Add-On Costs

One contention of opponents to nuclear power is that the cost of nuclear power is not complete. They argue as follows that subsidies, either from the government or future electric ratepayers, will be required.

  • Past research and development by the government has not been incorporated into the bill.

  • The cost of current research and development by the government ought to be borne by the industry.

  • Government services are provided at a loss to the taxpayer (for example, enrichment services, licensing charges, insurance, and waste disposal, when available).

  • Costs of decommissioning nuclear power plants ought to be added into the bill.

While CONAES has not investigated these items in great detail, we are of the opinion that none should, or can, be a source of large increase in the cost of nuclear power, for the following reasons.

  • It has not been the practice of the government to recover sunk research and development costs from industries that profit from the work. The rationale has been that the economic stimulus from new products yields a return to the government in general taxes. There is a certain amount of ideology involved in any contention of this nature. However, the existing practice serves the clear economic benefit of minimizing marginal costs for the benefits provided.

  • The industry is supporting most of the research and development that it considers necessary for its own continued profit. A great deal of the ongoing government research and development (such as safety research) consists of projects intended to support the general welfare. Other areas receiving large government support are justified by future general economic benefits, which are not recoverable by the industries involved. Both the LMFBR and solar power benefit from this policy.

  • We have not yet found a government “subsidy” by the accounting standards in force, Both licensing and Price-Anderson “insurance”60 seem to be charging fair fees for the services offered.* Enrichment services have been continuously scrutinized and found to be without subsidy. The price has gone up because the capital costs of plants have been allocated to the users. The government was originally the main customer for separative

*

Statement 5–21, by J.P.Holdren: I am not convinced that a fair fee is being charged for the limitation that Price-Anderson places on the total liability for an accident.



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