Show Me the Loan Guarantees

August isn’t the most exciting news month of the year, largely because our Congress people are checking out the beaches back home and braving an evening with the constituents and because everyone else can barely think in the heat much less make news. So we could forgive the readers of the St. Louis Post-Dispatch if their eyes droop a bit when they confront an editorial about loan guarantees.

Right at the moment, the climate change bill has (somewhat ironically) lost heat while health care sucks up all the news resources. But it’s still in progress and still important. Stanford Levin, Emeritus Professor of Economics at Southern Illinois University Edwardsville, has the elements about right:

Because nuclear power plants are expensive to build — but with relatively low operating costs — loan guarantees are important and may be crucial to their construction. Therefore, it makes little sense that the legislation as now drafted limits any energy source to no more than 30 percent of the total loan guarantees. This ignores the relatively high capital cost of nuclear power plants, and, consequently, their special need for loan guarantees.

That’s a really solid explanation of why loan guarantees for nuclear plants pay off in the long run and a pretty good ding at Congressional skittishness.

Limiting loan guarantees for nuclear power plants probably would result in loan guarantees for energy that is more expensive and uses unproven or less proven technology. That may mean a higher default rate, costing taxpayers more, at the same time contributing less to clean energy and energy independence. Loan guarantees for nuclear power plants without the 30 percent limit would comport with the purpose of the act, limit costs to taxpayers, and provide carbon-emissions-free electricity at the lowest possible cost.

Also about right. We’d probably hesitate to sound such a dire note about “less proven” technology, but in terms of risk based on maturity, it’s hard to argue with this formulation. Read the whole thing. Levin’s background in economics brings an interesting perspective to his op-ed – and he’s that rarity, an academic writer interested in keeping his ideas reader friendly.

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The Dispatch doesn’t seem to have weighed in on this topic. We’re sure there’s an editorial on AmerenUE’s efforts earlier this year to have overturned a ban on charging customers for the construction of a new plant, but nothing found (we’d be surprised if it was on Ameren’s side).

They do have some recent editorials on global warming:

Climate change and invasive species

Global warming threatens American security

Missouri doesn't need another casino (we beg to differ)

The capital dome in - Quick – what’s the capital of Missouri? If you guessed correctly – and you’re not from Missouri – a merit badge to you. (There was one for knowing state capitals when I was a Boy Scout.)