Ups and downs in US budget bill
18 December 2007
A year-end spending bill has slashed the yearly budget for Yucca Mountain nuclear waste repository by $104 million, putting the project schedule in further doubt. It has also increased the amount of new plant loans to be guaranteed.
The Omnibus Appropriations Bill is expected to be approved by Congress this week. In it, legislators directed the Department of Energy to provide $20.5 billion in loan guarantees to nuclear power projects over two years.
Under the Energy Policy Act of 2005 loan guarantees were put forward for any innovative energy technology that avoids, reduces or sequesters greenhouse gases. After some revision, the DoE announced in October that it would guarantee up to 100% of the value of a loan for such a technology project, so long as that loan did not exceed 80% of the project cost.
To win a loan guarantee, a nuclear investor would have to pay a certain amount representing the risk the government was taking on guaranteeing the loan. This charge is meant to make the program of guarantees self-financing. The federal government would not expect to help a nuclear investors repay their loans unless that company failed.
Significantly, $2 billion of the $20.5 billion nuclear total is earmarked for uranium enrichment investments. This was called for in June by USEC, a uranium enrichment company developing a new centrifuge-based production plant.
But while congressmen have been kind to nuclear power and other low-carbon technologies, the bid to solve the long-term nuclear waste issue was set back by the bill.
Officials on the Yucca Mountain radioactive waste repository project were looking forward to submitting a licence application to nuclear safety regulators at the end of June 2008 - ten years after the store was originally meant to begin operation. Meeting that deadline would keep alive the plan to construct and begin operating the store by 2017.
However, this deadline looks in doubt as opponents of the scheme, notably Senator Harry Reid of host state Nevada, succeeded in cutting the project's FY2008 budget from $494 million to $390 million, the lowest award since 2002 when the Yucca Mountain site was approved.
The lower rate of funding continues a trend of recent years in which awards have been $100 million, $156 million and $312 million below requests in FY2007, FY2006 and FY2005.
Edward Sproat, director of the DoE's Office of Civilian Radioactive Waste Management has repeatedly warned of delays to the program if budget requests were not met at this crucial time.
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