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Energy Department issues loan-guarantee rules
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The U.S. Energy Department issued proposed regulations for a loan-guarantee program for new, eco-friendly energy projects, like nuclear.
The money – $13 billion between the 2007 adopted and 2008 requested fiscal years’ budgets – would give financial backing to energy projects that haven’t made it to the market. Eligible projects, in part, would use new technology to “avoid, reduce or sequester” greenhouse-gas emissions, the 2005 Energy Policy Act states.
The guidelines, which the department released Thursday, have to be made final before it can give federal backing to the loans. The Notice of Proposed Rulemaking is available for public comment in the Federal Register.
One of the more controversial parts of the regulations has been mixed interpretation of the Act. The department’s rules allows a guarantee of up to 90 percent of loans for a given project, though not more than for 80 percent of the total cost of the project.
Nuclear companies, specifically, were worried they wouldn’t get enough federal backing for the needed loans on the $3 billion to $4 billion price tag to build a nuclear plant. Previous government interpretation was to cover only 80 percent of the loans for the project.
“Given the complexity of the financing issues for capital-intensive power projects, NEI will need to review these proposed regulations in-depth and consult with our member companies before commenting on the substance of the proposals,” Richard Myers, vice president of policy development for the Nuclear Energy Institute, the industry’s trade arm, said in a release shortly after the department’s announcement.
“This demonstrates our desire to foster implementation and commercialization of new, environmentally friendly technologies that will reduce emissions and strengthen our energy and economic security,” Energy Secretary Samuel Bodman said. “This program will support promising energy technologies that will help encourage increased use of cleaner sources of energy worldwide.”
The FY2008 proposed $9 billion in backing will be apportioned among new nuclear or clean-coal plants – $4 billion – another $4 billion for fuels and $1 billion for transmission and power generation, according to a department statement.
UPI
10 May 2007
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