D.O.E. Delivers Filing Instructions for Federal Risk Insurance for New Nuclear Power Plants

Outlines 5 Steps for New Nuclear Plant Sponsors to Enter Into a Conditional Arrangement for Risk Insurance

WASHINGTON, DC - The D.O.E. (DOE) today released instructions for companies building new nuclear power plants in the U.S. to enter into a Conditional Arrangement with D.O.E. to qualify for a portion of the $2 billion in federal risk insurance. Authorized by the Energy Policy Act of 2005 (EPAct), risk insurance is intended to cover costs associated with certain regulatory or litigation-related delays - which are no fault of the company - that stall the start-up of new nuclear power plants.

"These instructions enable sponsors of new nuclear power plants to begin the process of addressing certain barriers to building the nuclear generating capacity necessary to meet our Nation's growing energy needs," D.O.E. Assistant Secretary for Nuclear Energy Dennis Spurgeon said. "Federal risk insurance provides an mechanism to spur construction of new nuclear power plants that will help power our economy with advanced technologies and confront global climate change."

The Conditional Arrangement is the 1st step in the process toward a risk insurance contract. Sponsors of advanced nuclear facilities, whose application for a combined Construction and Operating License (COL) has been docketed by the Nuclear Regulatory Commission (NRC), can enter into a Conditional Arrangement with DOE; however, EPAct authorizes D.O.E. to enter into contracts with only the 1st 6 sponsors that are issued a license and begin construction of new nuclear facilities and meet all contractual conditions to provide risk insurance for certain regulatory and litigation delays in the full power operation of their facility. Up to $500 million in coverage is accessible for the initial 2 licensed plants for which construction is started and up to $250 million is accessible for the next 4 plants.

Today's instructions on requesting a conditional Arrangement contract consist of a 5 step process that includes: Advance Notification of Sponsor Intent; Request Submitted by Sponsor; D.O.E. Initial Review of Request; D.O.E. Processing of Request; and the Execution of the Conditions.

The following is a general explanation of the instructions, information requirements, and review processes leading to execution of a Conditional Arrangement with DOE.

• Step One: Advance Notification of Sponsor Intent: Optional and preferred, but not required. Advance notification is desirable to provide D.O.E. with valuable information for planning and managing the review of requests for Conditional Agreements, and may facilitate the D.O.E. review and processing of individual requests for a Conditional Agreement.
• Step Two: Submission Request for a Conditional Agreement: Includes a letter by the qualified sponsor to D.O.E. accompanied by the supporting information and documentation, including a copy of the sponsor's docketed combined Construction and Operating License Application, the date the NRC docketed the application, and a summary level schedule identifying key projected dates of construction, testing, and full power operation. This schedule should also identify key milestones including major phases of construction, dates for startup testing period, power escalation schedule, and anticipated date of full power operation.
• Step Three: D.O.E. Initial Review of Request: D.O.E. will conduct an initial review of the request to determine whether the information as provided by the Sponsor is adequate. If the provided information in the request is adequate, D.O.E. will notify the Sponsor that the information is adequate and begin processing the request.
• Step Four: D.O.E. Processing of Request: In processing the request, D.O.E. will determine the estimated cost of a standby support contract based on the financial information provided by the Sponsor. The methodology used to derive the estimated cost of a standby support contract will be consistent with the methodology described in the final rule on Standby Support for Certain Nuclear Plant Delays (71 Fed. Reg. 46306, August 11, 2006).
• Step Five: Execution of a Conditional Agreement: Once steps 3 and 4 have been met and a review and processing of the request is complete, D.O.E. will determine whether the requirements for a Conditional Arrangement have been satisfied. D.O.E. will notify the sponsor of its determination and, if the requirements for a Conditional Arrangement have been met, D.O.E. will send a Conditional Arrangement to the sponsor that includes the necessary information to complete the Conditional Agreement.

Today's announcement follows previous progress through the Department's Nuclear Power 2010 program, which is a joint government and industry cost-shared effort to promote the expansion of nuclear power in the U.S. and work toward the submission of COL applications for new nuclear plants to the NRC. In October of this year, Tennessee Valley Authority, the Nation's biggest public power utility and a member of NuStart Energy, a consortium of nuclear energy companies selected through DOE's Nuclear Power 2010 plan submitted a COL application to the NRC. In November of this year, Dominion, another Nuclear Power 2010 participant, submitted an application for a COL for North Anna 3.

To review the instructions for requesting a Conditional Arrangement and other information on federal risk insurance, visit the Office of Nuclear Energy.

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