S. Texas' hopes for new nuclear funds vanish
If the companies looking to build as many as four new nuclear reactors in South Texas are going to succeed, they're going to have to do it without a massive infusion of federal financing from the stimulus package.
Several sources in Washington have confirmed a proposed $50 billion that could have been used for nuclear loan guarantees was removed from the stimulus package Wednesday during negotiations between the House and Senate.
The money would have tremendously increased the pot of loan guarantees that most in the industry say are necessary for the multibillion-dollar nuclear projects to go forward.
There currently is $18.5 billion available, but 17 companies applied for loan guarantees totaling $188 billion.
These include San Antonio's CPS Energy, which is partnering with New Jersey-based NRG Energy to build two new reactors at the South Texas Project in Bay City. Exelon Energy, which wants to build two nuclear reactors in Victoria, also is seeking federal backing for its projects financing.
“We certainly were disappointed that the loan guarantees were removed,” said Craig Nesbit, Exelon vice president of communication. “We'll look for other avenues to shore up the loan guarantee program. The $18.5 billion, it's clearly inadequate if you believe that nuclear power has a role to play in reducing greenhouse gases.”
Wednesday's action was the latest in the battle over the potential resurgence of the nation's nuclear industry, which has been at a standstill since the accident at Three Mile Island in Pennsylvania the late 1970s.
Recent emphasis on energy security and the need to find power sources that don't emit greenhouse gases has helped revive interest.
Opponents cite worries about the billions nuclear power plants will cost — there still are no solid cost estimates for the South Texas projects — and the chance that energy companies could default on guaranteed loans, leaving taxpayers holding the bag.
Other foes have concerns about problems associated with storing nuclear waste and potential safety issues.
The debate has become increasingly contentious in both Washington and South Texas, and both sides predict the discussions will intensify with the oncoming debate over the nation's energy policy.
“The nuclear industry is not going to give up until they get what they want,” said Michele Boyd of Physicians for Social Responsibility, a group opposed to nuclear power. “The program is just a monster, and it will only get worse.”
Mitch Singer of the Nuclear Energy Institute said many of the groups opposing nuclear loan guarantees are being hypocritical because they don't oppose the tens of billions of dollars in loan guarantees in the stimulus package earmarked for renewable energy sources like wind and solar.
“The loan guarantees are important primarily because it acts as a catalyst for new technology, new plants and clean energy technology to access capital at a reasonable rate,” he said. “It's an interesting juxtaposition. They don't seem to have a problem with any kind of economic stimulus for their preferred technology.”
It's unclear what impact Wednesday's decision will have on CPS Energy's proposal to build two more nuclear plants in Bay City.
Officials with the utility and partner NRG contend their project is in good position to capitalize on the existing pot of loan guarantees. The Energy Department is expected to release its next round of ranking of projects looking to qualify for the financial backing by May.
“The $18.5 billion that is already there, we still feel very good about our chances to get that from the Department of Energy,” said Mike Kotara, CPS Energy executive vice president of energy development. “Fifty billion would make our chances even better.”