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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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Tuesday
Dec172013

"A Christmas Peril": Obama DOE poised to risk $8.3 billion of taxpayer money on Vogtle 3 & 4 nuclear loan guarantee

Street theater performers, activist supporters, and members of the news media in front of DOE HQ on Dec. 11, 2009 protesting nuclear loan guarantees in solidarity with an International Climate Day of ActionIn late November, partners in the Vogtle 3 & 4 new reactor construction project in Georgia announced that they are "almost over the finish line" in negotations with the U.S. Department of Energy (DOE) regarding an $8.3 billion nuclear loan guarantee.

Not only would federal taxpayers back this massive loan guarantee -- they would also provide the loan, via the federal taxpayer-funded U.S. Finance Bank.

Giving the deal the highest possible profile, President Obama himself announced the award in Feb. 2010. However, DOE and proponents like Southern Nuclear have been squabbling ever since, about how much company "skin in the game" would be required to secure the loan guarantee. Documents unearthed thanks to a multi-year court battle waged by Southern Alliance for Clean Energy (SACE) under the Freedom of Information Act showed that a paltry $17 to $52 million were being asked at certain points in time. Despite this, Vogtle 3 & 4's pushers have been very reluctant for nearly four years now to sign on the dotted line.

The Vogtle 3 & 4 nuclear loan guarantee amounts to 15 times more taxpayer money at risk than was lost in the infamous Solyndra solar loan guarantee scandal ($535 million). Only, Vogtle 3 & 4's risk of default is significantly higher than Solyndra's was!

Meanwhile, Vogtle 3 and 4's behind-schedule, over-budget construction proceeds, funded by the gouging of ratepayers under Georgia's Construction Work in Progress (CWIP) charges on electricity bills -- illegal in most states.

In addition, over the past year, DOE has also forked over another $450 million in taxpayer subsidies to the nuclear power industry, in R&D support for "Small Modular Reactors." However, as pointed out by Beyond Nuclear board member Kay Drey of St. Louis, at 200-300 Megawatts-electric, SMRs should not be called "small." Two subsidy installments of around $225 million each have gone to NuScale-Fluor and Babcock & Wilcox-Bechtel, targeting construction at Idaho and the Tennessee Valley Authority, respectively.

Dr. Ed Lyman, Senior Scientist in the Global Security Program at Union of Concerned Scientists, has published a report, Small Isn't Always Beautiful: Safety, Security, and Cost Concerns about Small Modular Reactors.

Dr. Arjun Makhijani, President of Institute for Energy and Environmental Researcy, has also published a report, Light Water Designs of Small Modular Reactors: Facts and Analysis. The report is accompanied by an audio recording of a press conference.

On Dec. 11, 2009, Beyond Nuclear teamed up with Public Citizen and other allies like NIRS and FOE for a street theater at DOE HQ in Washington, D.C. entitled "A Christmas Peril." (see photo, above left; thanks to Public Citizen for an excellent video record of the fun event, complete with a soundtrack!) The performance, featuring the Ghosts of Nuclear Power's Past, Present, and Future, warned about and protested against President Obama's and DOE's decision, just a couple of months later, to award the $8.3 billion nuclear loan guarantee for Vogtle 3 & 4. The warning is as relevant as ever, now that Obama's DOE is poised to ink the deal, nearly four long years later.

Contact President Obama and Energy Secretary Moniz. Urge them to cancel the financially risky Vogtle 3 & 4 nuclear loan guarantee, before taxpayers get left holding the bag for many billions of dollars of unpaid loans if and when the project defaults. And urge them to stop subsidizing so-called SMRs -- after a half-century of enjoying the lion's share of taxpayer and ratepayer energy subsidies, nuclear power should at long last either stand on its own two feet in the marketplace, or else crawl into the dust bin of history where it belongs.

Also urge your U.S. Senators and U.S. Representative to block any further subsidies, including loan guarantees, for nuclear power. They can be contacted via the U.S. Capitol Switchboard at (202) 224-3121.

