Obama Seeks to Expand Loan Guarantees for Reactors

The Obama administration will press ahead with efforts to expand loan guarantees for new nuclear reactors while investigating the failure of Japan's power plants after an earthquake, Energy Secretary Steven Chu said.

The U.S. Energy Department is seeking to add $36 billion in loan-guarantee authority to the program's existing $18.5 billion, Chu said today at a House Energy and Commerce Committee panel hearing. President Barack Obama asked lawmakers to expand the program in his February budget request.

U.S. nuclear plants are subject to "constant monitoring and oversight," Obama said in an interview yesterday with Albuquerque, New Mexico, television station KOAT.

Energy officials "don't believe there is any danger" posed by U.S. reactors, Chu said today. The administration will look "very, very closely" at events in Japan to see if changes are needed "at the current existing nuclear power plants and any that are being considered" for construction, he said.

The committee will hold hearings on Japan's crisis and the implications for U.S. reactors, said Representative Fred Upton, a Michigan Republican and chairman of the panel. There is incomplete information on developments in Japan and "we need to allow time for reflection and careful analysis," Upton said.

The U.S. hasn't issued a new nuclear construction license in more than 30 years. The Obama administration is seeking the guarantees, in which the U.S. backs construction loans against default, "to help deploy a new generation of American nuclear reactors," Chu said. Nuclear power will help the U.S. meet Obama's goal of getting 80% of the nation's electricity from "clean" sources by 2035, he said.

The Office of Management and Budget "will include anything like what is happening in Japan" when calculating fees that power companies must pay for a loan guarantee, Chu said.