Notes and Sources

24. The subsidy cost—essentially the expected cost of the program, excluding administrative expenditures— generally equals the amount of the loan multiplied by the probability of default. The actual computation of the “subsidy cost” and whether it represents the true cost of the program are complex issues far beyond the scope of this section of AEO2008. For more details on government loan guarantee programs, see Energy Information Administration, Federal Financial Interventions and Subsidies in Energy Markets 2007, SR/CNEAF/2008-01 (Washington, DC, April 2008), web site www.eia.gov/oiaf/servicerpt/subsidy2/index.html.

25. Energy Information Administration, Annual Energy Outlook 2007, DOE/EIA-0383(2007) (Washington, DC, February 2007), “Loan Guarantees and the Economics of Electricity Generating Technologies,” pp. 48-49, web site www.eia.gov/oiaf/archive/aeo07/pdf/ issues.pdf.

26. U.S. House of Representatives, 110th Congress, “Energy and Water Development Appropriations Bill, 2008” (House Report 110-185, June 11, 2007); and U.S. Senate, 110th Congress, “Energy and Water Appropriations Bill, 2008” (Senate Report 110-127, July 9, 2007), web site www.access.gpo.gov/congress/ legislation/08appro.html.

27. See, for example, testimony of Christopher Crane, Senior Vice President, Exelon Corporation, and President and Chief Nuclear Officer, Exelon Nuclear, before the Subcommittee on Energy and Air Quality, Committee on Energy and Commerce, U.S. House of Representatives (April 24, 2007), web site http:// energycommerce.house.gov/cmte_mtgs/110-eaq-hrg. 042407.Crane-testimony.pdf.

28. U.S. Department of Energy, Loan Guarantee Program, “DOE Releases Information on Loan Guarantee Pre-Applications” (March 6, 2007), web site www. lgprogram.energy.gov/press/030607.html.