Saturday
Aug032013

Nuclear revolving door gobbles up billions of dollars of ratepayers' money, threatening to move onto taxpayers next

Commissioner Geoffrey Merrifield's NRC file photoWhile still a U.S. Nuclear Regulatory Commission (NRC) Commissioner, Geoffrey Merrifield did the nuclear power industry a big favor. He spearheaded a seemingly simple, but significant, change in NRC regulations, which paved the way for new reactor construction, unfettered by bothersome environmental safeguards. Merrifield shephered through a change in the definition of the word "construction." Now, nuclear utilities could build any aspect of a nuclear power plant, save for the reactor and its containment building, without having to first complete an environmental impact statement, as required by the National Environmental Policy Act (NEPA). Thus, large aspects of a new reactor construction job -- such as foundation excavations for the reactor complex, or construction of the turbine building -- could proceed apace, building "facts on the ground," and momentum that would be hard to stop.

 

Merrifield capped such corruption by leaving NRC immediately after his dirty work, and going to work for the Shaw Group, which specializes in -- you guessed it -- new reactor construction! This example of the nuclear revolving door between supposed government regulator and industry even made a number of senior managers at NRC uneasy about Merrifield's blatant, self-serving conflict of interest.

 

Now, as reported by the Atlanta Progressive News, to such corruption must be added incompetence, raising not only financial risks, into the billions of dollars, but radiological risks that could impact millions of lives:

 

'...Chicago Bridge and Iron (CB&I), formerly known as Shaw Modular Solutions, makes modules being used to assemble four Westinghouse AP1000 reactors being built at Plant Vogtle in Georgia and V.C. Summer in South Carolina.

“CB&I is unable to provide properly constructed modules... and [have demonstrated a] continued inability to reliably meet the quality and schedule requirements of the project," Barbara Antonoplos, a ratepayer, testified, citing a report from the utility's regulatory staff in South Carolina.

"These problems have existed from the beginning and been raised in every other CB&I hearing and still there is no fix... they [Georgia Power] still do not have a competent outfit making parts and once the new parts get delivered to Vogtle, they are repairing them to make them acceptable.  This alarms me because incompetence of this magnitude breeds disaster especially when it comes to construction of a nuclear device. There is no way these reactors can be considered safe... when ‘patch it together’ is the best construction model they are able to come up with," Antonoplos said.

"Ongoing failures of this sort result in escalating cost and I don't believe you should force ratepayers to foot the bill for such gross incompetence," Antonoplos said.

Southern Company’s projections do not include the cost of the lawsuit they’re engaged in with their contractor, The Shaw Group/Chicago Bridge and Iron, nor the full cost of not getting Federal Loan Guarantees, for which the negotiation deadline has been extended three times according to Georgia WAND's website...'

Alex Flint, NEI's Senior Vice President for Governmental AffairsSpeaking of nuclear revolving doors and federal loan guarantees, the top lobbyist for the nuclear power industry, Alex Flint at the Nuclear Energy Institute (NEI, photo left), has passed through multiple times. For one, he "served" as the staff director on the U.S. Senate Energy and Natural Resources (ENR) Committee, under Sen. Pete Domenici (R-NM), on whose personal staff Flint had previously "served." The ENR Committee hatched the passage of the Energy Policy Act of 2005. In addition to the $13 billion of direct taxpayer subsidies in that bill aimed at promoting new atomic reactor development, Flint wrote the federal nuclear loan guarantee language. After the bill was enacted into law, Flint left "public service" and went to work at NEI, where he remains to this day.

In a very real sense, Flint wrote his own (likely high six-figure, if not more) paycheck, while "serving the public" -- up for dinner to the nuclear industry, that is!

