On the evening of April 10, 2016, I met with two good friends and fellow nuclear energy bloggers for a wide ranging discussion about nuclear energy. We talked about the following topics:

* Nuclear energy’s role in the future of energy supplies

* Impact of the Nuclear Security Summits initiated by President Obama

* Demonization campaign being waged against the use of refined uranium (aka highly enriched uranium or HEU)

* Murky future of the US’s plutonium disposition program in light of the DOE’s FY2017 budget that cancels the Mixed Oxide (MOX) fuel fabrication facility

* Growing risk that California may experience a repeat of the 2000-2001 energy crisis this coming summer

* Compensating various sources of electrical power

* Destabilizing effects of the extension of the renewable energy PTC/ITC subsidies – which take $5 billion/year from taxpayers and give it to selected power source developers

My guests included:

Meredith Angwin, who blogs at Yes Vermont Yankee and the Northwest Clean Energy blog

Steve Aplin, who blogs at Canadian Energy Issues

I hope you enjoy the show.

Note 1: During our discussion about the compensation received by various electric power sources, Meredith mentioned several figures from an article that she wrote for Nuclear Engineering International. Here is a link to those figures. http://www.neimagazine.com/features/featurepay-for-performance-and-the-us-grid-4800656/featurepay-for-performance-and-the-us-grid-4800656-3.html.

The article titled ‘Pay for Performance’ and the US grid is an important source of information about this complex, but impactful situation. Meredith is becoming my “go-to” expert on the convoluted grid supply rules.

Note 2: We talked about the little understood change to the wind energy Production Tax Credit that was initiated in the 2009 American Reinvestment and Recovery Act. That act included a provision that allowed wind energy developers to opt for a 30% of project cost investment tax credit (ITC) in lieu of the $23/MW-hr Production Tax Credit. Because of the time value of money, nearly every project developer recognized that it was a more lucrative option because all of the subsidies were delivered less than a year after project completion instead of being spread over a ten year period.

The option also shifts performance risk from the developer to the government. There is a reporting requirement that only lasts for 5 years and has few teeth. In other words, it is entirely plausible for some of the projects to fail to generate the promised amount of power and for the developer or the project owner to simply give up. There is a low probability that anyone will be tasked with the effort required to obtain a refund of the ITC, which might be a substantial sum of money for a large project.

The option to take the ITC in lieu of the PTC was included in the renewable tax credit extension wedged into the Omnibus appropriation bill passed at the end of the congressional session just before the Christmas holiday.

When the ARRA first invented the option to tax an investment tax credit, renewable energy lobbyists successfully made the case that investment tax credits have no value if the developer has no taxes to offset and if even banks that one provided a market for transferring the ITC – at a favorable cost – also had no...