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Friday, August 04, 2006

Federal Risk Insurance Rules For New Fission Power Plants

The Department of Energy (DOE) today announced completion of the final rule that establishes the process for utility companies building the next six new nuclear power plants in the U.S. to qualify for a portion of $2 billion in federal risk insurance. This risk insurance, authorized by the Energy Policy Act of 2005, protects companies that take the risk of attempting to build a new fission plant from regulatory and litigation related delays that could delay start-up. Up to $500 million in coverage is available for the initial two plants for which construction is started and up to $250 million is available for the next four plants.

Events that would be covered by the risk insurance include delays associated with the Nuclear Regulatory Commission’s reviews of inspections, tests, analyses and acceptance criteria or other licensing schedule delays as well as certain delays associated with litigation in federal, state or tribal courts. Insurance coverage is not available for normal business risks such as employment strikes and weather delays. Covered losses would include principal and interest on debt and losses resulting from the purchase of replacement power to satisfy contractual obligations. (DOE Press Release) (Reg Link Coming)

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