WASHINGTON, D.C.—The U.S. Department of Energy today released a fiscal year 2011 budget request that increases to $54.5 billion, from $18.5 billion currently allotted, the amount of federal loan guarantees to be accessed by companies planning to build new nuclear power plants.
The budget news comes just days after President Obama said in his State of the Union address that the United States needs to build “a new generation of safe, clean nuclear power plants.”
The president’s call for new nuclear plant construction and the budget’s tripling of loan guarantee volume for new nuclear plants “is a tremendously positive development for our nation,” Nuclear Energy Institute President and Chief Executive Officer Marvin Fertel said.
“These loan guarantees will serve as a catalyst to accelerate construction of new nuclear plants, creating thousands of high-paying, long-term jobs in the process. By supporting new reactors, loan guarantees also will reinvigorate U.S. manufacturing capability for nuclear energy components,” Fertel said.
“Coupled with the solid bipartisan support for nuclear energy that exists in Congress, the Administration’s initiative will make a meaningful difference in bringing about development of the nuclear energy facilities that our nation needs to meet rising electricity demand and increasingly stringent environmental requirements.”
Nuclear energy supplies more than more than 70 percent of the electricity generated by sources that do not emit greenhouse gases into the atmosphere. License applications for 22 potential new reactors to be built over the next 10-20 years are under active review by the U.S. Nuclear Regulatory Commission.
Loan guarantees are designed to boost investor confidence and allow worthy projects to move ahead with debt financing on more reasonable terms that ultimately will lower the overall cost of electricity generated by those projects. Loan guarantees for nuclear plants are not an appropriation and, therefore, do not represent an outlay of taxpayer dollars when projects are successfully completed.
The increase in loan guarantee volume will raise the number of new nuclear plant projects that can participate in the federal government’s clean-energy loan guarantee program.
The fiscal year 2011 budget request seeks to reinstate a $200 million tax on the industry for the Uranium Enrichment Decontamination and Decommissioning fund. The industry already has fully met its obligations to that program, which was established to decommission Department of Energy uranium enrichment facilities in three states. This would mark the third time that the industry has been taxed for this effort, even though it met its $2 billion-plus obligation under a 1992 statute, and the fund has a balance of $4.6 billion. Conversely, the federal government has yet to meet its initial funding requirements for this program.
The industry strongly supports the safety goal but nonetheless is “appalled,” Fertel said, that DOE seeks to reinstate the D&D fund related to the environmental cleanup of facilities that the government built decades ago in Kentucky, Ohio and Tennessee to enrich uranium for post-World War II defense programs. Commercial nuclear power plants subsequently entered into agreements with the government to buy enrichment services for uranium fuel used to generate electricity. The Kentucky plant still operates.
The budget request does not include funding for the DOE used nuclear fuel management program that for decades has focused on development of an underground repository at Yucca Mountain, Nev. DOE has a license application for the facility pending with the NRC, but the Administration’s budget document states that Yucca Mountain “is not a workable option” and that the program will be discontinued this year.
“The industry does not support the termination of this program but believes that, if it is going to happen, it should occur in an orderly manner to permit the licensing process to be restarted if ever warranted,” Fertel said. “Energy Secretary (Steven) Chu last week restated the federal government’s obligation to manage used fuel. We look forward to the work of the blue ribbon commission in developing recommendations for safely managing that fuel.”
Under the terms of the Nuclear Waste Policy Act, electric utilities and users of nuclear-generated electricity since the early 1980s have supplied $30 billion to the federal government for the disposal of used nuclear fuel from commercial nuclear power plants. The federal Nuclear Waste Fund has a $22 billion surplus, receives more than $750 million in annual payments from consumers, and earns annual interest in excess of $1 billion. The proposed repository also would house high-level radioactive waste from U.S. defense programs.
The fiscal year 2011 budget includes $793 million for clean-energy activities and civilian nuclear energy programs, including research and development and infrastructure programs. This includes a new cross-cutting research program to address technology needs for all aspects of nuclear energy production.