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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

Westinghouse files for bankruptcy, with 4 U.S. nuclear reactors unfinished

As reported by MarketWatch.

Please note that $8.3 billion of taxpayer-back 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!

Friday
Mar102017

U.S. taxpayers at risk of losing $8.3 billion if Vogtle 3 & 4 new reactor project defaults on its loan

As reported by Japan Times in an article entitled "Concerns emerge over guarantee for Toshiba's U.S. nuclear project," U.S. taxpayers are at risk of losing $8.3 billion, if the Vogtle 3 & 4 new reactor construction project in Georgia defaults on its loan repayment. That risk has increased significantly in recent months, as Toshiba-Westinghouse, a Japanese firm, teeters on the brink of bankruptcy.

Several years ago, President Barack Obama's Energy Secretary, Ernest Moniz, awarded the proponents of the Voglte 3 & 4 new reactors -- including Southern Nuclear -- an $8.3 billion federal nuclear loan guarantee, requiring no credit subsidy fee. That is, the companies have zero skin in the game.

The loan guarantee was meant to attract private Wall Street investment firms, but did not. Thus, ironically, the loan itself came from the U.S. Finance Bank, which is federal taxpayer funded. This puts federal taxpayers at even more risk from a Vogtle 3 & 4 loan default.

$8.3 billion is 15 times more taxpayer money at risk, than was lost during the Solyndra solar scandal.

Cost overruns and construction schedule delays have plagued Vogtle 3 & 4's construction from the beginning, several years ago. The problems have contributed significantly to Toshiba-Westinghouse's economic duress, leading Toshiba to exit the new reactor business, and to seek to off-load Westinghouse.

Thursday
Jan052017

How Georgia officials pantsed ratepayers over the holidays

Mr. Burns, Nuclear Scrooge of Simpsons infamy, wasn't stingy when it came to handing out "Atomic Fireballs" as a stand in for the radioactive waste the nuclear industry would like the public to "consent" to "swallowing," during a protest outside NRC's "Nuke Waste Con Game" public comment mtg. in Perrysburg, OH, 2013. While Radioactive Man is on the take, re: the Atomic Fireballs, it is Planet Earth, and all future generations of all living things, on the receiving end of the subsidized high-level radioactive waste generation, as at Vogtle 3 & 4 in GA.

[Please note: in ADDITION TO the ratepayer robber described below, the new reactors under construction at Vogtle 3 & 4 are ALSO on the receiving end of $8.3 billion (yep, with a B!) in federal taxpayer-backed nuclear loan guarantees. Georgia Power and Southern Nuclear has NO skin in the game -- economic "moral hazard" compounded with a radioactive twist!]

As reported by Matt Kempner in an Atlanta Journal-Constitution editorial:

...The Georgia Public Service Commission — a body of five officials that most voters don’t even realize existsyanked Georgia consumers’ pants down to their ankles. One thing they exposed in the process: a big gap in the state’s system for regulating a powerful business monopoly.

It took PSC commissioners less than six minutes, without debate, to unanimously slap customers of Georgia Power with responsibility to pay for billions of dollars in cost overruns tied to the for-profit company’s expansion of nuclear Plant Vogtle. The PSC allowed only the barest of reductions in Georgia Power’s profit margins. Even that is a temporary measure compared to decades the company is likely to be pulling in fully caffeinated profits in this arrangement.

But ignore that, because the PSC also ordered that a note be inserted in Georgia Power bills to declare, essentially, what a deal you’re getting.

They decided to include this message because, well, if you just look at your Georgia Power bill you won’t actually notice anything that looks like savings.

In reality, the PSC’s Dec. 20 vote didn’t give Georgia Power and its parent the Southern Company the entire moon, just most of it.

That’s not the way PSC commissioner Stan Wise saw it.

“It’s an extraordinary balance of interests of all the parties,” Wise said during the hearing.

Some others, like consumer advocacy and environmental group leaders, disagreed. But the most troubling issue is how weak of an effort the state put forth to actually do its job... [emphasis added]

Similarly, it took the U.S. Nuclear Regulatory Commissioners less than a minute to rubber-stamp a 20-year license extension at Fermi 2 in Michigan, on Dec. 23, 2015. The NRC Commissioners "Affirmation Session" took place in an NRC HQ building largely devoid of human beings -- everyone had already taken off for the holiday break. Nevermind that Fermi 2 is a Fukushima Daiichi twin desighed General Electric Mark I boiling water reactor. We've all seen what THOSE are capable of!

And the radioactive Grinches who stole Christmas, at the Vogtle 3 & 4 new reactors construction site in Waynesboro, GA, and at Fermi 2, laughed all the way to the bank.

Saturday
Jan232016

#Georgia Power move at troubled Vogtle #nuclear project signals $2.5B in cost overruns & 39 months of delays

Thanks to Scott Stapf of the Hastings Group for the tweet above, which points to this August Chronicle article.

Saturday
Aug292015

"Gas deal could signal Southern’s drift from new nuclear projects"

As reported by the Atlanta Journal Constitution, a $12 billion deal merging Southern Co. and the AGL natural gas utility could mark the end of the "nuclear renaissance" for Southern.

The article reports:

This deal signals that “the nuclear renaissance is over for Southern,” said Robert “Bobby” Brown, a regulatory lawyer and former member of Georgia’s utility regulator, the Public Service Commission.

The article goes on:

The Atlanta company is building two new nuclear power units at its Vogtle site in Georgia and an advanced-technology coal-fired plant in Mississippi. Both those projects are years behind schedule and have resulted in billions of dollars of cost overruns that will be born by Southern’s shareholders or customers, or both. (emphasis added)

The Obama administration awarded Southern and its partners at Vogtle 3 & 4 a whopping $8.3 billion in federal taxpayer-back loans and loan guarantees. If the project defaults on its loan repayment, federal taxpayers would be left holding the bag.

That's 15 times more money than was lost to the U.S. Treasury by the Solyndra solar loan guarantee default. And Vogtle 3 & 4's risk of default is higher than Solyndra's was determined to be when the solar loan guarantee was awarded.

In addition to taxpayer subsidies, Vogtle 3 & 4 has been financed by "Construction Work in Progress" -- surcharges on ratepayers' electricity bills that are illegal in most states.

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