By Dan Morse
Washington Post Staff Writer
Sunday, December 23, 2007
It's just one paragraph, tucked amid a mountain of legislation passed last week by Congress, but to proponents of nuclear power in Calvert County, it speaks volumes.
The paragraph authorizes the U.S. Energy Department to give loan guarantees to private lenders for up to $18.5 billion worth of new reactor projects. A big chunk of that protection could go toward financing a proposed third reactor at the Calvert Cliffs Nuclear Power Plant in Lusby.
"This is a huge step," said Michael J. Wallace, executive vice president of Constellation Energy. The Baltimore company wants to build the reactor, expected to cost $4 billion or more.
The Calvert Cliffs plant has produced electricity from its two reactors for three decades. Many residents and political leaders say they want the third reactor because it would provide jobs and tax revenue. Constellation said that if it gets regulatory approval and decides to build the reactor, it could open by 2015. That would make it one of the first reactors built in the United States in decades.
Constellation is moving forward on other fronts.
On Jan. 4, the Maryland Public Service Commission will meet in Prince Frederick to discuss Constellation's application for a "Certificate of Public Convenience and Necessity," one of the approvals needed to build the reactor. The meeting is set for 2 p.m. at the library on Costley Way. The PSC has said those interested in intervening in the matter should file a petition by Jan. 2.
PSC regulators will study the proposed reactor's environmental effects and other issues.
Wallace said PSC leaders indicated they liked the project. "Comments made by all the commissioners of the PSC were supportive," Wallace said in an interview Thursday.
A PSC spokesman declined to comment.
In Calvert, two opponents of the third reactor said Friday that they did not know about the upcoming meeting. One of them, Norma Powers, said she is convinced that the reactor is a done deal but plans to fight it because she fears, among other things, that it would be too difficult to evacuate southern Calvert if a catastrophe occurred at the plant.
"I'd like to cause them a few more headaches, if I can," Powers said.
As for the federal loan guarantees, Constellation has said for months that without them, the Calvert Cliffs expansion is in peril. Without such protections, many Wall Street lenders remain leery of nuclear projects, remembering the financial difficulties after the Three Mile Island accident in 1979.
Support for nuclear energy is growing in many parts of the nation because it is seen as clean energy with no "greenhouse gas" emissions.
For months, nuclear companies have lobbied Congress for the loan guarantees. Wallace said he remains concerned about how details of the program would be worked out and who would fund administrative costs.
Opponents of nuclear projects said they will continue fighting the loan guarantee program. They argue that if nuclear power makes economic sense, it should be able to attract private investors on its own without federal backing.
"There's going to be another bite at the apple [on loan guarantees] from groups like mine," said Tyson Slocum, director of the energy program at Public Citizen, a consumer advocacy group.
Jon Block, nuclear energy and climate change project manager for the Union of Concerned Scientists, said it's not clear how much authority the paragraph about nuclear loan guarantees. The statement was in a report that accompanied an appropriations bill. Block also said that with the expected costs of new reactors, $18.5 billion wouldn't go far. He said some of the reactors could top $12 billion.
"The nuclear industry got less than it asked for," Block said, "and more than it deserves."
But a nuclear industry trade group said the report accompanying the bill indeed allocates loan guarantees to cover $18.5 billon for nuclear projects, as part of a larger loan guarantee for $38.5 billion for energy projects.
"The availability of loan guarantees to facilitate debt financing . . . will help reduce uncertainties surrounding these capital-intensive projects," Frank L. "Skip" Bowman, president of the Nuclear Energy Institute, said in a statement.