WASHINGTON—President Barack Obama is poised to ask Congress to agree to $9 billion more in loan guarantees for the nuclear energy industry, a Democratic aide said Thursday, in a renewed push for nuclear power as the growing oil spill in the Gulf of Mexico highlights the risks of fossil fuel production.
Also Thursday the Energy Department announced a $2 billion loan guarantee for French-owned nuclear services company Areva Inc. to support construction of a uranium enrichment plant in eastern Idaho.
At the insistence of Democratic House Speaker Nancy Pelosi of California, the request for more spending on nuclear energy would be coupled with $9 billion in loan guarantees for renewable energy such as wind and solar, according to the Democratic aide, who spoke on condition of anonymity before a formal announcement from the White House.
The request would be tacked onto a multibillion-dollar spending bill for Afghanistan, Haiti and other programs that Congress is expected to finish after Memorial Day. Taxpayers would have to pay $180 million to support the loan guarantees, essentially putting up insurance for nuclear companies that would have trouble borrowing money to build new plants without the federal backing.
The new spending follows $18.5 billion in nuclear loan guarantees the Obama administration announced in February to spur building of the first nuclear power plant in the U.S. in almost three decades, part of a broad shift to lessen dependence on foreign oil and reduce the use of other fossil fuels blamed for global warming. Obama called for "a new generation of safe, clean nuclear power plants" in his State of the Union speech this year.
Some $8.3 billion of the money announced in February was for helping Southern Co. build new reactors in Burke, Ga. Energy Department officials have said the remaining loan guarantee authority was only enough for one project, and there had been several other finalists before Southern Co. was selected.
Mitch Singer, a spokesman for the Nuclear Energy Institute, an industry group, said Thursday that the additional loan guarantee funding should give the Energy Department "most, if not all, the resources needed to grant conditional loan guarantees to the other finalists." They were Constellation Energy Group Inc. of Baltimore, Md., NRG Energy Inc. of Princeton, N.J., and SCANA Corp. of Cayce, S.C.
Along with the loan guarantees for nuclear and alternative energy projects, the administration also will use the upcoming spending bill to restore $2 billion to a $6 billion alternative energy program initiated by last year's economic stimulus bill, the Democratic aide said. That's another priority for Pelosi. The money had been borrowed for the "cash for clunkers" program.
Separately Obama has requested Congress to authorize even more money for nuclear loan guarantees in his budget request for 2011.
The new loan guarantee request was first reported by Politico.