The Reagan administration plans to send to Congress today what seems certain to be a controversial proposal designed to attract $1.1 billion in additional private funds for completing the Clinch River breeder reactor in Oak Ridge, Tenn., it has been learned.
A task force studying alternatives for financing the prototype 375-megawatt power plant has proposed luring private investment by guaranteeing that the advanced nuclear reactor will generate a certain amount of electricity for 30 years starting in 1991.
The government, under this proposal, also would guarantee that this electricity would be sold at a given minimum price.
If the Clinch River plant--called a breeder because its reactor will produce more plutonium than it uses for fuel--were not completed or did not operate successfully, the government would be liable for the revenues from the electricity it guarantees the experimental plant will generate.
The Breeder Reactor Corp., which represents 753 utilities participating in the project, concludes that this combination of government "assurances and tax benefits which private investors generally require for a project of this magnitude" could bring in "as much as 40 percent of the $2.4 billion" needed to complete the facility.
"The net effect," the task force says, would be "to significantly reduce the required federal outlays" for Clinch River between now and the anticipated startup of the reactor in 1989. At worst, an Energy Department source said, the federal government would be liable for about the amount it would have spent during this period anyway.
The new proposal for financing Clinch River is contained in two reports--one by the Energy Department and the other by the task force organized by the Breeder Reactor Corp.--that will be sent today to appropriations committees in each house of Congress. Copies were obtained by The Washington Post.
As part of a congressional compromise that narrowly kept the Clinch River project alive through fiscal 1983, the Energy Department was ordered to explore ways of meeting soaring costs--at least $3.6 billion by the time the reactor is completed.
The likelihood that the new proposals will be controversial was suggested yesterday when Sen. Gordon J. Humphrey (R-N.H.) denounced the plan even before the administration sent it to the Capitol.
"What the Energy Department is now proposing for Clinch River is nothing more than a preemptive utility bond disaster not unlike that which the Northwest is now facing with the pending default of the Washington Public Power System," Humphrey said.
The Energy Department estimated a net cash flow that the Clinch River reactor should be able to produce "from the sale of electricity over a 30-year period."
"Based upon our assumption that the electric revenue from the plant is equivalent to firm baseload capacity for a coal plant, project income should be sufficient to cover operating costs plus debt service on a loan of about $800 million (including interest during construction)," the task force concluded.
The Energy Department also said it appeared clear that a market would exist for the breeder's electricity.