Platts - Thursday, July 28, 2005 http://www.platts.com ------------ House passes energy bill with nuclear incentives Washington (Platts)--28Jul2005 An energy bill with nuclear-friendly provisions passed the House in a 275-156 vote this afternoon. The Senate may take up the bill tomorrow. The broad energy legislation includes federal risk insurance that would pay up to $2-billion if there were delays in full-power operations of the first six advanced power reactors receiving NRC's new combined construction and operating licenses. The bill includes a production tax credit for new power reactors of 1.8 cents per kilowatt-hour for nuclear-generated electricity produced over eight years. Under another tax incentive, all decommissioning funds would be taxed at a 20% rate. Some funds are now taxed at a 35% rate. The legislation creates the post of assistant secretary of nuclear energy at DOE, elevating the position within the department from the current position of director of the Office of Nuclear Energy, Science & Technology. The bill would make advanced reactors eligible for federal loan guarantees of up to 80% of the project cost. ------------ Germany's ruling party slams energy manager salaries Freiburg (Platts)--28Jul2005 Germany's ruling party, the SPD, criticized energy managers for their high salaries Thursday, saying they had increased their companies' share prices by expressing positive views about a possible change in government and then cashed in on options. Michael Mueller, SPD vice-chairman, said managers like RWE's Harry Roels had cashed in on the anti-competitive energy markets by strengthening their own companies' monopoly position while laying off staff to increase their profits. Mueller said the pro-nuclear energy policies of the CDU and FDP parties had helped increase the companies' stock values. Utilities were able to profit from high power prices though their nuclear plants assets had been fully depreciated, said Mueller. They had managed to strengthen their generation portfolios and their oligopoly structures, while prices were on the rise. The SPD said this proved why the managers were against modern decentralized and renewable energies. "More competition in the energy markets would mean lower share prices for the big companies and reduce the profits from options," said Mueller. The SPD was reacting to reports that Roels had cashed in his options, bringing his salary to a total of Eur9.1-mil ($11.0-mil). For more similar news, take a trial to Platts Inside NRC at http://insidenrc.platts.com. ------------ Top Republicans call US energy bill 'great major first step' Washington (Platts)--27Jul2005 With a long-fought US comprehensive energy bill on the cusp of final passage, Republicans Wednesday promoted the measure as a "great first major step" that would diversify energy supplies. But they acknowledged the bill, six years in the making, would not lower high prices or imports of oil and gas, as critics have noted. The House of Representatives is expected to vote for the House-Senate bill on Thursday, followed by the Senate on Friday. That would send the bill to President Bush for his signature into law. Energy Secretary Samuel Bodman said he did not expect the bill to ease prices, but said the legislation would "encourage the private sector to do what they do best" to address the situation. He said it would take "months if not years to deal with prices." One of the chief authors of the bill, Rep Joe Barton (Republican-Texas) said he hoped that "over time" the bill's 8-bil gal ethanol-in-gasoline requirement would lower oil demand. Barton defended the decision not to include a Senate plan requiring Bush to lower oil demand by 1-mil bbl/d, saying it would have forced carpooling and huge increases in vehicle fuel economy standards. He said the bill would make it "possible to build" new coal and nuclear power plants, liquefied natural gas terminals, power lines and renewable energy generating facilities "anywhere in the country." Bodman lauded Congress for including Bush's proposals to jump-start a hydrogen economy, new nuclear power plants and additional liquefied natural gas terminals. Congress' last major energy bill was enacted in 1992. Read more about the US energy bill at http://www.platts.com/Oil/Resources/News%20Features/energybill/index.xml. ------------ Production tax credits for nuclear in energy bill Washington (Platts)--27Jul2005 A production tax credit for new power reactors of 1.8 cents per kilowatt-hour will be established under the tax incentives now part of broad energy legislation. The tax credit, the first for the nuclear power industry, is for the amount of nuclear-generated electricity produced over eight years. The tax package also says all decommissioning funds should be placed into qualified funds with a 20% tax rate, ending the separation of funds into qualified and non-qualified funds--which are taxed at 35%--depending on when a reactor began operations. Cost of the decommissioning fund change was estimated at $1.29-billion, according to the tax package. The House is expected to vote on the conference energy bill, with the tax package, July 28 and the Senate a day later. ------------ Risk insurance provisions attached to energy bill Washington (Platts)--26Jul2005 Provisions calling for federal risk insurance for new advanced reactors were attached to broad energy legislation late July 25 as House and Senate conferees were wrapping up work on the bill. The risk insurance amendment offered by Sen. Pete Domenici (R-N.M.) would create a $2-billion program aimed at easing utility and Wall Street concerns about financial losses from regulatory delays in full-power operation of the first six reactors receiving NRC's new combined construction and operating licenses (COL). Up to three different reactor designs could be involved in the program. The first two reactors would be eligible for up to $500-million each. The remaining four could receive up to $250-million each. The bill does not stipulate how the insurance would be funded, leaving open options that either appropriations or money collected from utilities could be used. A congressional staffer said today that funding, as well as the amount of any insurance premium, would be negotiated during DOE-utility talks for individual risk insurance contracts. ------------ Site security plans for UK civilian nuclear sites are in place New York (Platts)--26Jul2005 Site security plans (SSPs) for all 47 UK civilian nuclear sites are now formally in place, said Civil Nuclear Security Director Roger Brunt in his annual report to the government today. Brunt's report noted the new regulatory environment that has emerged over the past three years. Preparation and implementation of the SSPs during that time gave the UK security regulator, the Office of Civil Nuclear Security (OCNS), and nuclear operators the opportunity "to review and recalibrate all existing security arrangements," he said. OCNS inspectors had carried out eight full site inspections covering "every aspect of security" in fiscal year 2004/05, ending Mar 31, he said. A total of 37 security incidents had been reported but none had posed a serious threat to nuclear material, he noted. For more similar news, take a trial to Platts Nuclear News Flashes at http://www.nuclearnews.platts.com. ------------