Nuclear Power Loan Guarantees Shrivel

Washington, DC - December 18 --The nuclear industry is touting the passage of the omnibus appropriations bill as a victory, but in fact Congress did not rally behind loan guarantees for nuclear power. The industry was lobbying for $50 billion in loan guarantees to attract reluctant Wall Street investors. It didn't get it.

When the budget-battle dust settled, Congress officially gave nuclear little to crow about. The only indication that lawmakers support loan guarantees for particular energy sources is in a paragraph-long "report" that accompanied the omnibus bill. This nonbinding paragraph spelled out the limit for loan guarantees for various energy sources. It set a ceiling of $38.5 billion, with capped amounts of $18.5 billion for new nuclear reactors, $2 billion for new nuclear fuel uranium enrichment facilities, $6 billion for coal-based power generation with carbon capture and storage, $2 billion for coal gasification, and $10 billion for renewable energy development.

Significantly, the funding levels in the report "are recommended obligation levels and not an appropriation of funds," Rep. Peter Visclosky (D-Ind.) wrote in a December 17 "dear colleague" letter. Visclosky is chairman of the House Energy and Water Appropriations Subcommittee.

In his letter, the congressman pointed out that the omnibus bill merely restated 2005 energy legislation provisions, which require the Department of Energy to obtain approval from the House Appropriations Committee for any plan to solicit loan guarantee applications.

Given the projected costs of building new reactors, the measure is hardly a victory for the nuclear industry. Cost estimates have escalated to as much as $12 billion to $18 billion for the kind of twin unit facilities most utility applicants favor. Under this recommended program, a successful nuclear loan guarantee applicant could do little more than fund one or two projects.

Although the report's loan guarantee language appears to favor nuclear power and fossil fuels over clean renewable energy sources, the nuclear industry got less than it asked for -- and more than it deserves.

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The Union of Concerned Scientists is the leading science-based nonprofit organization working for a healthy environment and a safer world. Founded in 1969, UCS is headquartered in Cambridge, Massachusetts, and has offices in Berkeley, California, and Washington, D.C. For more information, go to www.ucsusa.org.