Senate budget revives 'nuclear pork'
$50 billion loan guarantee plan tucked in for Energy Department
Nuclear energy advocates quietly slipped an extra $50 billion for an Energy Department program into the Senate's budget blueprint last week, giving new life to a provision that had been rejected as "nuclear pork" in February's economic stimulus bill.
Without debate, explanation or a recorded vote, senators accepted an amendment by Sen. Michael D. Crapo, Idaho Republican, to boost the department's "low-carbon" energy loan construction guarantee program by $50 billion over five years. The program would make it easier for the nuclear power industry to secure financing for plants, including the more than two dozen that are now pending.
The amendment is another challenge by the Democrat-led Senate to President Obama, whose energy policies have been antagonistic toward nuclear power. Part of a cluster of 15 changes proposed Thursday night at the tail end of the budget debate, the provision was offered on the Senate floor by Budget Committee Chairman Kent Conrad, North Dakota Democrat.
The same proposal was stripped from the stimulus bill after a leading environmental group, Friends of the Earth, called it a bailout for the nuclear power industry. At the time, the group ran ads attacking the sponsorship by Sen. Robert F. Bennett, Utah Republican, and called on Senate Appropriations Committee Chairman Daniel K. Inouye, Hawaii Democrat, and Senate Majority Leader Harry Reid, Nevada Democrat, to spurn the provision.
Friends of the Earth plans to lobby against the plan again. It says the measure's reappearance, even in its current nonbinding form in the Senate-passed budget resolution, is proof that its sponsors are determined to win the money this year.
"There is no question the nuclear industry is not giving up," said Nick Berning, a spokesman for Friends of the Earth. The industry's backers in the Senate, he said, are "trying again and we're going to fight it."
A spokesman for Mr. Crapo said the senator backed the amendment as a way to expand nuclear energy but noted that the Energy Department guarantee program, created in 2005, targets several so-called "clean energy" programs and does not favor nuclear power over other sources.
The program is designed to use taxpayer money only if utilities default on their loans. Still, the Congressional Budget Office estimates that the cost of the plan will be roughly $500 million over five years. Large defaults could push the price tag much higher, even though borrowers would have to pay fees to the federal government to obtain the loan guarantees and thus defray taxpayer costs.
The loan guarantee amendment was stripped from the stimulus bill in February at the insistence of House leaders. Its re-emergence in the Senate, as a nonbinding rider to the budget, is seen as a first step to inclusion in legislation later this year.
Mr. Crapo is one of several senators eager to expand the loan program. Sen. Byron L. Dorgan, North Dakota Democrat, and Sen. George V. Voinovich, Ohio Republican, included the measure in an energy proposal they announced last week.
Mr. Dorgan sits on the Senate Energy and Natural Resources Committee and chairs the appropriations subcommittee that oversees energy and water spending.
In the 2007-08 election cycle, electric utilities represented Mr. Dorgan's top contributor among industry sectors. Utility company political action committees and individuals associated with utility companies gave his campaign $181,326, according to the Center for Responsive Politics.
Mr. Dorgan's office declined to comment for this report.
Mr. Crapo, a member of the Senate Budget Committee, received $87,004 from utilities executives and PACs, the sixth-largest among his industry sector donors.
Mr. Dorgan drew up his energy legislation with the help of Securing America's Future Energy, or SAFE, which includes business executives and retired military leaders who advocate less reliance on foreign oil through expanded nuclear energy. The nonprofit organization, headed by FedEx Chairman Frederick W. Smith and retired Marine Corps Gen. P.X. Kelley, has called for additional guarantees for nuclear and "clean coal" technology.
"This proposal puts together a broader mosaic of what an energy plan would be to reduce the vulnerability of this country," Mr. Dorgan said at a news conference last week. Jonathan A. Grella, a spokesman for SAFE, said the legislation is not intended to benefit the nuclear industry alone.
"In terms of intentions, if we intended to make it specific, we would have picked a winner," he said.
The loan guarantee program was created to insure up to $38.5 billion in loans to 10 types of low-emissions energy projects, including "advanced nuclear energy projects," which refers to next-generation nuclear power plants.
The program, which is funded by user fees, did not issue any guarantees until this year, when the Obama administration pledged to begin acting on a backlog of applications. The Energy Department issued its first award last month to a solar panel manufacturer in California.
The chairman of the Energy and Natural Resources Committee, Sen. Jeff Bingaman, New Mexico Democrat, has said he also wants to expand the scope of federal financing in the energy bill that his committee is writing.
A spokesman for the committee said Mr. Bingaman is working with the ranking Republican, Sen. Lisa Murkowski of Alaska, on a measure to change the program into a "clean energy bank," an idea first proposed last year by Sen. Pete V. Domenici, a New Mexico Republican who has since retired.
Mr. Domenici maintained that the current loan guarantee program was subject to political influence and therefore was ineffective. His plan called for creating an independent entity to "level the playing field" among energy technologies and speed up the transition to low-carbon electricity.
Mitchell Singer, a spokesman for the Nuclear Energy Institute, which represents nuclear utilities, had no comment on the Dorgan-Voinovich bill or the Crapo amendment.
The industry has strongly supported federal loan guarantees to help it win financing for new nuclear plants, which can cost more than $10 billion for a single, moderate-sized 1,000-megawatt plant. The Energy Department's current loan guarantee authority includes $18.5 billion for nuclear financing.
Kevin Book, an industry analyst and consultant who has testified before Congress on the guarantee program, said climate and energy legislation headed for approval in Congress this year likely will include some kind of financing assistance for nuclear power but isn't likely to meet the industry's request. "Do I think they're going to get $50 billion? No," he said.
