The news that EDF Group still wants to pursue building a new reactor after Constellation Energy pulled out of their partnership is unwelcome news for taxpayers. Just days after Constellation canceled the project because they couldn't stomach the financial risk, EDF continues to seek to shift this risk onto U.S. taxpayers, even though better energy solutions abound. Now is the time for Maryland's leaders to launch a renewed push for a smarter and cleaner energy future.
Constellation walked away from its plans to build a new reactor at Calvert Cliffs because it was unwilling to shoulder the huge financial risk involved in building an expensive new reactor. The latest price tag for Constellation's proposed reactor was $9.6 billion, with construction lasting at least 10 years. Those estimates were probably optimistic. Similar reactors under construction in Finland and France are grossly over-budget and years behind schedule.
High and escalating costs for new nuclear reactors shouldn't come as a surprise. Of 75 nuclear reactors completed between 1966 and 1986, the average project cost more than triple its original construction budget. Later-built reactors came in as much as 1,200 percent over budget. Instead of being "too cheap to meter," as proponents once promised, nuclear power has become too expensive to pursue.
To overcome the massive cost of financing a new reactor, Constellation needed a $7.5 billion loan guarantee from the U.S. Department of Energy. When the Department of Energy required loan guarantee recipients to pay a fee to protect taxpayers from the very real risk that the project might fail, Constellation balked.
Constellation deemed this fee "unreasonably burdensome." But if covering the risk was so "unreasonably burdensome" for Constellation, why would it be any less so for the taxpayer?
Now EDF, with the encouragement of Gov. Martin O'Malley and other state leaders, is trying to revive the deal, wither by buying Constellation out of their joint venture or by taking over all the development costs before construction begins. But Maryland has many better options to provide a reliable supply of electricity — options that are much less expensive and risky than a new nuclear reactor.
Energy efficiency should top everyone's list. Investing in energy efficiency actually pays customers back with ongoing savings on electricity bills. Efficiency programs also put people to work, creating jobs insulating homes, installing modern lighting systems and appliances, manufacturing energy-saving equipment, and many other valuable tasks.
Every Maryland electricity consumer pays a small fee to fund energy efficiency programs in the state. Ratepayers who take advantage of these programs see double to quadruple returns on their investment. And all consumers benefit from a less congested grid and avoided cost of new transmission lines or power plants.
Recognizing the value of energy efficiency, Maryland's leaders have enacted one of the strongest efficiency targets in the country. If we meet this efficiency goal, we would more than exceed the energy creation potential of a new reactor at Calvert Cliffs — while saving Marylanders $1.4 billion on their energy bills by 2020. Unfortunately, the state's utilities have made only modest progress toward this goal. Marylanders would be well-served if Governor O'Malley and the Public Service Commission redoubled their efforts to help Maryland businesses, homeowners and renters use energy more wisely.
We also need to make smart investments in clean sources of energy like wind and solar. Offshore wind and solar power are both cheaper than the estimated cost of power from a new nuclear reactor, and make much safer investments.
Moreover, private companies are stepping up to support this clean energy vision. For example, NRG Bluewater Wind is working to build offshore wind farms from New York to Maryland. Google recently announced plans to finance an underwater power line for offshore wind turbines in the Mid-Atlantic. This project, to be built by a Maryland-based company, will bring power to 1.9 million homes for half the cost of an additional nuclear reactor. Solar companies are also flocking to the Mid-Atlantic, but Maryland needs do more to support in-state development. New Jersey, which has strong policies supporting the development of a solar-powered economy, has become the 2nd largest solar power producer in the country.
The collapse of plans for a new reactor at Calvert Cliffs would open the door for Maryland to capitalize on real energy solutions. Rather than trying to save the deal, we hope Governor O'Malley and members of the Public Service Commission move forward a proactive agenda to meet the state's energy efficiency and clean energy goals.
Johanna Neumann is the state director of the Maryland Public Interest Research Group. Her e-mail is johanna@marylandpirg.org.