A one-sentence provision buried in the Senate's recently passed energy bill, inserted without debate at the urging of the nuclear power industry, could make builders of new nuclear plants eligible for tens of billions of dollars in government loan guarantees.
Lobbyists have told lawmakers and administration officials in recent weeks that the nuclear industry needs as much as $50-billion in loan guarantees over the next two years to finance a major expansion.
The provision has the potential to dramatically expand the nuclear industry, which plans to build 19 new power plants at an estimated cost of about $4-billion to $5-billion apiece. Progress Energy plans to make a final decision next year on if will build a new plant in Levy County.
Industry executives insist that banks and Wall Street will not provide the money needed to build new plants unless the loans are guaranteed in their entirety by the federal government. Power companies currently have plans for 28 new nuclear reactors at 19 power plants around the country.
Many experts fear the proposed subsidies for new nuclear plants could leave taxpayers responsible for billions of dollars in soured loans.
"Such projects, by their nature, pose significant technical and market risks," warned the nonpartisan Congressional Budget Office in an analysis of the provision last month. "Studies of the accuracy of cost estimates for pioneering technologies have found that estimates are consistently low."