ARC Act of 2026
- Sponsor
- Sen. Risch, James E. [R-ID]
- Committees
- Energy and Natural Resources Committee (primary)
- Last action
- Feb 10, 2026
Bottom line
The bill aims to accelerate the deployment of advanced nuclear reactors by significantly reducing financial risk for developers through federal support for cost overruns and improved loan and tax credit access.
What it actually does
This bill establishes the Accelerating Reliable Capacity (ARC) Program within the Department of Energy's Loan Programs Office to provide financial support for advanced nuclear energy projects. It authorizes $3.6 billion for an account to cover a portion of project cost overruns beyond a certain threshold, offers enhanced loan guarantee terms, and expands eligibility for certain clean energy tax benefits to projects involving federal entities or military installations.
Proponents argue
Supporters argue that the bill is crucial for de-risking capital-intensive advanced nuclear energy projects, which are vital for achieving national energy security, grid reliability, and decarbonization goals. They contend that by mitigating the financial uncertainties associated with first-of-a-kind nuclear technologies, the bill will unlock private investment and accelerate the transition to a clean energy economy.
Opponents contend
Opponents might argue that the bill exposes taxpayers to significant financial risk by socializing potentially large cost overruns, thereby creating a moral hazard where project developers may have less incentive for stringent cost control. They may also contend that it distorts market incentives by providing excessive subsidies to one energy technology over others, potentially leading to inefficient resource allocation.
The bill is moderately technical due to its financial mechanisms and references to existing law, but it is concise enough for an informed reader to evaluate within a reasonable timeframe.
Sec. 2(c)
Establishment of Accelerating Reliable Capacity Program Account and Funding
This provision establishes a new 'Accelerating Reliable Capacity Program Account' within the Department of Energy's Loan Programs Office. It authorizes the appropriation of $3.6 billion for deposit into this account, with funds remaining available until expended. The account is managed by the Director of the Loan Programs Office and is specifically designated to make payments for project cost overruns.
Supporters argue
Supporters argue that establishing a dedicated, well-funded account is a necessary step to provide the financial certainty required to attract investment in advanced nuclear projects, which are critical for national energy goals.
Critics contend
Critics may contend that this account represents a significant taxpayer commitment to potentially risky projects, raising concerns about the ultimate cost to the federal budget.
Tradeoffs
The provision balances the need to provide substantial financial backing for advanced nuclear development against concerns about prudent fiscal management and potential taxpayer liability.
Sec. 2(d)
Federal Support for Project Cost Overruns
This section outlines how the federal government will share liability for cost overruns on qualifying advanced nuclear projects. Borrowers are responsible for all overruns until cumulative expenses exceed 120% of the project's approved Class 2 estimate. Beyond this threshold, the Director of the Loan Programs Office will make payments from the ARC Account to the Federal Financing Bank, covering a portion of additional overruns. These payments are capped at the lesser of 30% of the project's point base estimate or $1.2 billion per project, and are applied to reduce the principal of the guaranteed loan.
Sec. 2(e)
Enhanced Financing Terms for Qualifying Projects
This provision mandates that the Director of the Loan Programs Office offer enhanced financing terms for qualifying advanced nuclear projects. Specifically, it allows loan guarantees to cover up to 200% of the project's approved Class 2 point base estimate, overriding existing statutory limits. It also requires the Director to seek a commitment from the Federal Financing Bank to amend or restructure the guaranteed loan to reflect any reduction in principal resulting from cost overrun payments made from the ARC Account.
Sec. 2(b)(12) and (c)(4)
Strict Project Planning, Oversight, and Contingent Funding Conditions
This provision defines a 'qualifying project' with stringent requirements, including the submission of a detailed project delivery plan, a Class 2 cost estimate with risk analysis, a resource-loaded integrated project schedule with risk analysis, and a labor survey analysis. It mandates enhanced project oversight, such as rolling forecasts and quarterly meetings with the Secretary, Director, and senior stakeholders. Furthermore, funds are only contingently obligated upon conditional commitment, becoming fully obligated at financial close, and can be reallocated if a borrower is not making 'good faith progress' towards meeting conditions.
Sec. 3
Broadening Access to Clean Energy Tax Benefits
This section amends Section 50141(d)(3) of Public Law 117-169 (the Inflation Reduction Act) to expand exceptions to the 'denial of double benefit' rule. This rule generally prevents projects from receiving both certain federal tax credits and other federal funding. The amendment allows projects partnering with federal power marketing administrations, the Tennessee Valley Authority, military installations, the General Services Administration for energy procurement, National Laboratories, or using nuclear fuel procured under the Nuclear Fuel Security Act of 2023 to potentially stack these clean energy tax credits with other federal funding, such as loan guarantees.
This subsection modifies the definition of 'advanced nuclear reactor' by clarifying the reference date for 'reactors operating' from 'the date of enactment of the Energy Act of 2020' to 'reactors operating in the United States on the date of enactment of the Energy Act of 2020 (Public Law 116-260; 134 Stat. 2418)'. This subtle change specifies that only reactors operating within the U.S. on that date are excluded from the 'advanced' definition, ensuring clarity for eligibility.
Sec. 2(b)(3)
Why it matters:This is standard legislative practice to refine definitions by referencing existing law and ensuring precision in scope.
Case for: Ensures clarity and precision in the scope of eligible advanced nuclear reactors, preventing ambiguity and potential disputes over project eligibility for the program's benefits.
Case against: No specific case against, as it is a technical clarification designed to improve the bill's accuracy and enforceability.
Estimated impact: Clarifies eligibility criteria for advanced nuclear projects, potentially affecting which specific reactor designs or technologies qualify for the program's financial support.
This subsection specifies that amounts in the Accelerating Reliable Capacity Program Account are 'contingently obligated' to a borrower upon approval of a conditional commitment. This obligation is subject to the borrower making 'good faith progress' towards satisfying the conditions for financial close. If the Secretary determines that good faith progress is not being made, the contingently obligated amounts can be made available to other borrowers.
Sec. 2(c)(4)
Why it matters:This is a common legislative mechanism for managing appropriations and conditional commitments, allowing for flexibility and accountability in federal funding programs.
Case for: Provides flexibility to the Department of Energy to reallocate funds if a project stalls, ensuring efficient use of taxpayer resources and incentivizing timely progress from project developers.
Case against: The term 'good faith progress' can be subjective, potentially leading to disputes or delays if a borrower's progress is deemed insufficient by the Secretary, creating uncertainty for project developers.
Estimated impact: Affects the certainty of funding for individual projects and provides the DOE with a critical tool for program management and resource optimization.