Sens. hear Chu’s support for role of nuclear power

Energy Secretary Steven Chu sought to reassure skeptical senators about the administration’s position on nuclear power, indicating he may support expanding a loan guarantee program the industry says is needed for its revival.

At a Senate Budget Committee hearing scheduled to discuss the department’s budget, senators spent more time trying to read between the lines about how the White House views nuclear power than they did on the specifics of the $26.3 billion request.

Some senators complained that a $50 billion loan program was removed as part of the $787 billion stimulus package, which President Obama pushed through Congress to jumpstart the economy. Some questioned the administration’s decision to end funding for the Yucca Mountain waste repository. Others noted the president had not mentioned nuclear power in recent addresses outlining his bold energy agenda.

But Chu told senators nuclear power would be an “essential part of our energy mix.”

He reiterated his intention of creating a “blue-ribbon panel” to study the waste issue, which would make its recommendations within a year.

And he said he would be in favor of increasing the size of the loan guarantee program for the industry. Nuclear lobbyists already successfully pushed through an $18.5 billion guarantee program in an energy act passed in 2005. But the department has been slow to implement that program, frustrating both the industry and its patrons on Capitol Hill.

Chu said the recipients of loan guarantees would be announced in the next few weeks.

Nuclear energy advocates say utilities will not be able to get the financing they need, particularly in this economy, without some additional backstop protection from the federal government.

But the industry has a history of cost overruns. Government spending watchdogs and nuclear energy critics have opposed the loan guarantee program in the past for putting taxpayers on the hook for billions of dollars, should the “next generation” of nuclear power plants prove even more expensive than anticipated.

An application for a new nuclear power plant had not been requested at the Nuclear Regulatory Commission in more than three decades. Now the NRC is reviewing 31 applications. Nuclear power’s long-promised renaissance may be on the verge of actually happening, in part because of efforts to reduce carbon dioxide emissions. Unlike coal-fired or natural-gas electric utilities, nuclear power plants do not emit carbon dioxide when operating.

In addition to the $26.3 billion request, the Energy Department was also a major beneficiary of the recently signed stimulus, which provided a little less than $40 billion to the department. That money includes $5 billion to weatherize homes of low-income families, $4.5 billion to make federal buildings more energy-efficient and $3.4 billion for “clean coal” efforts.

Chu described a process the department had established to ensure the money would be spent quickly and effectively.

At the hearing, Obama’s proposal to place a cap on carbon dioxide and other greenhouse gas emissions also drew some complaints. Through an open market, companies would trade allowances to help them meet their targets, generating an anticipated $645 billion in revenues between the start of the program in 2012 and the last year of the budget in 2019.

Sen. Lindsey GrahamLindsey GrahamSenate rejects ObamaCare repeal, replacement amendment Trump turns up heat on AG Sessions over recusal OPINION | McConnell attempt to butcher ObamaCare is political malpractice MORE (R-S.C.) criticized the plan for auctioning off all of the emission allowances. Other climate change proposals would give some allowances away to help minimize the costs to businesses.

Sen. Ron WydenRon WydenOvernight Finance: House votes to repeal arbitration rule | Yellen, Cohn on Trump's list for Fed chief | House passes Russia sanctions deal | GOP centrists push back on border wall funding Senators urge quotas on Canadian lumber, consultations with Congress Pressure on Trump grows as Kushner is questioned MORE (D-Ore.), meanwhile, said the cap-and-trade proposal did not do enough to offset an anticipated growth in energy costs for another constituency: lower-income consumers.

Although the administration would direct the bulk of the revenues expected from a cap-and-trade system, Wyden said more money needed to be directed to the poor, perhaps through public assistance programs. He said he could not support the cap-and-trade proposal as written in Obama’s budget blueprint.