Nuclear industry expects to get more US loan guarantee authority: NEI
The Nuclear Energy Institute expects that additional nuclear power loan guarantee authority will be approved by Congress in a fiscal 2011 continuing resolution, though NEI President and CEO Marvin Fertel Thursday acknowledged “it’s not going to be easy.”
Fertel told reporters at a briefing in New York that he has been meeting with US senators and representatives for weeks to convince them that nuclear loan guarantees should generate revenue and deserve expansion. An additional $10 billion is needed to fund the three nuclear plant expansion projects that are in negotiations with the US Department of Energy and NEI will be “aggressive” in pursuing that money during fiscal 2011, Fertel said.
A new Congress will focus on cost-cutting and may be tangled in partisan disputes after elections in November changed control of the House of Representatives, Fertel said. “It’s clear this is a high-friction environment,” he said.
DOE announced one conditional nuclear power loan guarantee last year for $8.3 billion to Georgia Power and two partners for its two-unit Vogtle plant expansion near Augusta, Georgia. In addition, South Carolina Electric & Gas is in talks with DOE for a guarantee to help finance the two-reactor expansion of its Summer station, as is NRG Energy for the South Texas Project and EDF subsidiary UniStar Nuclear Energy for a new unit at the Calvert Cliffs site in Maryland.
NEI said the additional $10 billion, which would double the $10 billion in authority remaining after the Vogtle project, would be enough to provide loan guarantees to those three projects. Congress could provide the support through one or more continuing budget resolutions expected to be approved to keep the government running in the absence of full budget for this fiscal year, he said.
“We don’t expect we’re going to see a lot of appropriations discipline,” he said. A continuing resolution may be used to finance government even when the new fiscal year begins on October 1, Fertel said.
House Republicans on Wednesday proposed cutting the budget for energy loan guarantees by $1.4 billion. Fertel said those cuts may end up focusing mostly on non-nuclear guarantees, and there is bipartisan support for nuclear energy.
Fertel said the industry is also lobbying to make the credit subsidy fee more accurately reflect the risk to the government for backing nuclear plant loans.
The current method used to calculate the fee underestimates the amount that could be recovered in case of a default, producing higher fees that hurt merchant nuclear developers, Fertel said during an annual briefing for Wall Street analysts in New York.
The US nuclear industry produced 806.3 billion kilowatt-hours of electricity in 2010, the second highest annual generation rate ever, according to reliminary data, NEI said. It was second only to the record 806.4 billion kWh produced in 2007, NEI said in a statement. Last year’s production was boosted by record December production from nuclear energy, NEI said.
The industry’s average capacity factor in 2010 was 91.1%, again second only to the record 91.8% in 2007, the statement said.
Fertel also said the nuclear industry has been in talks with government to improve the ability of US nuclear companies to compete for foreign nuclear technology business. The initiative will streamline US export control regulations, provide financial incentives to companies expanding the domestic sources for parts and components and ensure that nuclear cooperation agreements with other countries do not include provisions that keep US suppliers from selling to international markets, Fertel said.
Overly-restrictive agreements will cost jobs in the US nuclear industry, he said. NEI is hoping to develop a “Team USA” consisting of companies and government to promote nuclear technology sales to other countries, Fertel said.
-William Freebairn
