Shifting of bad debts, uneconomic facilities away from investors onto taxpayers or ratepayers.

[kristopher]

Shifting of bad debts, uneconomic facilities away from investors onto taxpayers or ratepayers.

In a competitive market, if costs of nuclear power, including debt service, rose too high, investors would lose money and plants might close. Historically, nuclear power has operated in a regulated environment. Above-market costs were shifted to ratepayers via higher power tariffs; or through plant cancellations, for which ratepayers remained liable. As markets were deregulated, these costs were packaged in other ways – ‘stranded cost’ surcharges in the United States. A ‘fossil fuel levy’ (FFL) was added to fossil plants in the United Kingdom in an effort to keep nuclear competitive. The sums were sizeable: the FFL was about 10% of all electricity bills, worth roughly £1 billion per year. Nuclear-related surcharges, write-offs, and stranded cost allocations (discussed below) were hundreds of billions of US dollars.

Efforts to recreate the regulatory conditions that protected nuclear investors twenty years ago are once again resurgent. Loan guarantees support this outcome, as do a growing number of US states that are allowing nuclear investors to collect from ratepayers while construction is still in process, and even if a plant is abandoned prior to completion. - p. 79



The World Nuclear Industry Status Report 2009 With Particular Emphasis on Economic Issues
By
Mycle Schneider
Independent Consultant, Mycle Schneider Consulting, Paris (France)
Project Coordinator
Steve Thomas
Professor for Energy Policy, Greenwich University (UK)
Antony Froggatt
Independent Consultant, London (UK)
Doug Koplow
Director of Earth Track, Cambridge (USA)

Paris, August 2009

Commissioned by
German Federal Ministry of Environment, Nature Conservation and Reactor Safety

http://www.greenpeace.org/raw/content/international/press/reports/nuclear-power-an-obstacle-to.pdf