17 Apply for DOE Loan Guarantees, Far Exceeding Available Cash

October 2, 2008

Katherine Ling, Greenwire reporter
The Energy Department announced today that it has received 19 applications from power companies seeking federal loan guarantees to build nuclear power plants -- a number much higher than current funding could support.

The total assistance requested by the 17 electric power companies adds up to $122 billion, surpassing by far the $18.5 billion Congress made available in loan support.

The number of projects the $18.5 billion can support is also dwindling as input costs continue to escalate, David Frantz, director of DOE's loan program office, said in a teleconference last week. He said loan guarantees could probably accommodate only about two power plants.

The applications are for construction of 21 new reactors at 14 different U.S. power plants. The estimated total construction costs for all of the projects is $188 billion and the plants would add 28,800 megawatts of generating capacity, according to DOE. The Nuclear Regulatory Commission has received 15 applications for new nuclear power plants in the past year.

Two companies applied for the $2 billion in loan guarantees for the front end of the nuclear fuel cycle, DOE said. The requests combined total $4 billion, according to DOE.

The loan guarantee applications are only the first part of a two-step application process DOE implemented for the nuclear loan guarantees. DOE will assess the applications from the first round and initially rank the applications on chances of getting the guarantee. This will allow companies to decide if they want to invest an estimated $600,000 to put together the second round of applications. Part two applications are due Dec. 19.

DOE said it will judge the applications based on a project's ability to avoid, reduce or sequester air pollutants or greenhouse gas emissions; the length of time to commercialization; chances of repayment of the debt; and "long-lasting success" in the marketplace.

DOE has issued three rounds of solicitations for $42.5 billion in federal loan guarantees for early commercial use of advanced energy technologies that decrease greenhouse gas emissions and improve efficiency as authorized by the 2005 energy law. Congress has mandated that $38.5 billion of the guarantees must be awarded by the end of fiscal 2009, although DOE is trying to extend the timeline through 2011 for nuclear projects and 2010 for others.

DOE has yet to award any loan guarantees, despite having begun the process in 2006.