- The Washington Times - Friday, April 10, 2009

ANALYSIS/OPINION:

Your article “Senate budget revives ‘nuclear pork’” (Page 1, Wednesday), failed to explain clearly that the U.S. Department of Energy loan-guarantee program for nuclear projects is neither a subsidy nor bailout. Rather, the loan-guarantee program is available for energy technologies (such as wind, advanced coal and nuclear projects) that will reduce, sequester or prevent greenhouse gas emissions.

The loan guarantee is a government-backed loan that allows companies to access capital on Wall Street and elsewhere in the private sector at low interest rates. This reduces the overall project cost, which means cheaper electricity for consumers. As for nuclear-energy loan guarantees, the industry pays for all costs associated with the program - a direct payment to the U.S. Treasury.

Ten companies have submitted applications to the Department of Energy, representing $93.2 billion in loan volume. Companies that seek federal loan guarantees to build new nuclear power plants will be required to invest roughly $1 billion of equity capital for the project - a sum that ensures they will proceed with both disciplined project management and a high probability of success.

In addition, nuclear energy projects will undergo a highly demanding test of their credit worthiness measured by indicators including the credit rating of their sponsor, capital structure, cash flow and strength of power-purchase agreements. If the nuclear projects fail to meet any of these exacting standards, they simply will not receive any loan guarantees.

SCOTT PETERSON

Vice president of communications

Nuclear Energy Institute

Washington

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