The U.S. House of Representatives Ways and Means Committee has approved legislation that would extend a tax credit for the construction of new nuclear power plants. The combined tax credits for nuclear power, coal, oil, and natural gas are less than the tax credits handed out to wind and solar power.
The environmental left and its allies in Congress immediately criticized extending the nuclear power tax credit, even though Congress recently extended much larger tax credits for wind and solar.
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“With ample natural gas and a growing renewable energy industry, nuclear often does not make economic sense unless it gets some special treatment and subsidies or public handouts,” Rep. Lloyd Doggett (D-TX) told the Washington Times.
According to the left-of-center Brookings Institution, wind and solar power are significantly more expensive than conventional power, including nuclear power. Brookings reports that wind power is 50 percent more expensive than conventional power and solar power is triple the cost of conventional power.
Existing legislation provides for tax incentives for nuclear power plants that become operational by 2020. However, not enough nuclear power plants will be built in this short time frame to take advantage of the money allocated under the existing legislation. The bill passed by the House Ways and Means Committee would keep the allocated funds available after 2020.
Free marketers would prefer energy markets without subsidies. Katie Tubb at the Heritage Foundation argues “the bill is open-ended and would keep subsidies available until expended. It would also make them transferrable to other parties contributing to their construction, including federal, state, and local government entities. That is nothing more than a Band-Aid.”
Tubb’s zeal for subsidy-free energy policy is admirable. However, if government is going to hand out tax credits to the wind and solar industries, fair play dictates the same tax credits should be available to other energy sources as well. Otherwise, the far left gets to keep subsidies for the most expensive and unreliable forms of power production (wind and solar) while conservatives and free-marketers fight to oppose leveling the playing field on behalf of energy sources that make more economic sense. Government preferences on behalf of wind and solar alone are worse for consumers and economic freedom than government policies that bestow favors equally for all competitors.
Friends of the Earth called the bill a bailout for the nuclear power industry.
“The nuclear industry is incapable of building new reactors within budget or on time,” Ben Schreiber, director of the climate and energy program at Friends of the Earth, said in a press statement. Schreiber neglected to mention that wind and solar power are even less capable of building new equipment and facilities without government favoritism.
“With catastrophic climate change staring us in the face, it is clear that continued efforts to save the nuclear industry are nothing less than a financial and technical distraction,” Schreiber added, failing to mention that nuclear power produces more emissions-free power than wind and solar power combined.
The Trump administration released a press statement supporting the Ways and Means Committee advancing the proposed legislation.
“The Administration supports H.R. 1551, to modify the production tax credit for advanced nuclear power facilities,” the press release stated. “The bill would fulfill the President’s commitment to the continuation of nuclear energy as a major contributor to our Nation’s energy production and security. Nuclear power is critical to the reliability, security, and diversity of our national energy mix.”