Skip to main content

Loan Guarantees and Desperation

Chet Edwards small-thumb-425x321 We’ve seen surprisingly little news for it, but maybe it’s a little too inside nuclear baseball. That doesn’t mean the news isn’t good, though:

House lawmakers approved a spending bill Thursday that includes $25 billion in loan guarantees for new nuclear reactors, an amount that could enable the expansion of North Texas' Comanche Peak plant.

That last bit explains why this is appearing in the Dallas News. And Luminant is certainly ready to roll:

Dallas-based Luminant, which owns the plant, said the additional amount "would be sufficient" to allow funding for its plan to build two reactors. Luminant said it was "the first alternate" last year when the U.S. Department of Energy selected four nuclear projects to further consider for loan guarantees.

"We can't guarantee it, but this is a very important step to enabling it," said David Campbell, chief executive of Luminant, the power-generation unit of Energy Future Holdings.

No playing favorites from us, but we wish them the best. Let’s see how it goes.

---

Interestingly, Campbell give a shout-out to his local Representative Chet Edwards (D-Texas)

Campbell credited Rep. Chet Edwards, D-Waco, with helping to secure the funding. An earlier draft of the legislation didn't include funding for the nuclear program, which is unpopular among liberals in the House.

"We are at the dawn of a nuclear power renaissance in the United States, which will create hundreds of thousands of good-paying jobs and the clean energy our nation needs," Edwards said in a prepared statement.

Well, not all liberals in the House, surely. But Edwards didn’t say that, the reporter did (and shouldn’t have.) What Edwards said – all good.

---

But back to the loan guarantees. The House had already moved $9 billion of the Obama administration’s loan guarantee authority request from 2011 to a 2010 supplemental spending bill, so the total authority between the two would be $34 billion. And an additional $25 billion has been committed for 2011 to renewable energy sources (so you can tweak your friends who try to portray this as a “bail-out” for nuclear energy).

Because, whether for nuclear or renewable energy sources, there’s no taint of bail-out here. As we point out every time we mention them, loan guarantees are not direct payouts from the government to an industry. Instead, they give private lenders confidence to loan money for nuclear energy plant construction.

Government offsets the risk in part because government, through regulation and a long licensing process, adds to the risk yet has a societal interest in new baseload (in the case of nuclear energy) electricity generation that does not produce greenhouse gases.

There are other considerations, too, including that the U.S., unlike other countries, leaves the energy sector largely to private business. Those businesses’ are relatively small – the largest U.S. electric company has a market value of about $33 billion and most are considerably smaller. So loan guarantees help ensure that an electric company isn’t risking financial disaster – obviously, also a social good. You can see NEI’s response here.

So – the news is good.

---

Well, not for everyone:

This is nuclear power's summer of desperation. It has just a few short weeks to grab billions in taxpayer funding for new nuclear plants.

Last time we wrote, a $9 billion package was being slipped into an "emergency" war appropriations bill.

Now the industry is demanding $25 billion for unspecified projects. Again, your voice can make a difference.

This comes from Bonnie Raitt, Jackson Browne and Graham Nash. As happens, our summer of desperation is going just fine, thank you very much. Maybe to add to the good vibe, we’ll “demand” some iced tea and lay some of their vinyl on the turntable. Good entertainers all.

Rep. Chet Edwards.

Comments

JD said…
As a joke a friend signed me up for that nukefree.org newsletter. I replied to this most recent one, asking if they were in fact referring to loan guarantees. The letter itself only says "$9 billion package" and "demanding $25 billion", and of course the government won't be out this much money unless every single nuclear-related project fails.

Interestingly enough they failed to mention that the appropriations bill doesn't so much call for $9 billion in nuclear loan guarantees, as it calls for $18 billion in energy loan guarantees, split equally between nuclear and renewables.

Where then is the criticism of renewable energy loan guarantees in the appropriations bill?

I fear I know the answer to this question. Nukefree.org knows what's best for us, so it's okay if they mislead people toward that end. They've seized on the war appropriations bill because it's convenient, not because they disagree with the non-war spending. They don't mention renewables getting loan guarantees because if loan guarantees are "bailouts" (as nukefree.org constantly says) what does that mean for renewables?

Popular posts from this blog

An Ohio School Board Is Working to Save Nuclear Plants

Ohio faces a decision soon about its two nuclear reactors, Davis-Besse and Perry, and on Wednesday, neighbors of one of those plants issued a cry for help. The reactors’ problem is that the price of electricity they sell on the high-voltage grid is depressed, mostly because of a surplus of natural gas. And the reactors do not get any revenue for the other benefits they provide. Some of those benefits are regional – emissions-free electricity, reliability with months of fuel on-site, and diversity in case of problems or price spikes with gas or coal, state and federal payroll taxes, and national economic stimulus as the plants buy fuel, supplies and services. Some of the benefits are highly localized, including employment and property taxes. One locality is already feeling the pinch: Oak Harbor on Lake Erie, home to Davis-Besse. The town has a middle school in a building that is 106 years old, and an elementary school from the 1950s, and on May 2 was scheduled to have a referendu

Why Ex-Im Bank Board Nominations Will Turn the Page on a Dysfunctional Chapter in Washington

In our present era of political discord, could Washington agree to support an agency that creates thousands of American jobs by enabling U.S. companies of all sizes to compete in foreign markets? What if that agency generated nearly billions of dollars more in revenue than the cost of its operations and returned that money – $7 billion over the past two decades – to U.S. taxpayers? In fact, that agency, the Export-Import Bank of the United States (Ex-Im Bank), was reauthorized by a large majority of Congress in 2015. To be sure, the matter was not without controversy. A bipartisan House coalition resorted to a rarely-used parliamentary maneuver in order to force a vote. But when Congress voted, Ex-Im Bank won a supermajority in the House and a large majority in the Senate. For almost two years, however, Ex-Im Bank has been unable to function fully because a single Senate committee chairman prevented the confirmation of nominees to its Board of Directors. Without a quorum

NEI Praises Connecticut Action in Support of Nuclear Energy

Earlier this week, Connecticut Gov. Dannel P. Malloy signed SB-1501 into law, legislation that puts nuclear energy on an equal footing with other non-emitting sources of energy in the state’s electricity marketplace. “Gov. Malloy and the state legislature deserve praise for their decision to support Dominion’s Millstone Power Station and the 1,500 Connecticut residents who work there," said NEI President and CEO Maria Korsnick. "By opening the door to Millstone having equal access to auctions open to other non-emitting sources of electricity, the state will help preserve $1.5 billion in economic activity, grid resiliency and reliability, and clean air that all residents of the state can enjoy," Korsnick said. Millstone Power Station Korsnick continued, "Connecticut is the third state to re-balance its electricity marketplace, joining New York and Illinois, which took their own legislative paths to preserving nuclear power plants in 2016. Now attention should