Analysis of Studies on Alternative Financing for the Clinch River Breeder Reactor

GAO was asked to review the anticipated Department of Energy (DOE) report on the Clinch River Breeder Reactor (CRBR) project and to assess the alternatives presented by the Department of Energy for securing additional private financing.

In the report, DOE stated that its approach was to develop Government technical input which the Breeder Reactor Corporation task force could use to develop private financing. The DOE report presented only the corporation's alternative, which is preliminary. The task force concluded that CRBR should be able to attract a larger amount of private funding up to an additional $800 million, because it would generate revenue from electricity sales and provide additional income from Federal tax incentives which private investors should find attractive. Thus, the corporation's and the DOE reports represent the beginning of a process that will require much more work before a detailed private financing proposal is developed. Because DOE and the corporation have not yet developed and presented specific information, a detailed analysis of the feasibility or merits of increased private sector investment in the CRBR project is not possible. Therefore, GAO continues to believe that the main element in considering funding decisions must be the project's research and development importance.