The report on the omnibus bill says the Energy Department should guarantee, among other things, $18.5 billion in loans for new nuclear plants, $10 billion for renewable energy and efficiency, $6 billion for carbon capture at coal plants and $2 billion for uranium enrichment.The $18.5B would go towards the construction of potentially 3-5 new nuclear plants. Keep in mind, though, this is not actual money the industry is receiving. The monies are a "guarantee" the bankers (the ones who provide the loans for a new plant) receive their payments in case an electric company defaults on a new nuclear plant. Critics, though, don't seem to understand how the loan guarantee program works:
But Peter Bradford, a policy adviser and former member of the Nuclear Regulatory Commission, said that the fees are "a pittance compared to the taxpayer exposure" and that "scoring the loan guarantees at zero is financial chicanery of a low order."
Bradford said electricity customers "spent tens of billions of dollars saving nuclear power plant owners from large losses, even bankruptcy" during the 1990s. "The loan guarantees arrange the next multibillion-dollar rescue before the fact and charge it to taxpayers instead of customers," he added.
Mr. Bradford obviously hasn't read the posts on loan guarantees by Richard Myers. Otherwise, he would know electric companies who build a nuclear plant are taking a greater risk with their shareholders' money then the government is with taxpayers' dollars. From Myers:
We can’t speak for the other nine technologies eligible for loan guarantees, but in the case of new nuclear plants the probability of default is pretty close to zero. Why? Because the companies building these new nuclear power plants will have one billion dollars or more of their own equity (actually, their shareholders’ money) invested in the project, side-by-side with the guaranteed debt. In the event of default, the company loses that investment: The government will seize it to help repay the loan. There’s not an electric power company in the
that can sustain a billion-dollar loss on a single project. That’s why these projects are so well-planned. Why all necessary safety and regulatory approvals are obtained before construction begins. Why due diligence is so disciplined and exhaustive. Why successful completion and operation is (forgive the word) guaranteed. United States
This is one of those rare cases when the public interest and the private sector’s interest are perfectly aligned, when both parties have a single common interest in success.
That pretty much sums it up.