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Loan Guarantees

New reactor construction is so expensive and unpredictable that no U.S. utility is willing to take the risk without the backing of federal loan guarantees, potentially in the hundreds of billions of dollars. Beyond Nuclear and others fight to prevent the mature nuclear industry from seizing any such subsidies which are better spent on true climate solutions such as renewable energy and energy efficiency programs.

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Wednesday
Mar292017

SCAMA (South Carolinians Against Monetary Abuse) Obtains Records Indicating Liens Filed by Fluor, Company Constructing New Nuclear Reactors in South Carolina and Georgia, Against SCE&G and Georgia Power/Southern Nuclear

As reported in a press release posted on the website of Savannah River Site Watch.

Note that $8.3 billion of taxpayer-backed nuclear loan guarantees are at risk of being lost, if the Vogtle 3 & 4 new reactor construction project defaults on its loan repayment. This is 15 times the amount of taxpayer money lost in the Solyndra solar loan guarantee default, as Michael Mariotte of NIRS pointed out many years ago.

Critics of the nuclear loan guarantee program warned about such risks in May 2001, when the Cheney Energy Task Force Report first floated the proposal of nuclear loan guarantees; again in 2005 when nuclear loan guarantees were made legal by passage of the Energy Policy Act; and again in 2007, when Congress and George W. Bush approved more than $20 billion worth of new reactor loan guarantees; and again leading up to the 2014 Obama administration approval of the $8.3 billion nuclear loan guarantee for Vogtle 3 and 4, without requiring any skin in the game by any of the companies involved -- an economic moral hazard with a radioactive twist!

Wednesday
Mar292017

ADVISORY: Experts discuss concerns with Westinghouse bankruptcy filing and the possible impacts on new nuclear construction projects in Georgia and South Carolina

As reported in a Southern Alliance for Clean Energy (SACE) press advisory.

Note that $8.3 billion of taxpayer-backed nuclear loan guarantees are at risk of being lost, if the Vogtle 3 & 4 new reactor construction project defaults on its loan repayment. This is 15 times the amount of taxpayer money lost in the Solyndra solar loan guarantee default, as Michael Mariotte of NIRS pointed out many years ago.

Critics of the nuclear loan guarantee program warned about such risks in May 2001, when the Cheney Energy Task Force Report first floated the proposal of nuclear loan guarantees; again in 2005 when nuclear loan guarantees were made legal by passage of the Energy Policy Act; and again in 2007, when Congress and George W. Bush approved more than $20 billion worth of new reactor loan guarantees; and again leading up to the 2014 Obama administration approval of the $8.3 billion nuclear loan guarantee for Vogtle 3 and 4, without requiring any skin in the game by any of the companies involved -- an economic moral hazard with a radioactive twist!

Wednesday
Mar292017

Fate of Southern Company and SCANA New Nuclear Power Projects Unknown as Lead Contractor Westinghouse Files for Bankruptcy

As reported by a Southern Alliance for Clean Energy press release.

Note that $8.3 billion of taxpayer-backed nuclear loan guarantees are at risk of being lost, if the Vogtle 3 & 4 new reactor construction project defaults on its loan repayment. This is 15 times the amount of taxpayer money lost in the Solyndra solar loan guarantee default, as Michael Mariotte of NIRS pointed out many years ago.

Critics of the nuclear loan guarantee program warned about such risks in May 2001, when the Cheney Energy Task Force Report first floated the proposal of nuclear loan guarantees; again in 2005 when nuclear loan guarantees were made legal by passage of the Energy Policy Act; and again in 2007, when Congress and George W. Bush approved more than $20 billion worth of new reactor loan guarantees; and again leading up to the 2014 Obama administration approval of the $8.3 billion nuclear loan guarantee for Vogtle 3 and 4, without requiring any skin in the game by any of the companies involved -- an economic moral hazard with a radioactive twist!

Wednesday
Mar292017

ENVIRONMENTAL GROUP CHEERS INCREASING LIKELIHOOD OF VOGTLE CANCELLATION

FOR IMMEDIATE RELEASE: March 29, 2017

Contact: Glenn Carroll, 404-378-4263, 404-432-8727 (cell), atom.girl@nonukesyall.org

ENVIRONMENTAL GROUP CHEERS INCREASING LIKELIHOOD OF VOGTLE CANCELLATION

Nuclear Watch South Statement on Westinghouse Bankruptcy (with Timeline)

3/29/17 ATLANTA: In the wake of Vogtle lead contractor Westinghouse's bankruptcy announcement yesterday, coupled with Toshiba's revelation that it is $9.9 billion in debt from the four reactors under construction in the U.S. (two in Georgia, two in South Carolina), Atlanta-based environmental group Nuclear Watch South is issuing a detailed timeline of Vogtle 3 & 4 milestones and missteps.

