Tax subsidies for nuclear energy include the following items:

  • Advanced nuclear power production credit
  • Special tax rate for nuclear decommissioning trust fund

Although it was created by the Energy Policy Act of 2005, the value of the advanced nuclear power production credit—which provides 1.8 cents per kilowatt hour of electricity produced during the first 8 years of a plant’s operation—remains at zero. This is because the credit applies to new nuclear plants with an approved Nuclear Regulatory Commission (NRC) design, but no new nuclear plants have been built.

As such, tax subsidies specific to nuclear technology have been wholly provided for by the special tax rate for nuclear decommissioning trust funds, which was enacted in 1992.  Under NRC requirements, every nuclear plant is required to hold in trust a sufficient amount of money to decommission the plant after the end of its life.  This special tax rate reduces the tax on the trust fund’s earnings from the general corporate tax rate to a 20 percent tax rate meant to reflect the average tax rate paid by consumers of electricity.

For Fiscal Years 2009 through 2012, nuclear accounted for 5 percent of total tax subsidies for energy.