• Gabe Semenza •
• Originally published May 18, 2009 at 7:18 p.m., updated May 18, 2009 at 10:27 p.m.

You won't find Exelon Nuclear on the list of likely recipients for federal loan guarantees.

Contrary to reports, however, plans for the proposed Victoria County plant continue, Exelon spokespeople say. So, too, do urgent efforts to sway lawmakers to set aside more money to help guarantee more plants.

Four companies planning new nuclear reactors were recently informed their applications are getting a closer look, the U.S. Department of Energy announced Friday. Exelon's name wasn't in the bunch.

The energy department has $18.5 billion in government-backed loan guarantees that nuclear power companies need to secure financing for new construction. About 20 companies applied for the safety net.

Exelon's omission from the narrowed list prompted misleading regional news reports.

"Plans for a new nuclear power plant in Victoria are likely to be scrapped because the project isn't expected to obtain necessary government-backed loans to help finance the facility," the Houston Chronicle reported on Saturday, paraphrasing John Rowe, Exelon's chief executive officer.

Bill Harris, Exelon's Victoria-based community outreach manager, said Rowe's words were twisted.

"He said what we've said all along. We cannot build the Victoria project without loan guarantees," Harris said. "This shouldn't come as a surprise to anyone. Exelon's still in the early application stages. We didn't expect to be among the top projects to get loan guarantees."

Applications were singled out for closer review because they are furthest along in obtaining needed licenses. Exelon's just not there yet, he said.

In October, the department received 19 applications from 17 power companies seeking $122 billion in loan guarantees, which far exceeds the $18.5 billion available.

Next-generation nuclear power plants can cost about $9 billion to build, and the reeling credit markets are reluctant to lend.

While federal loan guarantees differ based on case-by-case negotiations, they offer a safety net to lenders. A loan guarantee is a promise by the government to cushion a bank if a nuclear power company falters on payments.

U.S. Senator Kay Bailey Hutchison, a Republican from Texas, sent a letter last week urging key lawmakers to increase funding for loan guarantees. She said U.S. energy demand requires it.

"Nuclear power plants are only allocated $18.5 billion in loan guarantees, enough for about three reactors," Hutchinson wrote. "This level of funding is insufficient and will reduce the likelihood that we are able to expand on our nuclear capability."

Jeff Sadosky, Hutchison's spokesperson, said Monday the senator wrote the letter as lawmakers consider the nation's budget.

"The final appropriations decisions will happen over the next month or two. They are drafting the appropriations bills as we speak," Sadosky said.

As Exelon awaits word from Capitol Hill, the company also looks forward to June, the month NRG Energy is expected to hold its next stockholders meeting.

Exelon is knee-deep in a hostile takeover of NRG, part owner of Bay City's South Texas Project, a nuclear power plant.

NRG wants to expand the plant by two reactors, and its application is one of the four getting a closer federal look.

A closer look, though, doesn't mean certain federal loan guarantees, and Congress may or may not add to the program's budget. No no one knows just how much money will exist to go around, or which companies will ultimately qualify for it.

Craig Nesbit said these uncertainties are only a fraction of the variables weighing on the minds at Exelon.

The company expects to decide in early 2010 if it will move forward locally, but the Exelon spokesman said he can't say for sure just how the cards must stack for the answer to be yes.

"It's a very fluid situation," Nesbit said. "There's no need for decisions right now. We don't even have our cost estimates."

If Exelon takes over NRG, for example, the move could stall a new Victoria County plant. Exelon would in that case focus on the two-reactor expansion in Bay City.

"At some point, you'll know how many plants are on the table and how much money there is in loan guarantees," Nesbit said. "How important is this legislative session? It's fairly important. Is it the be-all-end-all? Not by any stretch of the imagination."

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