Nuclear energy advocates quietly slipped an extra $50 billion for an Energy Department program into the Senate's budget blueprint last week, giving new life to a provision that had been rejected as "nuclear pork" in February's economic stimulus bill.
Without debate, explanation or a recorded vote, senators accepted an amendment by Sen. Michael D. Crapo, Idaho Republican, to boost the department's "low-carbon" energy loan construction guarantee program by $50 billion over five years. The program would make it easier for the nuclear power industry to secure financing for plants, including the more than two dozen that are now pending.
The amendment is another challenge by the Democrat-led Senate to President Obama, whose energy policies have been antagonistic toward nuclear power. Part of a cluster of 15 changes proposed Thursday night at the tail end of the budget debate, the provision was offered on the Senate floor by Budget Committee Chairman Kent Conrad, North Dakota Democrat.
The same proposal was stripped from the stimulus bill after a leading environmental group, Friends of the Earth, called it a bailout for the nuclear power industry. At the time, the group ran ads attacking the sponsorship by Sen. Robert F. Bennett, Utah Republican, and called on Senate Appropriations Committee Chairman Daniel K. Inouye, Hawaii Democrat, and Senate Majority Leader Harry Reid, Nevada Democrat, to spurn the provision.
Friends of the Earth plans to lobby against the plan again. It says the measure's reappearance, even in its current nonbinding form in the Senate-passed budget resolution, is proof that its sponsors are determined to win the money this year.
"There is no question the nuclear industry is not giving up," said Nick Berning, a spokesman for Friends of the Earth. The industry's backers in the Senate, he said, are "trying again and we're going to fight it."
A spokesman for Mr. Crapo said the senator backed the amendment as a way to expand nuclear energy but noted that the Energy Department guarantee program, created in 2005, targets several so-called "clean energy" programs and does not favor nuclear power over other sources.
The program is designed to use taxpayer money only if utilities default on their loans. Still, the Congressional Budget Office estimates that the cost of the plan will be roughly $500 million over five years. Large defaults could push the price tag much higher, even though borrowers would have to pay fees to the federal government to obtain the loan guarantees and thus defray taxpayer costs.
The loan guarantee amendment was stripped from the stimulus bill in February at the insistence of House leaders. Its re-emergence in the Senate, as a nonbinding rider to the budget, is seen as a first step to inclusion in legislation later this year.
Mr. Crapo is one of several senators eager to expand the loan program. Sen. Byron L. Dorgan, North Dakota Democrat, and Sen. George V. Voinovich, Ohio Republican, included the measure in an energy proposal they announced last week.
Mr. Dorgan sits on the Senate Energy and Natural Resources Committee and chairs the appropriations subcommittee that oversees energy and water spending.
In the 2007-08 election cycle, electric utilities represented Mr. Dorgan's top contributor among industry sectors. Utility company political action committees and individuals associated with utility companies gave his campaign $181,326, according to the Center for Responsive Politics.
Mr. Dorgan's office declined to comment for this report.
Mr. Crapo, a member of the Senate Budget Committee, received $87,004 from utilities executives and PACs, the sixth-largest among his industry sector donors.
Mr. Dorgan drew up his energy legislation with the help of Securing America's Future Energy, or SAFE, which includes business executives and retired military leaders who advocate less reliance on foreign oil through expanded nuclear energy. The nonprofit organization, headed by FedEx Chairman Frederick W. Smith and retired Marine Corps Gen. P.X. Kelley, has called for additional guarantees for nuclear and "clean coal" technology.
"This proposal puts together a broader mosaic of what an energy plan would be to reduce the vulnerability of this country," Mr. Dorgan said at a news conference last week. Jonathan A. Grella, a spokesman for SAFE, said the legislation is not intended to benefit the nuclear industry alone.
"In terms of intentions, if we intended to make it specific, we would have picked a winner," he said.
The loan guarantee program was created to insure up to $38.5 billion in loans to 10 types of low-emissions energy projects, including "advanced nuclear energy projects," which refers to next-generation nuclear power plants.
The program, which is funded by user fees, did not issue any guarantees until this year, when the Obama administration pledged to begin acting on a backlog of applications. The Energy Department issued its first award last month to a solar panel manufacturer in California.
The chairman of the Energy and Natural Resources Committee, Sen. Jeff Bingaman, New Mexico Democrat, has said he also wants to expand the scope of federal financing in the energy bill that his committee is writing.
A spokesman for the committee said Mr. Bingaman is working with the ranking Republican, Sen. Lisa Murkowski of Alaska, on a measure to change the program into a "clean energy bank," an idea first proposed last year by Sen. Pete V. Domenici, a New Mexico Republican who has since retired.
Mr. Domenici maintained that the current loan guarantee program was subject to political influence and therefore was ineffective. His plan called for creating an independent entity to "level the playing field" among energy technologies and speed up the transition to low-carbon electricity.
Mitchell Singer, a spokesman for the Nuclear Energy Institute, which represents nuclear utilities, had no comment on the Dorgan-Voinovich bill or the Crapo amendment.
The industry has strongly supported federal loan guarantees to help it win financing for new nuclear plants, which can cost more than $10 billion for a single, moderate-sized 1,000-megawatt plant. The Energy Department's current loan guarantee authority includes $18.5 billion for nuclear financing.
Kevin Book, an industry analyst and consultant who has testified before Congress on the guarantee program, said climate and energy legislation headed for approval in Congress this year likely will include some kind of financing assistance for nuclear power but isn't likely to meet the industry's request. "Do I think they're going to get $50 billion? No," he said.