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As mandated by the Congress, the Department of Energy has transmitted a new plan for financing the Clinch River Breeder Reactor Project (CRBRP) involving greater participation from the private sector. At the request of the Subcommittee on Energy Conservation and Power of the House Committee on Energy and Commerce, the Congressional Budget Office (CBO) has prepared an analysis of the proposed financing plan, assessing its long-term impact on the federal budget compared to the alternative of full federal funding of the remaining costs. This paper describes the background of the new financing plan and the CBO analysis of its budget impact.
 

BACKGROUND

The CRBRP was authorized in 1970 and initial appropriations were provided in 1972. The cost of the project was estimated in 1972 to be $699 million, based on manufacturers' conceptual designs. In 1973, utilities committed themselves to pay $257 million plus interest to the CRBRP. The Department of Energy now estimates that interest will raise the utility commitment to more than $340 million. After detailed cost estimates and reference designs were completed in 1974, the estimated costs of the project rose to over $1.7 billion, assuming operation in 1982. Funding restrictions, delays, licensing requirements, and cost reestimates have since raised the estimated costs to over $4 billion, of which nearly $1.7 billion has been spent. In the Further Continuing Appropriations Act for Fiscal Year 1983, the Congress directed the Department of Energy to report on options to secure additional private sector participation in the CRBRP that would reduce the federal budget requirements. An initial report was submitted in March, and a second more detailed plan was submitted in early August. No funds were included in the Energy and Water Appropriations Act of 1984 for the CRBRP pending action on private financing. Work continues, however, on site preparation activity.

Responsibility for the CRBRP is governed by contractual agreements involving the Department of Energy, the Commonwealth Edison Company, the Tennessee Valley Authority (TVA), and the Project Management Corporation (PMC). The latter represents the interests of contributing utilities in the management of the project. The Breeder Reactor Corporation (BRC) was established to represent the electric power industry in providing assistance and support to the project.

Under present working agreements, if the project is to be completed by 1990 as currently planned, the government will be responsible for providing an estimated additional $2.3 billion to complete construction. As part of their original commitment, utilities (through the BRC) are obligated to provide an additional $175 million.¹ The TV A is required to purchase power generated by the CRBRP for the first five years of the project's operation, and has the option to purchase the plant at the end of that period. No specific agreements have been reached regarding the operation of the project after the five-year period.

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1. This is in addition to the utility contributions to date, which, with accrued interest, total $166 million.