By HARVEY WASSERMAN
Maryland's Calvert Cliffs nuke project is on the brink of cancellation. It's potentially one of the most critical atomic failures in decades.
But financial markets love the nuke's demise. The stock of its American partner - Constellation Energy - has soared with the apparent death of a project widely feared as a huge money-loser.
Just 40 miles south of the White House, George W. Bush hailed Calvert Cliffs in 2005 as the shining symbol of a "reactor renaissance." In partnership with EDF, the French national utility, Constellation jumped high in the line for a share of the $18.5 billion Bush earmarked for federal loan guarantees to finance new reactors
Bush wanted at least $50 billion more in guarantees, but was beaten back then, in 2007 and afterwards by a series of national grassroots campaigns.
Constellation Energy says it's still "in negotiations" with the Energy Department for $7.6 billion in guarantees. But financial reports indicate the project is all but dead.
Because atomic power can't meet construction schedules and can't compete in an open energy market with either natural gas or renewables.
Ironically, the nuclear industry set up the failure. A decade ago it fought to deregulate electric markets. In about two dozen states - including Maryland - it forced ratepayers to eat some $100 billion in "stranded" reactor costs in preparation for "free competition."
The costs came from the long delays and expensive overruns that defined the first generation of atomic power plants. Now any new reactor in those states must produce electricity cheap enough to compete in a deregulated market.
Constellation's cancellation says even loan guarantees can't make nukes competitive.
In tandem with the Office of Management and Budget, the Department of Energy wants a mere $880 million in up-front fees - about 12 percent of taxpayer's liability - extremely favorable terms when compared to the usual 20 percent for a home loan.
DOE has offered to waive even that if Constellation will agree to buy just 75% of the energy from the plant it wants to build.
That Constellation would not sign a power purchase agreement for its own reactor is a stunning admission that atomic energy cannot compete with natural gas or renewables.
That it can't accept financial penalties for coming in late is a bow to nuke power's long history of hugely expensive delays. Even now chaotic construction fiascos in Finland and Flamanville, France, have caused "trepidation" by the reactor industry as a whole, according to Paul L. Joskow of the Massachusetts Institute of Technology.
Constellation's complaint that the feds' loan structure would doom "the economics of any nuclear project" could be a stunning obituary for a technology once advertised as "too cheap to meter."
Mainstream wisdom says Constellation wants to kill an obvious atomic turkey before it's consumed by soaring costs and an inability to compete. The solar panels slated for the White House roof this spring will deliver usable power far cheaper and many years before the new reactors could ever open.
EDF says it is "extremely disappointed and shocked to learn that Constellation has unilaterally decided to withdraw from the Calvert Cliffs 3 project." A DOE spokesperson expressed surprise.
Constellation says EDF could build Calvert Cliffs on its own. But federal law demands it have an American partner. The two utilities may soon be at each other in court over a wide range of issues. Similar gyrations have struck two very contentious proposed reactors in Texas, which may or may not have potential Japanese backing.
A double-reactor project at Vogtle, Georgia has received $8.33 billion in loan guarantees from the Obama administration.
But Peach State ratepayers are being forced to pay for a non-competitive project in advance. They've already suffered a $100 million rate hike, and face $1 billion more - and that's just for starters on a project barely underway. It's a bad omen for new reactors even in such regulated states.
However it plays out, Constellation has dealt a body blow to the nuclear renaissance. According to the New York Times, Bush's 2005 visit to Calvert Cliffs was the first by any president to a US reactor site in 30 years (except for Jimmy Carter's harried trip to the control room of Three Mile Island during its 1979 melt-down).
Pro-nuclear members of Congress may gather in December to demand more money and laxer terms for loan guarantees.
But the apparent death of Calvert Cliffs has no upside for an industry on the brink.
"This is a great day for Maryland," says Michael Mariotte of the Nuclear Information & Resource Service, and for a "nuclear-free and carbon-free energy future."