[NukeNet] Austin American-Statesman: Last thing eager nukes need is handouts

[Diane Farsetta]

http://www.statesman.com/opinion/content/editorial/stories/ 
06/11nuclear_edit.html

EDITORIAL
Last thing eager nukes need is handouts
Monday, June 11, 2007

With the number of nuclear-powered generators set to triple in the  
next decade, Texas finds itself in a nuclear renaissance. The state's  
dramatic population growth — more than 1,000 people move here every  
day — has created a near-insatiable demand for energy that has  
nuclear power providers licking their lips. Companies like TXU Corp.,  
Exelon Corp. and NRG Energy Inc. have been planning to expand into  
Texas for years.

The eagerness of nuclear power providers to set up shop in Texas  
makes tax breaks approved by the Legislature in the recently  
concluded session downright puzzling. The Legislature made it  
possible for these companies to receive school tax breaks that could  
take a large chunk out of the state's tax revenue in coming years.

This legislation, House Bill 2994, stretches the Texas Economic  
Development Act, a 2001 state law that provided school districts with  
the ability to grant tax breaks in order to lure businesses. The law  
was intended to give school boards a say in Texas' economic  
development but has mostly resulted in questionable fiscal policy.  
Because of the law, school boards can grant tax breaks to businesses  
and then have the state make up the lost local revenue from state  
revenue.

According to Dick Lavine, a senior fiscal analyst at the Center for  
Public Policy Priorities in Austin, the total cost of projects  
resulting from the 2001 law has been $250 million a year. The state  
finances these tax breaks at the expense of other public projects.

It's questionable whether tax breaks are necessary to lure nuclear  
energy providers to the state. The Texas Economic Development Act was  
intended to enable Texas to compete for plants and jobs. Prime  
examples of the system working well were the Samsung expansion in  
Austin and the location of the Toyota plant in San Antonio.

But nuclear energy providers aren't going to settle elsewhere because  
the market for energy in Texas is too large.

Supporters of HB 2994 argue that the school tax breaks are useful  
because they will accelerate the process of energy providers locating  
in Texas. The sooner energy companies arrive, the sooner these  
companies hire employees, invest capital and pay taxes, supporters  
say. Moreover, only a limited number of federal tax breaks are  
available, and the faster energy companies set up locally, the more  
likely it is that they will receive a larger portion of these federal  
subsidiaries.

Consider, however, the tradeoff. Energy providers will only pay 20  
percent of taxes in years three through 10. The typical nuclear plant  
costs $7 billion to build and remains operational for about 60 years,  
according to figures supplied by the Nuclear Energy Institute, an  
advocacy group for the nuclear energy industry. Using those figures,  
a single plant could cost the state $40 million to $50 million in  
lost revenue.

Gov. Rick Perry has until Sunday to veto legislation passed in the  
most recent legislative session and we hope he decides to strike down  
HB 2994.

Even though we're opposed to the school tax breaks in HB 2994,  
nuclear power is one of several important energy sources for a  
growing state. A recent study conducted by the U.S. Energy Department  
found that Texas gives off the most carbon dioxide in the United  
States, and nuclear plants are the most practical way to reduce  
Texas' carbon footprints.

Nuclear energy is going to play an important role in Texas' future,  
but the Legislature shouldn't offer the corporations that will  
provide this energy with gratuitous economic handouts.