This exchange came in response to a general plea for more nuclear power from a free-market advocate who otherwise is opposed to the same government subsidies to wind, solar, and battery firms. The free-market opportunity is to 1) repeal federal mega-subsidies (Investment Tax Credit, Production Tax Credit, research & development, Price Anderson liability-cap protection); 2) end rate-base treatment under state public utility regulation; and 3) replace the Nuclear Regulatory Commission with the Institute for Nuclear Power Operations.
E. Calvin Beisner of the Cornwall Alliance for the Stewardship of Creation posted (March 20):
Nuclear energy provides stable, 24/7 electricity with capacity factors often above 90%. Advanced Generation IV Small Modular Reactors (SMRs) offer passive safety features, shorter build times, scalability, and lower long-term costs. They can be deployed behind-the-meter for data centers and industrial users, reducing strain on the grid. If reliability and affordability matter, nuclear belongs at the center of the conversation.
I commented: “New nuclear capacity is the most expensive and wholly dependent on government subsidies,” which drew the rebuttal of Carlos F. Velázquez.
Velázquez: You’re ignoring the regulatory environment has been easing in ways that allow more flexible deployment, including colocated generation where large users can build capacity for their own needs and support the grid when excess power is available. That changes the financial model quite a bit compared to the traditional utility-only structure.
At the same time, SMRs are being developed specifically to move away from the one-off, highly customized builds that made older nuclear projects so difficult to finance and contract. The whole premise is repeatability and reduced construction risk over time.
So yes, early projects may still involve government participation, just like many other forms of energy infrastructure. But it’s not accurate to treat that as a permanent condition or as something unique to nuclear, especially given the current push to expand generation capacity across multiple sources.
Saying that nuclear is inherently subsidy-dependent overlooks the very changes that are being put in place to reduce that dependence.
Bradley: Been hearing the same thing since the 1960s…. Viability just ahead. Can you document one turnkey project with set cost and delivery? And why Price Anderson if nuclear is safe? And what about the other federal subsidies for a 70-year-old industry?
Velázquez: You’re bundling three separate claims together, and each one needs to be addressed on its own terms.
First, turnkey guarantees. No, there isn’t yet a fully standardized, fixed-cost SMR rollout with ironclad delivery guarantees. But that’s because these are early deployments. That same limitation applies to any first-of-a-kind infrastructure project. Using the absence of turnkey contracts at this stage as a disqualifier sets a standard that virtually no emerging energy technology could meet. The relevant question is whether the design approach is moving toward repeatability and cost predictability, and that is exactly what SMRs are built to do.
Second, Price-Anderson. That is not evidence that nuclear is uniquely unsafe. It is a liability framework for low-probability, high-impact events. Other industries handle catastrophic risk in similar ways, whether through federal backstops, insurance pools, or statutory limits. The existence of that framework says more about how risk is managed than about the underlying safety of the technology.
Third, subsidies. Every major energy source in the U.S. has received substantial federal support over decades. Fossil fuels, renewables, transmission infrastructure, all of it. So pointing to subsidies as if they are unique to nuclear does not distinguish it from the rest of the energy sector.
What still hasn’t been addressed is the central point: the model is changing. Regulatory barriers are being reduced, colocated generation is being encouraged, and modular designs are being developed specifically to reduce cost overruns and financing risk.
Evaluating a developing technology by demanding a fully mature, zero-risk end state today is not a serious argument. The question is whether the current trajectory is solving the historical problems, and in this case, it likely will.
Bradley: Four rebuttals. 1) The next generation of nuclear is always being offered as the new, viable thing. In the 1960s, it was scaling and learning-by-doing. The major vendors suffered major loses under turnkey contracts (General Electric, Westinghouse, etc.) and turned to cost-plus contracts, a real problem given rate-base economics under public utility regulation. Question: Why not wait until the technology is worth a free market test by buyers? Units are being built abroad (centrally planned economies); let the trial-and-error be there.
Bradley: Price Anderson Act of 1957. This was necessary to get the industry out of the starting gate. The law has been extended seven times (1966, 1975, 1988, 2002, 2003, 2005, 2024). Why can’t the companies either get their own insurance or put the capital of their firm at risk? In such a scenario, the reactor owners could receive the escrowed monies ($7 billion) for the transition and no longer pay into the required fund.
Bradley: Third, subsidies received by the nuclear industry birthed the industry in the first place. (Price Anderson, free enriched uranium, R&D, and state public-utility regulation were all important). The fossil fuels were not subsidized into existence like nuclear (and on-grid wind and solar) and never needed the tax breaks. Things like the oil depletion allowance and IDC expensing actually hurt the industry by causing wellhead overproduction (price wars) under the rule of capture/correlative rights in the US. And no, the electricity industry was not subsidized by government until public utility regulation came along several decades after its founding. Know your industry history!
Bradley: Fourth, federal regulation was very lax for the first decades of the nuclear industry and far too prescriptive beginning in the 1970s. After Three Mile Island, the industry itself ‘self-regulated’ via the Institute for Nuclear Power Operations (INPO). The free-market opportunity is to repeal federal ITC, PTC, R&D, Price Anderson, and state PUC rate-base treatment, while demoting the Nuclear Regulatory Commission with INPO. What do you think?
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No response followed from Mr. Velázquez.