March 5, 2008
Loan Program for Rural Power Plants Suspended on Climate Change Grounds
HT Bill Buzbee on UO envlawprofessor list - from Greenwire:
The federal government is suspending a major loan program for coal-fired power plants in rural communities, saying the uncertainties of climate change and rising construction costs make the loans too risky.
After issuing $1.3 billion in loans for new plant construction since 2001, none will be issued this year and likely none in 2009, James Newby, assistant administrator for the Rural Utilities Service, a branch of the U.S. Department of Agriculture, said Tuesday.
The program's suspension marks a dramatic reversal of a once-reliable source of new coal plant financing. It follows the announcement last month that several major banks will require plant developers to factor in climate change when seeking private funding (Greenwire, Feb. 4).
At the time of the suspension, at least four utilities had been lined up for loans totaling $1.3 billion - for projects in Kentucky, Illinois, Arkansas and Missouri. A project in Montana was denied funding last month. Two more were recently withdrawn: last October in Wyoming and earlier this week in Missouri (AP/International Herald Tribune, March 5)
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