Creating one or more infrastructure banks is a vintage Democratic Leadership Council recommendation.

[bananas]

27. How "nuclear loan guarantees" became actual taxpayer loans.

https://en.wikipedia.org/wiki/Nuclear_Power_2010_Program

The "Nuclear Power 2010 Program" was launched in 2002 by President George W. Bush in order to restart orders for nuclear power reactors in the U.S. by providing subsidies for a handful of Generation III+ demonstration plants. The expectation was that these plants would come online by 2010, but this expectation was not met.

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https://en.wikipedia.org/wiki/Energy_Policy_Act_of_2005

The Energy Policy Act of 2005 (Pub.L. 109–58) is a bill passed by the United States Congress on July 29, 2005, and signed into law by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems, changed US energy policy by providing tax incentives and loan guarantees for energy production of various types.

Public Utility Holding Company Act of 1935 was repealed, effective Feb 2006, by the passing of this act.[2]

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it includes nuclear-specific provisions;[9]

- it extends the Price-Anderson Nuclear Industries Indemnity Act through 2025;
- it authorizes cost-overrun support of up to $2 billion total for up to six new nuclear power plants;
- it authorizes production tax credit of up to $125 million total a year, estimated at 1.8 US¢/kWh during the first eight years of operation for the first 6.000 MW of capacity,[10] consistent with renewables;
- it authorizes loan guarantees of up to 80% of project cost to be repaid within 30 years or 90% of the project's life [1];
- it authorizes $2.95 billion for R&D and the building of an advanced hydrogen cogeneration reactor at Idaho National Laboratory [2];
- it authorizes 'standby support' for new reactor delays that offset the financial impact of delays beyond the industry's control for the first six reactors, including 100% coverage of the first two plants with up to $500 million each and 50% of the cost of delays for plants three through six with up to $350 million each for [3];
- it allows nuclear plant employees and certain contractors to carry firearms;
- it prohibits the sale, export or transfer of nuclear materials and "sensitive nuclear technology" to any state sponsor of terrorist activities;
- it updates tax treatment of decommissioning funds;

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https://en.wikipedia.org/wiki/Public_Utility_Holding_Company_Act_of_1935

The Public Utility Holding Company Act of 1935 (PUHCA),[1] also known as the Wheeler-Rayburn Act, was a law that was passed by the United States Congress to facilitate regulation of electric utilities, by either limiting their operations to a single state, and thus subjecting them to effective state regulation, or forcing divestitures so that each became a single integrated system serving a limited geographic area. Another purpose of PUHCA was to keep utility holding companies that were engaged in regulated businesses from engaging in unregulated businesses.

On August 8, 2005, the Energy Policy Act of 2005 passed both houses of Congress and was signed into law, repealing PUHCA.

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PUHCA was one of a number of trust-busting and securities regulation initiatives that were enacted in response to the government investigations of the Wall Street Crash of 1929 and ensuing Great Depression, which included the collapse of Samuel Insull's public utility holding company empire. By 1932, the eight largest utility holding companies controlled 73 percent of the investor-owned electric industry.[2] Their complex, highly leveraged, corporate structures were very difficult for individual states to regulate.

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http://www.neimagazine.com/features/featurehow-much-/

How much?
20 November 2007

For some utilities, the capital costs of a new nuclear power plant are prohibitive.

Just before the release of the US Energy Information Administration’s (EIA’s) Annual Energy Outlook 2005 (AEO 2005) the then senior vice president of nuclear generation and chief nuclear officer at the Nuclear Energy Institute (NEI), Marvin Fertel, told the Senate Energy and Natural Resources Committee that the assumptions made on new nuclear plant construction were erroneous. The EIA had assumed overnight capital costs of $1928/kWe, which Fertel claimed were “unrealistically high, and inflated.”

The EIA, Fertel said, “assumed that new nuclear plants would experience the same delays, lengthy construction periods and high costs experienced by some of the plants built in the 1980s and 1990s.” These assumptions were unrealistic owing to advances in construction techniques and new simplified, standardised plant designs. More realistic overnight capital cost estimates of new nuclear were of the order of $1400-1500/kWe for the first-of-a-kind and $300 less for the nth-of-a-kind, he claimed.

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There are many other figures available, including the June 2007 report by The Keystone Center, titled Nuclear Power Joint Fact-Finding. This study, which was funded by several nuclear plant operators as well as other interested parties including General Electric and NEI, estimates overnight costs of $2950/kWe (in 2007 dollars). With interest, this figure translates to between $3600/kWe and $4000/kWe.

Interestingly, when Nuclear Power Joint Fact-Finding was released, the nuclear industry press chose to either focus on other aspects – in particular the ‘finding’ that nuclear is a viable option for dealing with climate change – or ignore the report altogether. Considering the number of organisations involved in the nuclear industry that backed the report, this low level of coverage is anomalous, and suggests a certain amount of discomfort with the findings.

However, prohibitively high though it may at first appear to be, even the figure for new build costs in The Keystone Center report is considered too low by some observers.

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http://blogs.wsj.com/environmentalcapital/2008/05/12/its-the-economics-stupid-nuclear-powers-bogeyman/?mod=WSJBlog

May 12, 2008, 1:59 PM ET

It’s the Economics, Stupid: Nuclear Power’s Bogeyman

By Keith Johnson


It turns out nuclear power’s biggest worry isn’t Yucca Mountain, Three Mile Island ghosts, or environmental protesters. It’s economics.