In late 2007, $18.5 billion for new reactor loan guarantees, and another $4 billion in new uranium enrichment loan guarantees, were approved by Congress and George W. Bush. However, even though President Obama, in Feb. 2010, awarded $8.3 billion in new reactor loan guarantees for the proposed new Vogtle 3 & 4 reactors -- giving it the highest profile possible, by making the announcement himself -- Southern Co. has never agreed to the terms. Too much of its own "skin in the game" is being asked of it, for such a financially risky scheme. Thus, no nuclear loan guarantees have yet been finalized.

Thursday
May302013

Risk of "dirty shutdown" at Paducah gaseous diffusion uranium enrichment plant

Paducah Gaseous Diffusion Plant. Photo credit: USEC/U.S. Department of EnergyIn a two-part series, Geoffrey Sea of Neighbors for an Ohio Valley Alternative (NOVA) has exposed deep financial troubles which could lead to major radiological risks at the Paducah gaseous diffusion uranium enrichment plant in Kentucky. Mind boggling mismanagement, or worse, by U.S. Enrichment Corporation (USEC) and the U.S. Department of Energy (DOE) are to blame.

Part I, entitled "Countdown to Nuclear Ruin at Paducah," was published May 22nd, and warned that there were just 9 days left to avert a "dirty shutdown" in the many miles of enrichment cells. If the uranium laden gas solidifies within the system, it will make eventual decommissioning and clean up astronomically expensive for taxpayers, and radiologically risky for workers.

Part II, "Slow Cooker at Paducah Comes to a Boil,"  was published May 28th, with only three days left to avert dirty shutdown.

Paducah has operated since the 1950s. Sea reports that Paducah, which employs the highly energy intensive gaseous diffusion uranium enrichment process, has the single biggest electric meter in the country, electrified by two dirty coal plants. It is also one of the single biggest emitters of ozone layer destroying CFC-114, which also happens to be a very potent greenhouse gas.

In September 1999, Joby Warrick of the Washington Post broke the story that post-reprocessing uranium from Hanford Nuclear Reservation, containing fission products and transuranics, had been secretively run through Paducah. Local residents, such as Ron Lamb, had already been long protesting Technetium-99 in his drinking well water, however. Paducah whistleblower Al Puckett helped expose a secret dumping ground for radioactive and hazardous wastes on site. Such revelations help to explain the high cancer rate amongst Paducah workers and area residents.

As Sea reports, USEC is still seeking a $2 billion federal loan guarantee from the Obama administration for its proposed American Centrifuge Plant at Portsmouth, Ohio. Newly confirmed Energy Secretary Ernest Moniz has deep ties to USEC, both during his time in the Clinton DOE, as well as afterwards, as a paid private consultant.

Thursday
May092013

"Worst Week Since Fukushima: 4 Setbacks in 3 Days are Latest Stumbles for Nuclear Power Industry"

Former NRC Commissioner Peter Bradford, and energy economist Mark Cooper, both of the Vermont Law School, as well as Dan Hirsch of the Committee to Bridge the Gap, held a telephone press conference yesterday on the subject of "WORST WEEK SINCE FUKUSHIMA: 4 MAJOR SETBACKS IN 3 DAYS ARE LATEST STUMBLES FOR U.S. NUCLEAR POWER INDUSTRY." An audio recording of the news conference has been posted online.

The four setbacks in three days include: 1) the cancellation of two proposed new reactors at South Texas Project, because they violate U.S. law against foreign ownership of nuclear power plants; 2) Southern California Edison's threat that if NRC does not allow it to restart operations at its crippled San Onofre nuclear power plant, it will permanently shutdown both reactors there; 3) Duke Energy's cancellation of two proposed new atomic reactors at its Shearon Harris nuclear power plant in North Carolina; and 4) Florida's amendment to its previously highly permissive "advance cost recovery" or "Construction Work in Progress" law, via which ratepayers have been gouged to pay for proposed new reactors, when there is no guarantee the proposed new reactors will ever actually get built or generate electricity.

