Wednesday, February 11, 2009

Loan Guarantees in the "American Recovery and Reinvestment Act" of 2009

Today might be the day we find out if $50B in loan volume for the existing loan guarantee clean energy program makes it into the final "stimulus" bill. The Conference Committee members are supposed to meet at 3 pm today to iron out the details.

As promised last week when I explained how the loan guarantees were scored, below is page 20 (out of 69 pages) from the Congressional Budget Office's detailed version of the Senate's final "stimulus" bill. A summary of the costs of the stimulus bill can be found here (pdf).

loan guarantees stimulus billWhat I'm going to discuss below is what's in the table above. (Click on the image to expand.) The "Account Total for Title 17 innovative technology loan guarantee program" shows $9,000M in Budget Authority (BA) for all energy loan guarantees. A week ago it was $10B but was one of the provisions that changed to get the votes of three Republican Senators.

Right above the "Account Total" is the "Supplemental Emergency" budget authority which shows that $500M is to be appropriated to the existing loan guarantee program to provide $50 billion in loan volume. And then right above that is the $8,500M to be appropriated to "sec.1705 loans" which are the renewable energy projects and the transmission lines necessary to bring that renewable energy to market. These loans are separate from the existing loan guarantee program and were one of the specific provisions cut by $1B to pass the Senate.

According to CBO's page above, $50B in loan volume for the current loan guarantee program is expected to cost the taxpayers $500M (NEI, however, doesn't believe it will cost taxpayers anything (pdf)). The $50B in loan volume goes to all projects that "avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases and employ new or significantly improved technologies as compared to technologies in service in the United States at the time the guarantee is issued." Any renewables and transmission lines, however, will receive a separate $8.5B in appropriation to support $56B-$85B in loan volume. (I don't have the documentation yet, but the word is that this $8.5B in appropriation scores at 10-15 percent of the loan volume.)

The House's "stimulus" package does not include any budget authority for the existing loan guarantee program. Since the House and Senate versions don't match on this topic, the Conference Committee members will need to agree on whether the $50B in loan volume should be included or not. This will be a battle because certain House members on the committee don't want it in there.

Now that it's hitting crunch time, I ask that if you're a proponent of the nuclear energy industry, please call the Senate and House conference committee members to indicate your support for $50B in loan volume for the existing loan guarantee program! [And while you're at it, sign up with the Nuclear Advocacy Network.]

If you're interested in the many benefits loan guarantees could provide, then see our policy brief on Financing New Nuclear Plants (pdf).

Update 5:10 pm: Mr. Joseph Romm has a different take on what these loan guarantees mean at AlterNet and Climate Progress (they're identical posts). I left the same comment at his blog, Climate Progress, as the one at AlterNet...we'll see if he approves it on his own blog. :-)

Update 8:00 pm: My comment never showed up on Romm's blog (big surprise) but it was the first one on his Gristmill post.

Update 2/12, 5:30 am: Sad news, the $50B in loan volume for the existing loan guarantee program was stripped from the final bill. :-(

Well, there's always the next piece of legislation...

4 comments:

Start Loving ... WAGE LOVE OR DIE (no 3rd option any longer exists) said...

Friend. Nice work. Do you know if it is still in - the $50 billion loan guarantees? Suggestions in how to make sure it dies?

Joseph said...

Isn't Joseph Romm the same person who counts nuclear subsidies in terms of total amount since the technology was invented and wind subsidies in terms of cost per day per household?

gunter said...

The $50 billion in loan guarantees was cut out of the stimulus bill.

Marcel F. Williams said...

The Democrats caved in to 'Friends of the Earth' and the Republicans including the senator who proposed the 50 billion in additional loan guarantees refused to vote for the stimulus package even with the loan guarantees for the nuclear industry.

I never liked the loan guarantee program since I believe that states and utilities should get direct Federal loans for building new reactors. But I'm more concerned about the chilling effect that this could have on the US nuclear industry and even more importantly, on our economy and on our environment.

This was pure politics over science and a severe set back for our environment and our economy. The Democrats and the Republicans should be ashamed of themselves for playing politics with our future!

Marcel F. Williams