Walking the Walk on Nuclear?

by Christopher Guith

Press reports indicate that Obama Administration is asking Congress for an additional $36 billion in authorization for nuclear loan guarantees in today’s FY2011 budget submission, bringing the total available for new nuclear power plants to $54 billion. This follows President Obama’s first unequivocal statement of support for the expansion of domestic nuclear power in his State of the Union Address on Monday night. Although the Administration’s early record on nuclear has been checkered—at best—increasing the loan guarantee authority could be an indication that the President is ready to walk the walk on supporting nuclear.

Of course, it is just a first step, because simply having the potential to offer these loan guarantees is not enough. Such authority has existed for upwards of three years. If the administration is truly serious about expanding nuclear power it must reign in its Office of Management and Budget (OMB) and ensure the terms of these guarantees are transparent and reasonable. To date it still seems apparent that OMB’s terms are neither, but it is not clear because of the lack of transparency. What we do know is that no conditional guarantee has been issued, even after the Energy Department said it would have the first one wrapped up by the end of 2009.

Still, progress should always be welcomed, and it appears that it is being made at least on loan guarantees. If Congress complies with the President’s request—no certainty given the hostility that a similar effort faced during debate on the stimulus bill--this still nascent program would triple its guarantee volume. While streamlining of the licensing process, regulatory certainty, and expansion of the domestic manufacturing base are priorities for the industry, workable and available loan guarantees continue to be the single most important and effective policy mechanism available to facilitate the construction of new reactors in the U.S. The Administration’s request to bring the authorization total up to $54 billion, potentially covering as many as 10 or new reactors, is a tremendous first step towards the balanced energy and climate policy that Senator Obama campaigned on.

Let’s hope that the decision on loan guarantees is just the first piece of evidence that the Administration is truly ready to walk the walk on nuclear energy.