Congress has approved a combined bill that is expected to deliver the long-awaited comprehensive energy legislation. The House passed the combined energy bill on 28 July while the Senate passed it the following day and it rests on President Bush's desk.
Designed to reduce domestic dependence on foreign oil, the bill will cost $14.6 billion over 10 years, double the cost the administration was seeking, and this mostly goes to nuclear and fossil companies. Of the provisions set out in the bill, electric utilities will save $3.1 billion over 10 years, the coal industry $2.9 billion, and the oil-and-gas business $2.7 billion.
Republicans hailed the bill for its free-market principles and support of less polluting energy sources, while Democrats criticised the bill, calling it corporate welfare for fossil-fuel industries.
Among the major items in the bill are a range of supports and subsides for licensing, constructing and operating a new fleet of nuclear plants and a nuclear risk insurance fund that would provide up to $2 billion to pay for any government delays to the licensing, constructing and operating of a nuclear plant. The new risk fund would cover all of the cost of delay for the first two new plants, up to $500 million each, and 50% of delays, up to $250 million each, for the following four plants covering up to six new plants. Loan guarantees and production tax credits for newly designed and constructed nuclear plants are also available.
The final bill also provides $1.25 billion over the next decade towards research, development and construction of an advanced cogeneration nuclear reactor for electricity and hydrogen at the new Idaho National Laboratory. The DOE is also authorised to spend $100 million to support hydrogen demonstration projects at two existing nuclear power plants.
The bill provides nuclear power with a c1.8/kWh production tax credit, costing $278 million over 10 years, and updates the tax treatment of plant decommissioning funds.
The nuclear industry is also eligible for clean energy loan guarantees of up to 80% of the total project cost if the technology is new and it reduces air pollution or greenhouse gases. These funds cover projects in renewable energy, advanced coal, carbon capture and sequestration, hydrogen and advanced nuclear facilities among other sectors. Clean Coal Tax Credits for power companies that use clean-coal technology, this includes $800 million for a 20% investment tax credit for power plants using the most advanced clean coal technology, and $500 million for a 15% investment tax credit for other advanced clean coal power plants.
Other measures include repeal of the Public Utility Holding Company Act of 1935 (PUHCA) and replacement of the existing voluntary electric reliability standards with mandatory, enforceable standards to modernise and expand the national transmission network. A two-year extension of the Renewable Energy Production Tax Credit is also included in the measure.
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