Aug. 6, 2007 (LPAC) - The Senate Energy bill, passed at the end of July, includes a provision to increase federally-backed loan guarantees to build new nuclear power plants, by tens of billions of dollars. Former Senate Energy Committee chair, Pete Domenici (R-NM), has fought to have nuclear energy included in the list of "clean" new technologies that the federal government will encourage by lowering the financial risk, through loan guarantees. This provision is in the new Senate bill. The issue is not settled, however, since the House water and power appropriations bill specifically excludes nuclear in the "clean technologies" loan guarantee program.
The previous Energy Act, of 2005, does include billions of dollars in loan guarantees for nuclear. But the Office of Management and Budget has not lived up to the provisions in the Act, by refusing to fully fund the loan guarantee program, covering only 90% of the funds companies must borrow to build nuclear plants, rather than the 100% of the borrowed cost, as mandated by Congress.
Constellation Energy plans to build a new, $5 billion nuclear reactor at Calvert Cliffs in Maryland, paying $1 billion (20% of the cost) out-of-pocket, and borrowing the rest. The Baltimore Sun reported July 23rd that five major investment banks say Calvert Cliffs, and dozens of other proposed new nuclear plants, will not be built with unsecured debt, since in the 1980s billions of dollars of loans were written off, when 100 nuclear power plants were cancelled. Constellation has begun its license application process, placed orders for long lead-time components, and secured $300 million in local tax breaks. But if the banks don't finance the full amount of loans needed, the plant won't be built. If the government won't guarantee the loans, the banks won't finance it.
Despite the best efforts of some in Congress, could there be any better argument for why critical infrastructure, such as power plants, must be funded, not through Wall Street, but through LaRouche's proposed Infrastructure Development Bank?