Nuclear Watch South Coordinator Glenn Carroll articulated the group's position in a brief statement:

"Georgia's legislators and Public Service Commissioners enabled Georgia Power to obtain $2 billion in up-front charges from its customers which has increased Georgia Power's profit margin by over 20% in the Vogtle construction years.

"Vogtle owners have borrowed another $8.3 billion of U.S. taxpayer money from the U.S. Department of Energy (DOE). It is unclear how the money can be paid back since it is increasingly likely that Vogtle will not ever be built, but, at a minimum, Georgia Power should not be allowed to keep its windfall profits at the public's expense.

"A full investigation and accounting needs to be done as to where this mind-boggling amount of public money has been spent with so little to show for it as Vogtle is still only 36% finished after six years under construction.

"As the revelations unfold of how breathtakingly out-of-touch several large multinational companies are with their own operations, purchases, and accounting, we are very lucky that these inept actors were unsuccessful in placing their product, two colossally dangerous radioactive waste factories, in the Georgia landscape.

"It is time to stop wasting time, energy and money on Vogtle 3 & 4 which aren't needed anyway. Our renewables future is close at hand. It is time to get on with it."

Points of interest in the timeline:

• Construction stalled until 20 months after the U.S. Nuclear Regulatory Commission (NRC) issued the license for Vogtle 3 & 4 in 2012. (NRC stops construction due to improperly installed concrete.)

• 2013, Nuclear Watch South testified in the 8th Vogtle Construction Monitoring Review (VCMR), using data obtained from Georgia Power annual reports, that Vogtle 3 & 4 were not needed because Georgia Power's sales had gone flat for several years and the company was chronically overbuilt. Expert testimony advised that it would be cheaper to mothball construction until the market leveled out, or to cancel the project outright as Georgia Power was legally entitled to recover expenses if a certified plant were to be cancelled. Nuclear Watch South is the only public interest group to submit expert testimony to the Georgia Public Service Commission (PSC) in the VCMR proceedings.

Five days later (2013), Westinghouse and Georgia Power went behind closed doors to sue each other. (It would be two years before Westinghouse would go public with their settlement agreement in 2015, setting into motion the dramatic revelations and events of recent weeks.)

• Four weeks after Nuclear Watch South's testimony, November 2013, the first concrete was poured at Vogtle 3 & 4 in November 2013.

• One month after construction starts, December 2013, the NRC finds significant breakdown in Quality Assurance at CB&I

• December 2014, PSC construction monitors testify that it is "imprudent" to proceed without an Integrated Project Schedule (which we still do not have)

• 2016, Nuclear Watch South testifies in the 14th VCMR that Georgia Power is making historic profits on Vogtle construction and it would still be cheaper for consumers to cut losses by cancelling Vogtle construction

CHRONOLOGY OF VOGTLE 3 & 4

2009 

February - Georgia legislature passes Georgia Nuclear Energy Financing Act AKA SB31, CWIP (Construction Work in Progress, NCCR (Nuclear Construction Cost Recovery); March - Georgia Public Service Commission approves Vogtle 3 & 4 for $14 billion; April - Georgia Power gives green light to Westinghouse and Shaw (formerly Stone & Webster) to start clearing 40-acre endangered longleaf pine forest; August - NRC issues Early Site Permit; October - NRC demands design revision for AP1000 shield building; December - construction monitors testify in 1st Vogtle Construction Monitoring Review (VCMR) that delays are likely due to NRC revisions

2011      

1/1/11 Georgia Power begins charging Nuclear Construction Cost Recovery tariff on small business and residential power bills; 3/11/11 Fukushima earthquake and tsunami cause explosions and meltdowns of Fukushimi Dai-ichi 1, 2 & 3; 8/9/11 Westinghouse AP1000 design receives final NRC approval (note: no post-Fukushima changes are required)

2012     

2/9/12 NRC issues Georgia Power combined operating license for Vogtle 3&4; April - NRC stops work due to improper rebar installation; December - reactor vessel nearly falls off train near Port of Savannah

