Loan Guarantee Provisions in the 2007 Energy Bills: Does Nuclear Power Pose Significant Taxpayer Risk and Liability?

The document examines the risks of federal loan guarantees for nuclear power, highlighting how proposed legislation in 2007 could remove Congressional oversight and shift significant financial burdens to taxpayers. It notes that the nuclear industry's request for at least $50 billion in guarantees over two years far exceeds previous R&D spending. The briefing argues that the Department of Energy (DOE) lacks the necessary infrastructure, staffing, and procedures to manage these risks, which are compounded by the nuclear industry's history of massive cost overruns and high default probabilities.

• The Senate energy bill (H.R. 6) proposes to exempt the DOE loan guarantee program from Section 504(b) of the Federal Credit Reform Act of 1990, which would allow the DOE to issue unlimited loan guarantees without Congressional oversight and remove appropriation safeguards.
• The nuclear industry's estimated need for loan guarantees is at least $50 billion for the first two years, a figure that exceeds the $49.7 billion the DOE spent on nuclear power R&D between 1973 and 2003.
• Taxpayers face significant risk because the DOE has not established procedures for determining subsidy costs, and any shortfalls in these costs are funded by a permanent indefinite appropriation rather than the annual budget process.
• Nuclear power projects present high financial risks due to a history of cost overruns reaching over 350 percent of estimates and a default risk estimated by the Congressional Budget Office to be above 50 percent.
• The DOE lacks the essential infrastructure to manage the loan guarantee program, including a lack of critical policies, procedures, and a full complement of designated federal staff.
• Major Wall Street investors, including Goldman Sachs and Morgan Stanley, have indicated that the high capital costs and long construction schedules of nuclear plants make lenders unwilling to extend long-term credit without 100 percent federal guarantees.

APA

Sauer, A., & Beck, F. (2007). Loan Guarantee Provisions in the 2007 Energy Bills: Does Nuclear Power Pose Significant Taxpayer Risk and Liability? Environmental and Energy Study Institute. https://www.eesi.org/files/Nuclear_LGP_Issue_Brief_2007_0.pdf

Chicago

Sauer, Amy, and Fredric Beck. Loan Guarantee Provisions in the 2007 Energy Bills: Does Nuclear Power Pose Significant Taxpayer Risk and Liability? Environmental and Energy Study Institute, 2007. https://www.eesi.org/files/Nuclear_LGP_Issue_Brief_2007_0.pdf.

Wikipedia

{{cite report |last1=Sauer |first1=Amy |last2=Beck |first2=Fredric |title=Loan Guarantee Provisions in the 2007 Energy Bills: Does Nuclear Power Pose Significant Taxpayer Risk and Liability? |publisher=Environmental and Energy Study Institute |date=30 October 2007 |url=https://www.eesi.org/files/Nuclear_LGP_Issue_Brief_2007_0.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{sauer2007loan, author = {Sauer, Amy and Beck, Fredric}, title = {{Loan Guarantee Provisions in the 2007 Energy Bills: Does Nuclear Power Pose Significant Taxpayer Risk and Liability?}}, institution = {Environmental and Energy Study Institute}, year = {2007}, month = oct, url = {https://www.eesi.org/files/Nuclear_LGP_Issue_Brief_2007_0.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }