Call the White House at:
202-456-1414 or 202-456-1111

Fax them at: 202-456-2461

Tell them NO to more corporate welfare for the nuclear industry.
You might ask them why they're so lenient with welfare for the rich
and cozy up to corporate crime while loving the death penalty
for average citizens that aren't rich.

Nuke Plant Tax Break Criticized


WASHINGTON (AP) -- The Bush administration wants to change the tax code to make sure all owners of nuclear power plants can write off the cost of decommissioning.

Utilities that have rates set by government agencies already can deduct the money they must set aside in special funds for decommissioning, typically hundreds of millions of dollars. The tax break is not automatically transferred, however, when a plant is bought by a company without regulated rates.

In those cases, the Internal Revenue Service must approve a tax break. The IRS has done that routinely since a flurry of nuclear plant sales began two years ago. Even so, opponents who don't want to see the tax break written into law contend it will do nothing but guarantee more revenue for plant owners.

``This won't produce a single more megawatt of electricity to meet summer reliability needs,'' said Howard Learner of the Chicago-based Environmental Law and Policy Center. ``All it will do is transfer hundreds of millions of dollars from consumers' wallets to nuclear plant owners'.''

Supporters say it makes no sense for a tax break already in place for a plant not to be automatically transferred to a new owner.

``There's absolutely no reason for any distinction to be made here,'' said David Brown, lobbyist for Chicago-based Exelon Corp., the largest private nuclear operator in the United States.

The issue is growing in importance because more nuclear power plants are likely to be sold as electricity is increasingly deregulated across the country. New Orleans-based Entergy Corp., for example, has said it plans to spend up to $1.5 billion to acquire as many as a dozen plants in the next five years.

Like private companies, most ``public'' utilities are owned by investors. The difference is they are obligated to provide power to everyone in their service areas. In exchange for their monopoly status, their rates and earnings are regulated by states.

The tax break was vetoed in 1999 by President Clinton but was revived by the Bush administration and approved last week as part of the House energy bill. It faces an uncertain future in the Senate, which will consider its own energy package this fall.

Now, when nuclear power plants are sold from rate-regulated to nonregulated owners, the decommissioning money doesn't retain the ``qualified'' tax status and thus are no longer tax deductible.

The new owners still are required by the Nuclear Regulatory Commission to maintain the funds to ensure that money is on hand to close and clean the plants safely after they stop generating power.

Electric companies, which contributed more than $18.5 million to Democratic and Republican candidates and parties in the 1999-2000 election cycle, say it's a case of tax law not keeping up with changes in the electricity marketplace.

Since Entergy bought the Pilgrim Nuclear Power Station in Plymouth, Mass., from Boston Edison Co. in July 1999, eight nuclear reactors have been sold from rate-regulated to nonregulated owners.

The biggest deal was closed four months ago, when Richmond, Va.-based Dominion Resources Inc. bought the Millstone nuclear power complex in Waterford, Conn., for $1.3 billion.

A change in the law, said Ron Clements, a power industry lobbyist, would help facilitate deals that might otherwise fall through, keeping nuclear plants online to churn out much-needed electricity for homes and businesses.

In cases where deals go through anyway, customers will end up paying more for power, he said.

``Rates will go up,'' said Clements, of the Edison Electric Institute, the main trade association of private power companies.

Critics say it's wrong to give a tax break to corporations that want to maximize their profits and thus could bear the costs of decommissioning.

``Fair is fair,'' Learner said. ``It's part of the cost of doing business.''

The congressional Joint Committee on Taxation has estimated that the change, and other tax changes related to nuclear decommissioning, would cost the federal government $1.93 billion in revenue from 2002-2011.

On the Net: Nuclear Regulatory Commission:

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