1. When does the Civil Nuclear Credit (CNC) Program start/end?
The CNC Program was authorized on November 15, 2021, when President Biden signed the Bipartisan Infrastructure Law (BIL). The BIL provides $6 billion for civil nuclear credits at $1.2 billion per year over fiscal years 2022 to 2026. Funds that are not allocated will be available for future credit allocation until spent or until September 30, 2031, whichever is sooner.
2. Will the entire $6 billion appropriation be spent during the first Award Period?
No, all $6 billion will not be spent during the first award cycle. Congress appropriated $1.2 billion in each of Fiscal Years 2022 through 2026 for the CNC Program. These appropriations will be available for allocations of credits until spent or September 30, 2031, whichever comes first.
3. What was the focus of the CNC Program first award cycle?
The first CNC award cycle prioritizes reactors that have already announced their intention to cease operation. To ensure the first award cycle was directed toward nuclear reactors most at risk of imminent closure, the applicant must have demonstrated that it made a public filing on or before November 15, 2021, the date of enactment of the Bipartisan Infrastructure Law, announcing its intention to permanently cease operations of the nuclear reactor on or before September 30, 2026. The filing cannot have been withdrawn, and any conditional statements about market conditions must be verifiable.
4. How long are civil nuclear credits good for?
Civil nuclear credits will be allocated to selected certified reactors over a four-year award period.
5. How many reactors are currently at risk of closure due to economic factors?
DOE cannot provide a precise number, as decisions to cease operation rests with plant owners and operators. Shifting energy markets and other economic factors have already forced the early closures of 13 commercial nuclear power reactors across the United States, and more economically strained facilities may cease operations in the coming years.
6. To participate in the CNC Program, does uranium used in the reactor have to be produced, converted, enriched, and fabricated into fuel assemblies in the United States?
There is no specific domestic fuel sourcing threshold in determining whether to certify a reactor or allocate credits to that reactor. However, BIL requires the Secretary to give priority in certification to a nuclear reactor that uses, to the maximum extent available, uranium that is produced, converted, enriched, and fabricated into fuel assemblies in the United States.
For the first award cycle, DOE included a bid adjustment to recognize nuclear reactors based on the amount of domestic content that will be used by the reactor during the four-year award period. In addition, an applicant for civil nuclear credits was required to provide, where known, information on the countries of origin of the uranium and fuel processing services planned to be used during the award period.
An applicant must commit to using best efforts during the four-year award period to maximize the procurement of uranium that is produced in the United States and the procurement of conversion services, enrichment services, and fabrication into fuel assemblies in the United States. DOE will audit this information during the award period.
7. Have any CNC credits been awarded?
The CNC Program has announced a conditional award to Pacific Gas & Electric Company (PG&E) for the Diablo Canyon Power Plant, Units 1 and 2. The maximum four-year total credit award value is up to $1,100,520,444. The maximum credit value for each award year, shown below, will be subject to downward adjustment based on audit of actual costs and revenues.
- Award Year 1 (2023): up to $269,027,403
- Award Year 2 (2024): up to $266,557,681
- Award Year 3 (2025): up to $276,051,517
- Award Year 4 (2026): up to $288,883,843
Finalization of the award is contingent on completion of the environmental review and negotiation of the terms of the Credit Award and Redemption Agreement acceptable to DOE.
8. What were the criteria for certification and what types of information were collected and assessed?
Section 40323 of BIL requires that the applicant demonstrate that the reactor competes in a competitive electricity market and that DOE, to the maximum extent practicable, must determine that a reactor is projected to cease operations due to economic factors, that air pollutants will increase if the reactor retires, and that the U.S. Nuclear Regulatory Commission has reasonable assurance that the reactor will operate consistent with its current licensing basis and that it poses no significant safety hazards.
The CNC Amended Guidance for the First Award Period required that applicants submit information related to:
- Economic factors
- Emissions impact
- Post-Award Period operations plan
- Uranium and fuel source
- Workforce and labor considerations
- Community engagement and impact
- Additional information that is described in the CNC Amended Guidance.
9. What was the timeline for selecting the conditional award?
The application and bid submission deadline for the first award cycle of the CNC Program closed on September 6, 2022. Following the closure of the application period, DOE reviewed application(s) and certified any nuclear reactors that met the requirements set forth in the June 2022 CNC Amended Guidance. DOE evaluated bids from certified nuclear reactors only, using criteria described in the CNC Amended Guidance, and allocated credits. The conditional award was announced on November 21, 2022.
10. Will DOE audit and/or verify all information contained in the applications for certification and bids?
All information in application(s) for certification was reviewed, and DOE had independent technical experts support evaluation of the submissions. Additionally, DOE will audit awardees annually to assess differences between projections made at the time of certification and the actual financials in each award year, as well as to review the status of the awardee’s contractual commitments.
11. What is the basis for the value of the credit and the total amount awarded?
Credits in the first award cycle are allocated based on bids submitted to DOE by the selected certified reactors. The conditional award value represents the maximum credit value and corresponds to the difference between the projected costs plus risk and revenues. Allocated credits are redeemable for future payment (like a voucher) after each award year. Actual costs and revenues will be submitted for audit, and any adjustment, which would only result in less money for the awardee, will be completed prior to payment. Credits will only be funded (paid) after the annual audit.
12. The allocation of credits is described as conditional, what does that mean?
The finalization of the award is contingent on completion of the environmental review and negotiation of terms in the Credit Award and Redemption Agreement acceptable to DOE, which will include the terms for adjustment of the award; details regarding annual reporting, specifically matters related to workforce and labor considerations and community engagement; and contract terms around license renewal activities.
13. How can I learn the identities of all applicants and the status of their applications from the First Award Period?
As stated in the CNC Amended Guidance, DOE will not make public any information about unsuccessful applications the program may have received, including how many, the identity of the applicant, or any details about what is contained in the submissions.
14. When will the next award cycle be initiated? Who will be eligible to apply?
DOE anticipates launching the next award cycle in January 2023. Future CNC award cycles will not be limited to nuclear reactors that have made public filings as of the date of the enactment of BIL announcing their intentions to retire. Certification requirements will be described in the CNC Amended Guidance for the relevant award cycle.
15. Can nuclear reactors receiving State zero-emission credits or other State supports apply for Civil Nuclear Credits?
Owners or operators of nuclear reactors that receive payment(s) from State programs (zero-emission credit, clean energy contract, or other programs) may apply for certification to bid for credits for nuclear reactors that meet the eligibility criteria. DOE will review all applications against the criteria described in the Guidance for the relevant award cycle.
16. Will reactors be able to utilize the nuclear power production tax credit (PTC) in the Inflation Reduction Act and also apply for the Civil Nuclear Credit Program?
DOE expects that some reactors may be eligible for both the Production Tax Credit (PTC) under Section 45U of the Inflation Reduction Act and credits under the CNC Program. The PTC is available to nuclear power reactors for electricity generated from nuclear energy beginning in 2024 through 2032. DOE’s interpretation of the PTC, subject to final review by Treasury, is that CNC credits meet the requirements for exclusion under 45U(b)(2)(B)(iii).