Federal Loan Guarantees for the Construction of Nuclear Power Plants

The following document has been added to CBO's Web site:

• Federal Loan Guarantees for the Construction of Nuclear Power Plants CBO's analysis examines the main factors that influence the cost to the federal government of providing loan guarantees for the construction of nuclear power plants. It includes illustrative cost estimates using the methodology specified by the Federal Credit Reform Act of 1990, which determines the budgetary cost of the program, and also estimates prepared on a fair-value basis, which provide a more comprehensive measure of cost. CBO found that the expected cost to the federal government of guaranteeing a nuclear construction loan varies greatly depending on a project's characteristics. Budgetary estimates of guarantee costs are significantly lower than the corresponding fair-value estimates. However, because of the high degree of uncertainty involved, it may not be possible to charge borrowers the full cost of a loan guarantee, either under credit reform or on a fair-value basis.