Section 1 Short title
This Act may be cited as the “Accelerating Reliable Capacity Act of 2026” or the “ARC Act of 2026”.
Accelerating Reliable Capacity Act of 2026
A BILL
To provide enhanced provisions for advanced nuclear energy projects receiving loan guarantees through the Department of Energy, and for other purposes.
Sec. 2 Accelerating Reliable Capacity Program
Purpose— The purpose of this section is to increase cost certainty for capital-intensive projects for which a guarantee is provided under section 1703 or 1706 of the Energy Policy Act of 2005 (42 U.S.C. 16513, 16517).
Definitions— In this section:
Account— The term account means the Accelerating Reliable Capacity Program Account established by subsection (c)(1).
Advanced nuclear energy project— The term advanced nuclear energy project means a project for 1 or more advanced nuclear reactors.
Advanced nuclear reactor— The term advanced nuclear reactor has the meaning given the term in section 951(b) of the Energy Policy Act of 2005 (42 U.S.C. 16271(b)), except that, for purposes of this section, the reference to “reactors operating on the date of enactment of the Energy Act of 2020” in paragraph (1)(A) of that section shall be deemed to read “reactors operating in the United States on the date of enactment of the Energy Act of 2020 (Public Law 116–260; 134 Stat. 2418)”.
Class 2 estimate— The term Class 2 estimate means an estimate of the cost of a qualifying project that is prepared in accordance with Recommended Practice No. 18R–97 in the document of the Association of Cost Engineering entitled “Cost Estimate Classification System” (or a successor document).
Director— The term Director means the Director of the Loan Programs Office.
Expected payment amount— The term expected payment amount means the amount that the Director expects to pay to the Federal Financing Bank under subsection (d)(2)(B) when a qualifying project is placed in service.
Guarantee— The term guarantee has the meaning given the term in section 1701 of the Energy Policy Act of 2005 (42 U.S.C. 16511).
Loan Programs Office— The term Loan Programs Office means the Loan Programs Office of the Department of Energy.
Overrun— The term overrun, with respect to the costs of a qualifying project, means any costs in excess of the point base estimate of the Class 2 estimate approved as described in paragraph (12)(C)(iv).
Point base estimate— The term point base estimate, with respect to a Class 2 estimate, means the value of the Class 2 estimate without adjustment for the accuracy range or contingency.
Project delivery plan— The term project delivery plan means a project plan that includes—
a project execution plan (as defined in Recommended Practice 10S–90 of the Association for the Advancement of Cost Engineering entitled “Cost Engineering Terminology” (or a successor document));
a contract risk allocation strategy that—
aligns cost and risk incentives among all contracted stakeholders; and
follows—
the best practices described in Recommended Practice 67R–11 of the Association for the Advancement of Cost Engineering entitled “Contract Risk Allocation – As Applied in Engineering, Procurement, and Construction” (or a successor document); or
other appropriate industry best practices, as determined by the Secretary; and
a plan for the division of responsibility between contracted stakeholders that describes roles and responsibilities for execution of that project plan.
Qualifying project— The term qualifying project means an advanced nuclear energy project—
that is reasonably expected to be constructed on time and on budget, as determined by the Secretary;
that is—
determined by the Secretary to be reasonably capital-intensive; and
connected to the electric power grid; and
with respect to which—
the loan amount expected to be guaranteed under section 1703 or 1706 of the Energy Policy Act of 2005 (42 U.S.C. 16513, 16517) is—
loaned through the Federal Financing Bank; and
equal to or greater than the amount that is twice the amount of funds obligated to the qualifying project under this section;
the borrower of that amount—
has established and submitted to the Director a project delivery plan;
has established and submitted to the Secretary—
a Class 2 estimate with—
basis of estimate documentation for that Class 2 estimate; and
a qualifying project cost risk analysis;
a resource-loaded integrated project schedule with—
basis of estimate documentation for that resource-loaded integrated project schedule; and
a qualifying project schedule risk analysis; and
a labor survey analysis report with—
basis of estimate documentation for that labor survey analysis report; and
a labor risk analysis; and
has established procedures with the Secretary to ensure enhanced project oversight, including—
a rolling forecast that—
updates the resource-loaded integrated project schedule not less frequently than annually, in alignment with the approved changes in the applicable change management program; and
includes a new qualifying project schedule risk analysis to match the most recent update; and
a meeting between the Secretary, the Director, and senior-level representatives of all contracted stakeholders in the project to review progress and, if necessary, decide corrective actions and responsibilities for implementation, to be held on a quarterly basis until the date on which construction has concluded;
the Director has approved the project delivery plan submitted under clause (ii)(I) prior to financial close; and
the Secretary has approved the project planning documents submitted under clause (ii)(II) prior to financial close.