Bradford also added the May 7th shutdown of Dominion's Kewaunee atomic reactor in WI -- despite the 20 years of operating license still left to it -- as another example of the "worst week since Fukushima" for the U.S. nuclear power industry.

Both Bradford and Cooper spoke out against federal nuclear loan guarantees for than once during the press conference as throwing good money after bad on a failed "Nuclear Renaissance" now in headlong retreat.

Sunday
Mar032013

Nuclear Relapse? Canceled! Nuclear power? Game over!

Peter BradfordIn the Bulletin of Atomic Scientists, Peter Bradford explains why even massive federal taxpayer backed nuclear loan guarantees have not been able to jumpstart the so-called "Nuclear Renaissance" in the United States. 

As reported by ScienceDaily in an article entitled "U.S. May Face Inevitable Nuclear Power Exit,"  the Bulletin of Atomic Scientists (BAS) has concluded its three part "Nuclear Exit" series with a look at the United States. The previous two installments examined the nuclear power phase-out in Germany, and the nuclear power status quo in France.

The BAS U.S. coverage features former U.S. Nuclear Regulatory Commission Commissioner, Union of Concerned Scientists board member, and Vermont Law School professor Peter Bradford's "How to close the U.S. nuclear industry: Do nothing," which concludes that, without massive taxpayer or ratepayer infusions, almost all proposed new reactors will not happen, and currently operating reactors will permanently shutdown by mid-century, unless the NRC rubber-stamps 80 years of operations (as opposed to the current, already risky 60).

In a section entitled "Picturing a U.S. phase-out," Bradford writes:

"The countries that have recently decided to phase out nuclear energy have done so by governmental fiat, complete with statutory deadlines both for individual reactors and for nuclear power in general. But no such sweeping action is really necessary in countries that have chosen to procure power generation through market mechanisms. The US experience demonstrates that absence of governmental intervention will create a glide path, determined in part by how long a country is prepared to allow its oldest reactors to operate, but in fact by the interplay between gas-driven electricity prices and the point in time at which older plants must make significant capital investments." (emphasis added)

Bradford points out that "By this standard, units at Crystal River and San Onofre--currently closed by major equipment failures--appear to be serious shutdown candidates, though they may survive, because they are located in Florida and California, respectively, states in which regulators can override market verdicts and impose their repair costs on customers."

In fact, Duke/Progress has thrown in the towel on Crystal River, announcing that it is now permanently shutdown. And Friends of the Earth, along with a groundswell of grassroots anti-nuclear activism in southern California, is doing all it can to keep San Onofre Units 2 and 3 shutdown for good, as well.

A spokesman for Dominion Nuclear admitted that the "purely economic reasons" which led to the utility's decison to close its Kewaunee atomic reactor on the Lake Michigan shoreline in Wisconsin -- the first atomic reactor shutdown announcement in 15 years in the U.S. -- was the inability to make needed, major safety repairs andturn a profit, given the competitive electricity market.

And Entergy Nuclear's brand new CEO, Leo Denault, admitted to Reuters that numerous of his "dirty dozen" atomic reactors -- especially the merchant plants (those in deregulated, competitive electricity markets) -- face tough economic challenges, due to costly upkeep (a.k.a., essential safety-significant repairs and component replacements).

Reuters reported: "[Denault] said some plants are in the more challenging economic situations for a variety of reasons, including 'the market for both energy and capacity, their size, their contracting positions and the investment required to maintain the safety and integrity of the plants.'" (emphasis added)

At its Palisades atomic reactor on the Lake Michigan shore in southwest Michigan, Entergy has chosen to foregonumerous major, needed repairs (such as replacing the badly corroded reactor lid; replacing the deteriorated steam generators, for the second time in the plant's history; dealing with the worst embrittled reactor pressure vessel in the U.S.; making needed fire protection upgrades, etc.) for six long years now, apparently in order to "balance the books" -- that is, to prioritize profits (and executive salaries, and shareholder returns) over public safety.