Ronald Reagan famously said: “A government program is the closest thing to eternal life we’ll ever see on this planet.” One such program that has gone on for what seems like an eternity is the granting of taxpayer subsidies to certain industries.
For decades, governments have offered taxpayer subsidies to support existing energy sources or to develop new ones, as well as create new jobs. These subsidies have often taken the form of loan guarantees, direct payments or tax breaks. Once subsidies began to be made available, they became attractive to a number of industries.
The Big Beautiful Bill passed by the House of Representatives reduced or cut subsidies for wind and solar companies, while leaving nuclear subsidies intact. Sen. Rand Paul must lead the charge to halt this corporate welfare.
According to a 2024 study from the Texas Public Policy Foundation (TPPF), the Energy Information Agency (EIA) used to calculate energy subsidies every three year. The TPPF report found totals for every year.
The study found that from 2010 to 2023, solar received $76 billion, wind received $65 billion, oil and gas received $ 33 billion, coal received $20 billion, and nuclear received $26 billion in taxpayer subsidies.
According to the comprehensive study, since wind, solar, hydroelectric, geothermal, and nuclear are used for generating electricity, it compares subsidies within electricity markets.
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Nuclear has received a similar number of subsidies compared to wind and solar energy.
In the last month, Constellation Energy announced a deal with Microsoft to reopen Three Mile Island to service all of Microsoft’s Artificial Intelligence energy needs.
Not only would this be the first time that an American nuclear power plant would be reactivated, but it would also come with a hefty price tag. Constellation Energy is seeking a $1.6 billion loan guarantee from the U.S. Department of Energy, all time making money hand over fist from the rate paying public. But they still have millions to hand out to Woke organizations pushing all sorts of social silliness.
According to The Washington Post, “A loan guarantee would allow Constellation to shift much of the risk of reopening Three Mile Island to taxpayers. The federal government, in this case, would pledge to cover up to $1.6 billion if there is a default. The guarantees are typically used by developers to lower the cost of project financing, as lenders are willing to offer more favorable terms when there is federal backing.
Currently, Microsoft has a market capitalization of more than $3 trillion. Constellation Energy has a market capitalization of $90 billion. There is absolutely no reason why these two companies should be seeking to pawn off their risky start-up costs to the public. The public will not reap the benefits of Three Mile Island’s power production.
Constellation will make billions in profits from the Microsoft deal, which analysts say will double their market pricing. Constellation is also seeking tax credits for the operation of Three Mile Island, which will add approximately $120 million to its bottom line.
On Constellation's earnings call on November 4, 2024, CEO Joe Dominguez said "Folks Constellation is like no other company. We have a unique set of existing assets that creates opportunities that no one else has. We expect to see 13% compounded growth through the end of the decade, uniquely; it's backstopped by the federal government. "
The study also notes “many of the tax breaks for oil and gas production are permanent features of the tax code with no set expiration dates, and new programs for carbon capture and other technologies will expand the scope of fossil fuel subsidies into the foreseeable future. As explained above, most of these subsidies have fewer market-distorting effects than wind and solar subsidies, particularly on electricity markets.”
Nuclear companies have also used their lobbying and political muscle to threaten to shut down their clean energy operations to form green alliances that work to put fossil fuel energy producers our of business.
Fossil fuels have shown to be safe and reliable, but that does not matter to the subsidized energy class.
There can only be progress in the energy field if companies assume the financial risk to put their plans into action. Taxpayers have voiced opposition to subsidies and it is time to let the market work.
The Trump administration has the opportunity to break free from the corrupt liberal policies. Rand Paul will be a good ally in cutting off taxpayer giveaways.
Craig Shirley is Chairman of Citizens for the Republic.
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