Qualifying project cost risk analysis— The term qualifying project cost risk analysis means a cost risk analysis that follows—
the best practices described in the document of the Government Accountability Office entitled “Cost Estimating and Assessment Guide: Best Practices for Developing and Managing Program Costs”, numbered GAO–20–195G, and dated March 2020 (or a successor document); or
other appropriate industry best practices, as determined by the Secretary.
Qualifying project schedule risk analysis— The term qualifying project schedule risk analysis means a schedule risk analysis that follows—
the document of the Government Accountability Office entitled “Schedule Assessment Guide: Best Practices for Project Schedules”, numbered GAO–16–89G, and dated December 2015 (or a successor document); or
other appropriate industry best practices, as determined by the Secretary.
Resource-loaded integrated project schedule— The term resource-loaded integrated project schedule means an approved schedule that follows—
the best practices described in the document of the Government Accountability Office entitled “Schedule Assessment Guide: Best Practices for Project Schedules”, numbered GAO–16–89G, and dated December 2015 (or a successor document); or
other appropriate industry best practices, as determined by the Secretary.
Rolling forecast— The term rolling forecast means a process for regularly updating a resource-loaded integrated project schedule.
Secretary— The term Secretary means the Secretary of Energy.
Accelerating Reliable Capacity Program Account—
Establishment— There is established in the Loan Programs Office an account, to be known as the “Accelerating Reliable Capacity Program Account”.
Management— The account shall be managed by the Director.
Use of amounts— The Director may use amounts in the account to make payments pursuant to subsection (d)(2)(B).
Obligation of amounts— Amounts in the account shall be—
contingently obligated to a borrower on the approval by the Secretary of a conditional commitment that includes satisfaction of the requirements for a qualifying project under this section as a condition of financial close, subject to the conditions that—
the borrower shall be considered current so long as the borrower continues to make progress toward satisfying the conditions required for financial close and requirements agreed upon in the conditional commitment, as determined by the Secretary; and
if the Secretary determines that the borrower is not making progress in good faith as described in clause (i), the contingently obligated amounts shall be made available to other borrowers; and
obligated to the applicable borrower at financial close.
Obligation and expenditure— The obligation of amounts in the account shall not be considered to be an expenditure of those amounts unless the amounts are disbursed pursuant to subsection (d)(2)(B).
Funding—
Authorization of appropriations— There is authorized to be appropriated to the Secretary $3,600,000,000 for deposit into the account.
Availability of amounts— Amounts deposited in the account under subparagraph (A) or otherwise shall remain available until expended.
Overrun liability—
Borrower liability for initial cost overruns— With respect to a qualifying project for which a guarantee is provided under section 1703 or 1706 of the Energy Policy Act of 2005 (42 U.S.C. 16513, 16517), the borrower on the guaranteed loan shall be responsible for all overruns until the cumulative expenses of the qualifying project exceed 120 percent of the point base estimate of the Class 2 estimate.
Payment by the Director—
Expected payment amount— With respect to a qualifying project for which a guarantee is provided under section 1703 or 1706 of the Energy Policy Act of 2005 (42 U.S.C. 16513, 16517), the Director shall update the expected payment amount quarterly, subject to the conditions that—
cumulative expenses of the qualifying project have exceeded 120 percent of the point base estimate of the Class 2 estimate;
the quarterly increase to the expected payment amount does not exceed 50 percent of total expenses in that quarter for the qualifying project;
the updated expected payment amount does not exceed the maximum payment amount described in subparagraph (B)(ii);
the applicable guaranteed loan is not in default;
the prospect of increasing the payment amount does not incentivize unnecessary spending; and
any increases to the payment amount are made in accordance with good governance principles.
