February/March 1982 RAIN Page 5 by Fred Heutte On January 22,1982, two large nuclear projects in Washington State were cancelled (“terminated," in the bloodless jargon of the electric power industry) by WPPSS, the Washington Public Power Supply System, which actually consists of over 100 publicly-owned utilities in Washington, Oregon, northern California, Idaho and Montana. These plants have long been considered the bellweather of nuclear power's future, and were involved in years of behind-the- scenes struggle that ended in cancellation. But curiously, no environmental or anti-nuclear group ever mounted a legal challenge to these plants. They were dragged down solely by the ominous, inevitable financial burden that underlies every nuclear plant. And the bell is now ringing for the decline and eventual disappearance of nuclear power. Like all technologies, environmental, economic and social costs of energy production increase according to the distance from human scale. In other words, we need to pay attention to the scale of economies, not just the economies of scale. It's no surprise that subatomic energy release—the smallest of physical interactions—requires the containment and regulation of the largest and most complex machine, a nuclear power plant. The social commitment needed to assemble the vast resources for a nuclear plant requires a corresponding mass mystical belief in the necessity of the concept. Few true believers in our society can match the fervor of the nuclear advocate. On a broader level, the organization of a vast, money-based economy requires a similar sort of devotion, especially at its switches. And at the center sits the bond market, a mechanism for allocating capital to direct the future development of society. When the bond dealers and the nuclear managers get together, the results are spectacular and disastrous. Bonds are basically fixed-interest loans, like a car or home loan but several magnitudes larger. Interest rates are fixed by a consummately rational, quantified process balancing risk (as judged by the ardently pro-nuclear rating agencies, Moody's and Standard & Poor) and yield. The riskier the investment, theoretically, the greater the yield. But with nuclear power, the bond market has lived for ten years with a suspension of rational judgement, since all their information has come from the nuclear managers themselves. And here, on the Wall Street municipal bond market, the energy and economic imperatives of megacorporate civilization meet their absurd, devastating conclusion. WPPSS has already borrowed $2.25 billion for plants 4 and 5, and another $7 billion for plants 1, 2 and 3 begun earlier in the 1970s, making it the largest municipal debtor in the nation. Yet this total—nearly $10 billion—is less than half of the current total cost for the five reactors of $24 billion. The plants were originally estimated to cost "only" $4.1 billion just six years ago. As with car and home loans, the basic principle for bond loans is the same: the biggest bite comes from interest payments. The total repayment obligation of WPP55 (principal plus interest) for plants 4 and 5 is $9 billion, and for plants 1, 2 and 3—still under lull construction—nearly $25 billion. Over $35 billion will flow out of the Pacific Northwest in the next 30 years, a consequence of the folly of equating energy production and economic growth. This amounts to about six months of current Gross Regional Product. These tremendous increases have been caused by perfectly obvious problems which affect all nuclear construction projects, much less five simultaneous ones: delays, cost overruns, labor disputes, NRC regulation changes and, most importantly, WPP55 mismanagement. Yet, through the tricks of the rarefied world of high finance, the ratepayers in the region have been sheltered from the real cost of the plants. Instead of paying the interest due on the delayed plants through electric rate increases, WPPSS simply borrowed more money! Half of recent bond issues have been devoted to interest payments rather than construction costs, further jacking up the long-term regional hemorrhage of capital. And still none of the five plants may ever produce a single kilowatt-hour of power. The bonds will be paid back, though, "come hell or high water." This is a technical phrase used on Wall Street to illustrate that the lenders—corporate capitalists who use these tax-free bonds to shelter their other income—hold long-term bonds in great reverence. In effect, they are the most secure contracts in our legal/financial system. No matter who runs the Northwest's electric utilities, the rates will be raised and the bonds repaid. A default on these bonds would wreck the bond market, the central clock of the American economy. But the outflow of $1 billion annually from the Northwest, even if it can be sustained fiscally, is a grave blow to an economy already sickened by the collapse of the timber industry. The only way to underwrite the economy of the region, the only way to maintain jobs, the only way to assure adequate and affordable energy, and incidentally the only way to repay the WPPSS bonds, is to embark on a crash program of energy conservation and renewable energy development. Fortunately, we will always have power, since most of our electricity is already renewable, derived from the famed Columbia River hydrosystem which includes the Bonneville, Grand Coulee and two dozen other dams (of course, at again another cost, the life of the river). And the energy conservation industry in the Northwest is employing as many people today as WPPSS did at its height, while delivering conservation and safe energy now, at lower cost and minimal environmental damage. No one talks about acre-wide solar flat plate collectors, because these approaches work best at or near human scale. Consequently, the prospects are good for enhancement of an energy-efficient, distributive economy. If we succeed, the cost of WPPSS in our electric rates will be a constant pocketbook reminder of the road almost taken. The alternative is permanent regional depression. The decision is in the hands of the bond dealers now, and it's in their best interest to lend us long-term, cheap capital—Energy Savings Bonds if you will—to save us from the economic destruction caused by nuclear power. □□ Fred Heutte is statewide coordinator of the Solar Oregon Lobby (SOL) and Executive Director of Oregon Solar Energy Industries Association (OSEIA).
RkJQdWJsaXNoZXIy NTc4NTAz