US DOE Official: All 3 Leading Nuclear Projects May Get Funding

By Siobhan Hughes

Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- The U.S. Energy Department could potentially offer subsidies to all three of the leading nuclear-power projects that have applied for loan guarantees if the U.S. Senate approves funding for $9 billion in additional loan guarantees, a top official said on Wednesday.

Scana Corp. (SCG), NRG Energy Inc. (NRG) and Constellation Energy Group Inc. (CEG) have all applied for loan guarantees for nuclear projects. The Department of Energy currently has the capacity to award only about $10 billion in nuclear loan guarantees--enough for only one project. The House has tucked funding for an additional $9 billion in loan guarantees into a war-spending bill. If the Senate goes along, the Energy Department could offer a guarantee to more than one company.

"If you look at the total funds, that begins to look like you could do all three of them," Matt Rogers, a senior adviser at the Energy Department, told reporters on Wednesday after testifying before a House panel.

"That doesn't mean that each of them is ready to go," he said. "If one of them is ready to go but ultimately decides it actually has to be a lot bigger than we originally thought, that could change the equation.

"It's a competitive process; we do have to take them one at a time and make the choices as they mature and as they're really ready," he added.

The statements point to the complicated dynamics involved in supporting the nuclear-power industry, which President Barack Obama has backed as part of an effort to reach out to Republicans and build support for broader climate legislation.

In February, Southern Co. (SO) became the first company to receive a nuclear-power loan guarantee from the Energy Department. Under the loan guarantee program, the government pledges to cover a company's debt obligations if the company defaults on loans used to finance a new nuclear-power project. Because building a nuclear-power plant is a massive, multibillion-dollar undertaking, loan guarantees can be key to financing such projects.

-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; siobhan.hughes@dowjones.com

(Christine Buurma contributed to this article.)

(END) Dow Jones Newswires

July 14, 2010 20:23 ET (00:23 GMT)

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