2013      

February - CB&I buys Shaw for $3 billion; 2/23/13 Rumor that CB&I will buy Westinghouse; 10/15/13 Nuclear Watch South proves before Georgia PSC that Vogtle is not needed and it would be cheaper to stop construction in the 8th VCMR; 10/20/13 Westinghouse/CB&I & Georgia Power begin litigation; 11/13/13  First concrete poured for Vogtle 3 & 4; December - NRC finds a “significant breakdown in the Quality Assurance Program of CB&I”

2014      

Litigation continues between Westinghouse/CB&I and Georgia Power

February - DOE loan guarantees approved; September - Georgia Power reports 5,000 workers at Vogtle 3 & 4; December - PSC monitors testify “imprudent” to proceed without Integrated Project Schedule in the 11th VCMR

2015     

Litigation continues between Westinghouse/CB&I and Georgia Power

August - SACE submits to PSC that the total cost of Vogtle to consumers will be $65 billion; October - Westinghouse & Georgia Power settlement on cost overruns; Westinghouse buys CB&I for $229 million; December - Georgia Power blocks Nuclear Watch South testimony about its Vogtle profits in the 13th VCMR

2016     

February - GA PSC agrees to unprecedented mid-project prudency review of cost overruns; March - Fluor takes over as Vogtle construction manager; 4/1/16 - Vogtle 3 deadline is missed; 4/16/16 - 5,500 workers on site; 6/30/16 - Nuclear Watch South testifies before PSC that Georgia Power is making historic profits on Vogtle at the expense of Georgia ratepayers in the 14th VCMR; 7/26/16 - CB&I sues Westinghouse over $2 billion closing agreement; 12/20/16 - GA PSC approves $2 billion in cost overruns, boosting Vogtle price-tag to $18 billion; 12/27/16 - Toshiba announces $3 billion write-down for nuclear division

2017     

2/14/17 Toshiba announces $6 billion nuclear write-down; 3/9/17 Westinghouse bankruptcy rumors; 3/14/17 Toshiba announces $9 billion nuclear write-down; 3/21/17 Fluor files lien against Georgia Power; 3/28/17 Westinghouse announces bankruptcy, Toshiba announces $9.9 billion nuclear write-down

###

References:

Key Georgia Power Financial and Operating Data 2005-2015

http://www.nuclearwatchsouth.org/pdfs/4-16_GPC%20Key%20Fin%20Stats.pdf 

Georgia Power Profits 2005-2015

http://nuclearwatchsouth.org/pdfs/Georgia%20Power%20Profits%202005-2015.pdf

Georgia Power Sales Volume 2005-2015

http://nuclearwatchsouth.org/pdfs/GPC%20Sales%20Volume%202005-2015.pdf

Georgia Power Capacity Utilization 2005-2015

http://nuclearwatchsouth.org/pdfs/GPC%20Capacity%20Utilization%202005-2015.pdf

Fluor lien against Georgia Power/Southern Nuclear

 http://www.srswatch.org/uploads/2/7/5/8/27584045/fluor_lien_against_georgia_power_snc_march_17_and_23_2017.pdf

Wednesday
Mar292017

Westinghouse Files for Bankruptcy, in Blow to Nuclear Power

As reported by the New York Times.

In a statement on Wednesday, Toshiba said Westinghouse and affiliated companies were “working cooperatively” with the owners to arrange for construction to continue. In recent days, the affected companies issued statements saying they were monitoring the situation and exploring their options, as did the Energy Department, which has authorized $8.3 billion in federal loan guarantees for the Georgia project.

“We are keenly interested in the bankruptcy proceedings and what they mean for taxpayers and the nation,” said Lindsey Geisler, a Department of Energy spokeswoman. “Our position with all parties has been consistent and clear: We expect the parties to honor their commitments and reach an agreement that protects taxpayers, promotes economic growth, and strengthens our energy and national security.”

Note that $8.3 billion of taxpayer-backed nuclear loan guarantees are at risk of being lost, if the Vogtle 3 & 4 new reactor construction project defaults on its loan repayment. This is 15 times the amount of taxpayer money lost in the Solyndra solar loan guarantee default, as Michael Mariotte of NIRS pointed out many years ago.

Critics of the nuclear loan guarantee program warned about such risks in May 2001, when the Cheney Energy Task Force Report first floated the proposal of nuclear loan guarantees; again in 2005 when nuclear loan guarantees were made legal by passage of the Energy Policy Act; and again in 2007, when Congress and George W. Bush approved more than $20 billion worth of new reactor loan guarantees; and again leading up to the 2014 Obama administration approval of the $8.3 billion nuclear loan guarantee for Vogtle 3 and 4, without requiring any skin in the game by any of the companies involved -- an economic moral hazard with a radioactive twist!