Bingaman: Collapse of nuke plant deal shows need for ‘green bank’

“Chairman Bingaman has not only proposed several improvements to the current program – in addition to the recent oversight hearing — he has proposed (with several GOP co-sponsors) to replace it with a streamlined, more powerful and more effective agency — CEDA,” said Bingaman spokesman Bill Wicker on Monday when asked about the Constellation deal.

The green bank was included in a big energy bill that Bingaman’s committee passed last year, but the Senate has shelved broad-based energy legislation. A version of the plan was also included in the cap-and-trade and energy bill the House narrowly approved in 2009.

Maryland-based Constellation Energy announced over the weekend that it is abandoning plans for a third reactor at the Calvert Cliffs plant, which it had planned to build in a joint venture with French power company Electricite de France.

Constellation said the White House Office of Management and Budget is imposing onerous conditions on the company to access a $7.5 billion DOE loan guarantee.

The dispute centers on where to set the credit subsidy fee, which is the upfront cost the company would pay to help protect taxpayers in the event of a default.

“In a letter sent to DOE, Constellation Energy said the cost of the loan guarantee that is calculated by the Office of Management and Budget (OMB) is unreasonably burdensome and would create unacceptable risks and costs for our company. There is a significant problem in the way OMB calculates the credit cost. After repeated unsuccessful attempts to resolve this issue with DOE and OMB, we no longer see a timely path to reaching a workable set of terms and conditions,” Constellation said in announcing the decision Saturday.

Wicker also said that “although DOE has made great strides in improving the process in the last year, there still are too many steps of review with OMB and Treasury; those two agencies simply are not coordinating well enough.”



“The entire Administration needs to be committed to make the loan guarantee program successful,” he added. Wicker said that Jacob Lew, the White House nominee to head OMB, “made that promise to Sen.  Bingaman, and you can be sure that Bingaman’s committee will keep up the oversight to see that that commitment is kept.”