Industry Support Under Review as Senate Preps Energy Bill

March 16, 2009 - Katherine Ling, E&E reporter
The Senate Energy and Natural Resources Committee will discuss the economics and progress of U.S. nuclear energy development at a Wednesday hearing.
Chairman Jeff Bingaman (D-N.M.) intends to introduce a comprehensive energy bill within the next three weeks. Republicans have raised the question of nuclear power at every committee hearing related to energy policy thus far in an attempt to force the issue.
For instance, ranking member Lisa Murkowski (R-Alaska) has argued that nuclear power should be considered as part of a national standard for electricity generated by renewable energy, known as a renewable electricity standard (RES). "It's important that we recognize the potential contribution of non-fossil fuel energy sources that are carbon neutral," Murkowski said in a recent statement.
In a hearing last week on transmission siting, Sen. John McCain (R-Ariz.) pressed acting Federal Energy Regulatory Commission Chairman Jon Wellinghoff on whether nuclear energy should be counted as renewable energy and Wellinghoff said it should not.
"Remarkable," replied McCain, shaking his head.
Many Republicans -- and some Democrats -- argue that as nuclear energy is the only base-load carbon-free form of generation, many new reactors need to be built to ensure electricity reliability while curbing global warming and the government should be providing similar support for nuclear energy as renewable energy.
When the committee marks up Bingaman's bill, Republicans are likely to introduce an amendment to expand the definition of renewable energy to include nuclear energy. With other nuclear-related amendments likely, it is important for the committee to understand what nuclear industry experts say is necessary as lawmakers proceed, according to a spokesman for Bingaman.
Loan guarantees
The issue that appears to top the nuclear industry's list is a significant boost or even no limit to how much the government can provide for loan guarantee authority for nuclear projects. Congress has set aside $18.5 billion for nuclear energy loan guarantees, an amount the industry says is inadequate.
"The loan guarantee program is as essential today as it was in 2005, and we believe that the U.S. energy and environmental challenges justify a significant expansion of the program," said Marvin Fertel, Nuclear Energy Institute president and CEO, in a statement to the committee.
Sen. Bob Bennett (R-Utah) tried to provide another $50 billion in loan guarantee authority for all advanced low carbon technologies in the economic stimulus bill but an outcry from environmental groups and a need to cut the bill's price tag left the provision on the cutting room floor after the House-Senate conference.
In the first round of DOE's solicitation, companies applied for $122 billion in loan authority and the $18.5 billion will likely only provide enough for three applications at the most. The cost for a new nuclear reactor is estimated to be $6 billion to $8 billion, on average, although some estimates have estimated as high as $14 billion.
NEI has also suggested the legislation include the creation of a "clean energy bank" to provide for more efficient and ongoing support for advanced low carbon emitting technology. Bingaman said he is considering such an institution in his legislation, as well as language to streamline and support the current DOE loan guarantee program.
But Thomas Cochran, senior scientist at the Natural Resources Defense Council, says providing more government support for nuclear energy is an "economically inefficient way to mitigate climate change." It will penalize and slow investment in energy efficiency and other low carbon energy generation that could reduce greenhouse gas emissions "in less time, with less cost and risk," he told the House Science and Technology Committee last April.
Cochran says funding the expansion of nuclear power will also encourage other countries to build nuclear power plants that may not have the ability to put necessary safeguards in place. And he adds the Nuclear Regulatory Commission is not providing a proper example of a "safety culture" in the United States for other countries to emulate.
NRC regularly consults with emerging nuclear countries, and safety and security at the nation's 104 nuclear reactors is its top priority, Chairman Dale Klein has said repeatedly.
Klein, who will also testify at the hearing, may also be asked about the status of NRC's review of the 17 new reactor license applications currently before the commission. NRC has encountered some issues with the review as many of the applications depend on reactor technology that has yet to be certified by NRC and companies continue to make other changes to their applications.
Schedule: The hearing is Wednesday, March 18, at 9:30 a.m. in 366 Dirksen.
Witnesses: Dale Klein, chairman, NRC; Marvin Fertel, president and CEO, Nuclear Energy Institute; and Thomas Cochran, senior scientist, Natural Resources Defense Council.