Energy Bill Aids Expansion of Atomic Power

Why the secrecy?

Energy Bill Aids Expansion of Atomic Power:
A provision buried in a recent Senate bill could make new nuclear plants eligible for tens of billions of dollars in government loan guarantees.
... Lobbyists have told lawmakers and administration officials in recent weeks that the nuclear industry needs as much as $50 billion in loan guarantees over the next two years to finance a major expansion.

The biggest champion of the loan guarantees is Senator Pete V. Domenici of New Mexico, the ranking Republican on the Senate Energy Committee and one of the nuclear industry’s strongest supporters in Congress.

Senator Jeff Bingaman, Democrat of New Mexico and the energy bill’s author, has long argued that nuclear power plants do not need federal loan guarantees. Mr. Bingaman said that the industry was over-interpreting the provision and that it would provide loan guarantees for only the most innovative power plants.

I am ambivalent about nuclear energy - better than coal, probably better than petroleum, yet the problem of everlasting nuclear waste has not yet been solved. However, I most certainly do not like the system of public financing of nuclear plants. Public financing, yet private profit. Sounds like welfare to me.

But the provision could go much further than many lawmakers had in mind by giving the Department of Energy the power to approve an unlimited amount of loan guarantees for “clean” power generation. Under legislation enacted in 2005, nuclear power qualifies as a clean technology because it does not emit carbon gases that contribute to global warming.

Power companies have tentative plans to put the 28 new reactors at 19 sites around the country. Industry executives insist that banks and Wall Street will not provide the money needed to build new reactors unless the loans are guaranteed in their entirety by the federal government.

...
Many experts fear that the proposed subsidies could leave taxpayers responsible for billions of dollars in soured loans.

“Such projects, by their nature, pose significant technical and market risks,” the nonpartisan Congressional Budget Office warned last month in an analysis of the provision. “Studies of the accuracy of cost estimates for pioneering technologies have found that estimates are consistently low.”

Michael J. Wallace, the co-chief executive of UniStar Nuclear, a partnership seeking to build nuclear reactors, and executive vice president of Constellation Energy, said: “Without loan guarantees we will not build nuclear power plants.”

...
The little-noticed provision in the Senate bill subtly refines and expands the loan guarantee program that Congress passed in the Energy Policy Act of 2005.

As before, the Department of Energy would be allowed to guarantee 100 percent of the loans and up to 80 percent of the total cost to build a reactor.

But the bill essentially allows the department to approve as many loan guarantees as it wants for both new reactors and plants that use other “clean” technologies.

That is a big change. Under current law, the government is only allowed to guarantee a volume of loans authorized each year by Congress. Last year, Congress limited the government to awarding just $4 billion in loan guarantees for clean energy projects during the 2007 fiscal year

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