fact, without a loan guaranteed by U.S. taxpayers, Constellation Energy is on record saying they won't build a new reactor. In these cases, U.S. taxpayers are stepping in to subsidize a nuclear industry incapable of competing on its own in the marketplace.

"Myers conveniently avoided any discussion of the provision slipped into the energy bill that would prevent congressional appropriations committees from approving annual appropriations for energy loan guarantees -- something even the White House opposes," said Pica.

"It is the height of hypocrisy for the NEI to talk about loan guarantees and procedures for calculating the cost of loan guarantees by the Office of Management and Budget when their champion, Senator Pete Domenici (R-NM) held former Congressman Jim Nussle hostage to force OMB to weaken its financial requirements for loan guarantees," added Pica.

The complete text of Pica's letter to Myers is available at http://www.FOE.org/pdf/Myers_Letter.pdf.

 

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