A federal loan program for coal-fired power plants in rural areas has been suspended due to concerns over climate change and the costs of the program. The Rural Utilities Service, part of the U.S. Department of Agriculture, issued $1.3 billion in loans to coal plants since 2001 under the program. However, RUS officials said costs for new coal-fired power plants have been rising at about 30 percent a year. The White House Office of Management and Budget asked for the suspension following congressional inquiries last month. “This is a big decision,” said Abigail Dillen of Earthjustice. “It says new coal plants can’t go to the federal government for money at least for the next couple years, and these are critical times for companies to get these plants built.” At least four coal plants had been lined up for funding at the time of the suspension and now must either wait it out or seek funding from private sources. The RUS coal-plant loans could resume in 2010 after an analysis of the risks.

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