Payment—
In general— When a qualifying project is placed in service, the Director shall—
determine the final payment amount based on—
the expected payment amount determined under subparagraph (A); and
any additional cumulative expenses of the applicable qualifying project, determined in accordance with that subparagraph; and
pay that final payment amount to the Federal Financing Bank (as the lender of the applicable guaranteed loan) from the account.
Maximum payment amount— The maximum payment amount under this subparagraph for any 1 qualifying project may not exceed the lesser of—
30 percent of the point base estimate; and
$1,200,000,000.
Application of payment— A payment under this subparagraph shall be applied to the principal amount of the applicable guaranteed loan.
Requirement— The Director may make a payment under this subparagraph only if the applicable guaranteed loan is not in default.
Enhanced financing terms for qualifying projects—
In general— Notwithstanding title XVII of the Energy Policy Act of 2005 (42 U.S.C. 16511 et seq.) or any other provision of law, the Director shall offer the enhanced financing terms described in paragraph (2) for a guarantee provided under section 1703 or 1706 of that Act (42 U.S.C. 16513, 16517) with respect to a qualifying project.
Enhanced financing terms described— The enhanced financing terms referred to in paragraph (1) are the following:
Notwithstanding section 1702(c) of the Energy Policy Act of 2005 (42 U.S.C. 16512(c)), a guarantee may be an amount up to 200 percent of the point base estimate of the Class 2 estimate approved as described in subsection (b)(12)(C)(iv) for the qualifying project that is the subject of the guarantee.
The Director shall seek a commitment from the Federal Financing Bank (as lender of a guaranteed loan) to amend or restructure, if appropriate, the applicable guaranteed loan to reflect the revised principal amount after payment under subsection (d)(2)(B).
Quarterly notification and briefing— Not later than 7 days after each quarterly meeting described in subsection (b)(12)(C)(ii)(III)(bb), the Secretary shall submit to the Committee on Energy and Natural Resources and the Committee on Appropriations of the Senate and the Committee on Energy and Commerce and the Committee on Appropriations of the House of Representatives a notification describing the results of that meeting.
Working Group—
Establishment— The Secretary shall establish a working group, to be known as the “Accelerating Reliable Capacity Working Group” (referred to in this subsection as the “Working Group”), to advise the Secretary in the technical, financial, and programmatic aspects of the program established under this section, including providing advice with respect to—
developing standards for project delivery plans;
procedures for the enhanced project oversight described in subsection (b)(12)(C)(ii)(III); and
industry best practices.
Membership— Members of the Working Group shall be appointed by the Secretary, but shall include—
representatives of—
private sector advanced nuclear reactor technology developers; and
the Federal Financing Bank or another Federal lending program;
independent technical experts in nuclear energy, engineering, or project management; and
representatives of any other entity that the Secretary determines appropriate.
Sec. 3 Exception to denial of double benefit provision for certain utilities and military installations
Section 50141(d)(3) of Public Law 117–169 (136 Stat. 2043) is amended—
in subparagraph (C), by striking “or” at the end;
in subparagraph (D), by striking the period at the end and inserting a semicolon; and
by adding at the end the following:
“(E) projects partnering with, including projects owned by or under the control of, a Federal power marketing administration or the Tennessee Valley Authority;
“(F) projects partnering with—
“(i) an entity that procures energy for a military installation (as defined in section 2801(c) of title 10, United States Code) that is managed by the Secretary of Defense or a contractor of the Secretary of Defense; or
“(ii) the General Services Administration for the purpose of energy procurement;
“(G) projects benefitting from National Laboratories (as defined in section 2 of the Energy Policy Act of 2005 (42 U.S.C. 15801)) or user facilities for testing, data collection, permitting, or other allowable uses, as determined by the Secretary; or
“(H) projects using nuclear fuel procured under or pursuant to the Nuclear Fuel Security Act of 2023 (42 U.S.C. 16282).”