Another Push for Nuclear Power
Tuesday, December 18, 2007
Sen. Pete V. Domenici doesn't give up easily.
The ranking Republican on the Energy and Natural Resources Committee may be retiring next year, but he is still pushing hard to give the nuclear power industry a helping hand from the federal government.
Three times this year he has tried -- and failed -- to insert language in various bills to raise or eliminate the limits on federal loan guarantees for new nuclear power plants.
Over the weekend, the senator from New Mexico appeared to step closer to his goal by persuading fellow lawmakers to insert language in the omnibus appropriations bill that could eventually channel as much as $38.5 billion in federal loan guarantees to energy projects, more than half of them for nuclear power plants and uranium enrichment. The bill said the loan guarantees would cost the federal government nothing, even though budget experts say at least half a billion dollars and perhaps much more should be set aside to cover possible defaults.
"It's very positive," said Steve Kerekes, spokesman for the Nuclear Energy Institute, noting that the bill also contains provisions for loan guarantees for renewable energy, energy efficiency and carbon capture from coal-fired plants.
Josh Dorner, a spokesman for the Sierra Club, disagreed. "It's disappointing that after fighting to keep this off of numerous bills, it's on here thanks in large measure to the efforts of our friend Pete Domenici," he said. Domenici has tried to boost loan guarantees for the nuclear industry in the energy bill, the energy and water appropriations bill and the farm bill.
Some environmental groups that oppose expansion of nuclear power were trying to figure out yesterday whether Domenici had finally succeeded. The language in the appropriations legislation extends the loan guarantee program for two years but does not include any loan amounts. Those figures are in a separate report that accompanies the bill and guides government agencies.
"It's ambiguous," said Erich Pica, a spokesman for Friends of the Earth. But, he added, "I think he's close to achieving something."
Congressional aides said federal agencies faithfully follow the guidelines in the appropriations committee reports on bills to avoid endangering their funding.
The report on the omnibus bill says the Energy Department should guarantee, among other things, $18.5 billion in loans for new nuclear plants, $10 billion for renewable energy and efficiency, $6 billion for carbon capture at coal plants and $2 billion for uranium enrichment.
One consolation for anti-nuclear groups: The report says the Energy Department must present its loan guarantee plan to congressional appropriations committees for approval, providing another chance for review.
Rep. Peter J. Visclosky (D-Ind.), a member of the House Appropriations Committee, tried to reassure House Democrats, who have vigorously opposed loan guarantees for nuclear power plants. "These are recommended obligation levels," he said. He also pointed to the guarantees for renewable energy and carbon capture and storage, saying "this program also aims to address our energy crisis in a way that reduces our impact on the environment."
Some of the harshest criticism of loan guarantees came from budget experts, not environmentalists. The proposed bill says fees from companies seeking loan guarantees would cover the cost of those guarantees.
But Peter Bradford, a policy adviser and former member of the Nuclear Regulatory Commission, said that the fees are "a pittance compared to the taxpayer exposure" and that "scoring the loan guarantees at zero is financial chicanery of a low order."
Bradford said electricity customers "spent tens of billions of dollars saving nuclear power plant owners from large losses, even bankruptcy" during the 1990s. "The loan guarantees arrange the next multibillion-dollar rescue before the fact and charge it to taxpayers instead of customers," he added.
Domenici and the nuclear industry have argued that big loan guarantees are needed to kick-start the nuclear reactor construction business, which has been largely dormant for 20 years. Because the plants are expensive, large guarantees are needed, they say. Jim Owen of the Edison Electric Institute adds: "If you look at climate change, getting some new nuclear reactors into the ground is going to have to be part of any reasonable calculus."
Foes respond, however, that extremely high construction costs for nuclear reactors and unresolved issues about nuclear waste disposal make the plants uneconomical and the federal guarantees unwise.