Costs: You ain’t seen nothing yet.

Rebecca Smith reports today in the WSJ (sub reqd.) on the biggest hurdle to the nascent nuclear-energy revival in the U.S.—skyrocketing construction costs. Though all power sectors are affected to different degrees by rising capital costs, nuclear power’s vulnerability puts it in a class by itself. Notes the paper:

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Over the last five years, cost estimates for new nuclear power plants have been continually revised upward. Even the bean counters can’t keep pace. The paper notes:

Estimates released in recent weeks by experienced nuclear operators — NRG Energy Inc., Progress Energy Inc., Exelon Corp., Southern Co. and FPL Group Inc. — “have blown by our highest estimate” of costs computed just eight months ago, said Jim Hempstead, a senior credit officer at Moody’s Investors Service credit-rating agency in New York.

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The Congressional Budget Office just finished a rosy-glasses report on nuclear economics. Even while acknowledging that historical costs for nuclear plants always doubled or tripled their initial estimates, the CBO took heart from promises made by manufacturers of next-generation reactors and a single on-time and on-budget project in Japan to project cheaper nuclear construction costs in the future. And if those cost estimates are wrong? From the CBO:

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http://www.nirs.org/press/02-17-2010/1

FOR IMMEDIATE RELEASE
February 17, 2010

CONTACT
Michael Mariotte, NIRS 301-270-6477 12

Nuclear Loan Guarantees Aren’t Just Guarantees: They are Actual Taxpayer Loans

President Obama’s announcement yesterday of a “conditional” $8.3 billion loan “guarantee” to the Southern Company for construction of two nuclear reactors in Georgia obscured an important fact about the loan guarantee program: taxpayers are not just providing a guarantee, they also will be providing the actual loans.

According to a press release from Southern Company yesterday, “Total guaranteed borrowings would not exceed 70 percent of the company's eligible projected costs, or approximately $3.4 billion, and are expected to be funded by the Federal Financing Bank.” (Note: the discrepancy in amounts--$3.4 billion vs $8.3 billion, is because Southern Company is only a partial owner of the two reactors, the rest of the funds will go to the other owners).

The Federal Financing Bank (FFB) is a little-known government entity that more typically makes loans to universities, colleges, rural electric co-ops and other small-scale projects. Interest rates from the FFB may be lower than offered by private financial institutions. Use of the FFB means that the loans themselves for new reactor construction will come from taxpayers, putting taxpayers in the risky business of both providing the loans and guaranteeing to themselves that the loans will be repaid.

Similarly, UniStar Nuclear, which is said to be on the Department of Energy’s “shortlist” of loan guarantee applicants, states in its license application to the Nuclear Regulatory Commission, “It is expected that, with respect to the portion of the debt guaranteed by the Department of Energy under the loan guarantee program, the source of financing will be the Federal Financing Bank, and with respect to the portion of the debt insured by export credit agencies, the source of financing will be commercial banks.”

“This is not like Dad co-signing a loan for a child’s first car,” said Michael Mariotte, executive director of Nuclear Information and Resource Service. “The idea that these are just loan “guarantees” is fictitious: these are actual loans. Giant nuclear utilities will be raiding the federal treasury for money to build reactors, and they are expecting the taxpayers to bail them out if the project goes bad.”

“Coupled with Secretary Chu’s astonishing admission yesterday that he was unaware of the Congressional Budget Office report estimating a 50% failure rate for new reactor projects, the administration has chosen a path of enormous risk to taxpayers and is obscuring the real nature of that risk,” said Mariotte.

http://safeenergy.org/2014/04/22/does-desperation-on-vogtle-loan/

DOE’s desperation to give Vogtle loan now made clear

April 22, 2014

Now we know just how desperate the Department of Energy was to give a taxpayer loan to Southern Company and others for construction of two new reactors at the Vogtle site in Georgia.

Like a car dealer trying to sweep unsold autos off the lot, DOE gave Southern Co. the loan with nothing down. Nada. Zero.

Hannah Northey at E&E Publishing broke the story late yesterday, based on documents she received from DOE under the Freedom of Information Act.

Those documents indicated that the credit subsidy fee Southern and its partners had to pay to obtain the loan was zero. “The credit subsidy fee payable to DOE in connection with its execution of the loan guarantee agreement dated Feb. 20, 2014, between DOE and [Oglethorpe], pursuant to which DOE will guarantee a federal financing bank loan to OPC [for $3 billion, including estimated capitalized interest] is $0,’ Davison [DOE Loan Program Office Executive Director Peter] wrote in one letter to Higgins,” the article states.

Think of the “credit subsidy fee” as the down payment on a loan. If you buy a house, these days the bank is likely to require that you pay 20% of the mortgage up front–they want you to have a serious stake in the property. Apparently, when it comes to nuclear power, DOE decided that normal banking practices could be thrown out the window. What is surprising is that the White House’s Office of Management and Budget (OMB) signed on to the deal. For years, the rumors and chatter coming out of the notoriously tight-lipped OMB were that it regarded the project as risky and that it would require a meaningful credit subsidy fee. But OMB obviously backed down.

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