Washington (Platts)--8Jun2007

The nuclear power industry would be unable to qualify for US Department
of Energy loan guarantees for new reactors in fiscal 2008 under a funding
bill approved by the House Appropriations Committee this week. 

     Deputy Energy Secretary Clay Sell Friday said the decision, should the
full House and Senate agree with it, would hurt Bush administration and
industry efforts to revive nuclear power in the US.

     In an interview Friday, Sell said DOE was concerned about the
committee's decision to cut DOE's funding requests for the Nuclear
Power 2010 and the Global Nuclear Energy Partnership programs, two other
initiatives that the administration considers critical to nuclear power
expansion.

     "There is an increasing consensus in this country and in this Congress,
among Republicans and Democrats, that nuclear power must be an increasing part
of the energy future. And that's progress," Sell said. "Yet on the issue of
new plant construction, which we're desperately trying to get going, there are
critical problems."

     In passing the bill on Wednesday, the committee approved $7 billion for
loan guarantees in the fiscal year that begins on October 1, $2 billion less
than DOE requested. Of the $7 billion, the panel allocated $2 billion to coal
power plants that employ carbon sequestration, $4 billion to plants that
manufacture biofuels and "clean" transportation fuels and $1 billion for new
technologies for electric transmission facilities and renewable energy power
systems.

     "The committee specifically cut nuclear projects out of the loan
guarantee program," Sell said. 

     The Energy Policy Act of 2005 authorized the loan guarantee program to
support commercial application of innovative technologies, including advanced
nuclear energy facilities. Congress allowed $4 billion in loan guarantees this
year, pending completion of a DOE rulemaking spelling out how the program will
operate. 

     While DOE has called the loan guarantees key to the construction of
advanced reactors, the department excluded them from the program's inaugural,
2007 round to allow more time for the devolpment of nuclear technologies. The
department has received 143 pre-applications requesting more than $27 billion
in loan guarantees for biomass, solar, energy efficiency and other projects.

		--Bill Loveless, bill_loveless@platts.com