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Nuke Plant Guarantees Out of Energy Bill
Plan to Help Nuclear Plants With Loan Guarantees Shelved As Part of Congress' Energy Bill

The Associated Press


WASHINGTON Sept. 9

A plan to help build nuclear power plants with federal loan guarantees has been shelved as part of Congress' energy bill, according to supporters of the program.

Still, lawmakers are continuing to discuss ways to help the nuclear industry develop the next generation of reactors, including expansion of government-sponsored research and tax benefits for such plants, according to people involved in the discussions.

The proposed loan guarantees had been included in legislation the Senate was considering but fell by the wayside when that version was abandoned in favor of one that contained only modest help for the industry.

As House and Senate negotiators work out final energy legislation, Sen. Pete Domenici, R-N.M., has said he hopes to restore many proposals to help the nuclear industry that were in his earlier bill.

But no longer are the loan guarantees an option, a senior GOP staff member involved in the discussions said, speaking on condition of anonymity. Industry officials also acknowledged Tuesday that the focus was on other kinds of help to spur new reactor construction.

Domenici, who is chairing the energy discussions, also has pledged not to pursue a separate provision that would require the government to purchase a certain number of power reactors that are built.

Many Democrats have characterized the loan guarantees as a boondoggle for the nuclear industry that could cost taxpayers billions of dollars. And conservative Republicans, including Sen. John Sununu, R-N.H., have objected in general to the government helping industry finance the building of power plants.

Still the subsidies had substantial support. An attempt in July by Sununu and Sen. Ron Wyden, D-Ore., to strip the loan guarantees was beaten back by a vote of 50-48.

Domenici has said he plans to pursue other types of assistance to try to jump-start construction of new reactors. No utility has tried to build a nuclear power plant since the 1979 Three Mile Island accident, although several companies have filed papers with the Nuclear Regulatory Commission expressing an interest in a new-design reactor if economic conditions are right.

Among the issues still being discussed are Domenici's proposed $865 million research effort into ways to reduce the volume of reactor waste that will have to be buried at a repository in Yucca Mountain in Nevada. Critics maintain the so-called "transmutation" a chemical process separating the most highly radioactive isotopes from the waste poses nuclear proliferation risks.

Also still on the table is a proposal for the government to build a $1.1 billion reactor in Idaho that could produce hydrogen.

Industry lobbyists are searching for alternatives to the loan guarantees such as tax credits for electricity produced from such reactors, and accelerated depreciation for building them.

Domenici and other nuclear industry supporters hope such approaches would be viewed more favorably than the loan guarantees, which became a focus for criticism of the entire nuclear package in the earlier Senate bill.

Wyden had argued that the debate was not about nuclear power but whether "to put at risk the taxpayers of this country" if the reactor projects failed. Sununu questioned why any power plants should get such a subsidy.

Copyright 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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