RE: RE: RE: Scotia Macleod 20.00 to 21.30Analysts worried about backlash? Herding mentality? Being truly manipulative to get shares cheap? Or, they have data and insights we don't have and want to play it safe (for their performance bonus)? Who knows??? As far as investor backlash, check this out ...
Investors Warned: Fukushima Could Ignite Backlash Against U.S. Nuclear Power Industry
A new report by Moody’s Investors Service has a title guaranteed to send chills through the nuclear power industry: “Re-evaluating Creditworthiness for Global Nuclear Generators.”
The report warns that “All nuclear operators…will suffer the consequences that emerge from a post Fukushima environment.”
Moody’s characterizes these consequences as “contagion risks” caused by the ongoing crisis at Fukushima Daiichi nuclear power plant (FDI). These risks include:
* increased political intervention;
* an expectation for increased regulatory scrutiny;
* potential delays…associated with established licensing and permitting protocols; and
* emboldened opposition groups.
The report does point to the benefits of nuclear power, including competitive pricing, strong base-load power provision, and low-carbon emissions. But, they worn, “We believe Fukushima
could ignite a popular backlash against nuclear generation.”
The report also points to problems that pre-date the crisis at FDI. “New nuclear generation is already more expensive to build than most other sources of electricity,” it continues, “its liability insurance is effectively socialized and material questions are being raised regarding its waste products.”
Although liability insurance is socialized (U.S. taxpayers pick up the cost of a catastrophic event beyond a certain point), Moody’s points to a potential problem at FDI, which has a similar indemnity agreement with the Japanese government. FDI’s owner is the Tokyo Electric Power Company (TEPCO).
“We are concerned,” the report states, “with the scope of the infrastructure damage and how TEPCO will be able to raise its rates (on its remaining customers) to ensure financial recovery on a timely basis.”
Japan’s heavy reliance on nuclear power results in a ripple effect from a crisis, a situation that could play out in the U.S. under similar circumstances. Japan already faces rolling blackouts for months due to the loss of electrical capacity.
“A less reliable electric grid could contribute to supply chain issues and impact other important exporting sectors, such as automobile manufacturing, technology, chemicals, pharmaceuticals and steel,” concludes the report.
The increased scrutiny of the nuclear power industry has already begun in the U.S., with some unsettling discoveries.
For example, the inspector general of the Nuclear Regulatory Commission (NRC) recently found that 28% of U.S. commercial nuclear power plants did not report equipment defects that could pose “substantial” safety risks. The report concluded that unless action is taken to correct the situation, “the margin of safety for operating reactors could be reduced.”