2nd UPDATE: Loan-Guarantee Program To Be Sped Up
January 15 2010 - 5:29PM
Dow Jones News
U.S. Energy Secretary Steven Chu said Friday that the Obama
administration hopes to issue nuclear loan guarantees "soon" as
part of a broader plan to speed up loan guarantees, but that the
government is running into problems finalizing the subsidies.
"We're going to be accelerating our loan-guarantee process even
more," Chu told reporters in a briefing to discuss the
administration's priorities for 2010. Chu said that nuclear loan
guarantees would come "soon," but that getting them finalized was
"more complicated than I thought."
Constellation Energy Group Inc. (CEG), NRG Energy Inc. (NRG),
Scana Corp. (SCG) and Southern Co. (SO) are expected to receive the
first guarantees for nuclear projects. Spokespeople did not
immediately return phone calls or emails.
Government support is viewed as essential because of high costs,
lengthy timetables and a history of cost overruns in the
construction of nuclear reactors.
The U.S. Energy Department last year took a step toward speeding
up funding by changing some rules. Among the changes was a decision
to eliminate the requirement that the U.S. government be first in
line for claims if a nuclear power project guaranteed by the U.S.
government defaults.
The DOE also said that under the rule changes, it would be able
to consider teaming up with overseas financiers known as export
credit agencies. That would help UniStar Nuclear Energy, which is
backed by Constellation and France's EDF SA (EDF.FR), because the
French government could try to guarantee projects made with
components from the country. Unistar plans to use a reactor from
France's Areva SA (ARVCY.)
The Obama administration has been talking up nuclear energy at a
time when Republicans, who tend to favor nuclear power, will be
essential to passing climate legislation. But the White House has
also indicated that it favors taking a new approach to the handling
of nuclear waste, abandoning long-running government plans to store
the waste at a central repository at Yucca Mountain. That has
complicated its message.
"Yucca Mountain is off the table," Chu said, affirming a policy
that the Obama administration announced last year. Chu has
announced plans to form blue-ribbon panel to study a new approach.
On Friday, Chu said that the panel would not be charged with coming
up with a new central repository.
The loan-guarantee program that started in 2005 under the Bush
administration finalized its first subsidy last year.
Asked if companies should still have to pay the government fees
for waste disposal even though the U.S. government has not met its
obligations to haul off the waste, Chu played down the costs to
companies, saying that "waste disposal is a small fraction of" the
costs of nuclear power.
-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654;
siobhan.hughes@dowjones.com
(Mark Long and Rebecca Smith contributed to this report.)
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