Rewarding Failure: Taxpayers on Hook for $12 Billion Nuclear Boondoggle

Guest Blog | April 18, 2019 | Georgia, Nuclear, Utilities

This guest blog was posted with permission from The Hill and originally appeared on, April 2nd, 2019.
It was written by Debbie Dooley and Sara Barczak. Dooley is one of the national co-founders of the American tea party movement and has been a conservative activist since 1976 who also formed “Conservatives for Energy Freedom.” Barczak is the former Regional Advocacy Director with the Southern Alliance for Clean Energy.


Plant Vogtle NPP – Dec 16 2018 (c) High Flyer – [email protected]

There was plenty of fanfare recently at Georgia’s Plant Vogtle nuclear construction site with elected officials, including Georgia’s Governor Brian Kemp and all five Georgia Public Service Commissioners, clamoring for photo ops with U.S. Energy Secretary Rick Perry. What we could not see in those photos, and what was not mentioned during the day’s speeches, is the embarrassing reality that Vogtle’s nuclear expansion is billions of dollars over budget, its completion is far from certain, and the federal government is once again coming to the rescue.

If the project fails, will those smiling faces take responsibility for throwing billions of good dollars after billions of bad, especially when forewarned? Unfortunately for Georgia ratepayers and U.S. taxpayers, regardless of who shoulders the blame, they will be the ones stuck footing the bill.

In March, Secretary Perry announced the finalization of $3.7 billion in taxpayer-backed federal loan guarantees for the Vogtle project. This came over repeated objections by taxpayer and consumer watchdog organizations and despite numerous serious hurdles remaining for the only new nuclear power project still under construction in the United States.

More importantly, these newly-finalized loan guarantees were on top of $8.3 billion in federal loan guarantees that the project partners, Southern Company’s Georgia Power, Oglethorpe Power Corporation, and the Municipal Electric Authority of Georgia (MEAG Power), previously secured, bringing the total to $12 billion.

The promise of such a substantial federal carrot to buoy the flailing project was enough to appease the project’s partners and the Georgia Public Service Commission, which voted to continue — even after the bankruptcy of the new AP1000 reactor designer and builder Westinghouse, and cancellation of a twin nuclear expansion project in South Carolina that has left a mess in its wake.

Absent during Secretary Perry’s comments was any mention that the Department of Energy consistently kept the public in the dark, giving no explanation — yet again — to the tax paying public before the guarantees were issued as to whether the many remaining project risks were considered.

Also absent: The fact that the new Vogtle reactors’ original $14 billion price tag has doubled to a whopping $28 billion.

And that’s just the beginning.

Secretary Perry also failed to acknowledge that Vogtle’s construction is woefully behind schedule. Completion dates have been pushed back from April 2017 to November 2022, and there’s uncertainty whether even that schedule can be maintained. After all, it took over nine years for the project to reach just 50 percent direct construction completion. The longer it takes, the more it all costs.

There was no mention that Georgia Power ratepayers have already paid over $2.5 billion with nothing to show for it because of anti-consumer state legislation passed a decade ago that allows utility customers to be charged in advance for the nuclear project’s financing costs — including profit for the Company.

There was nary a mention of costly design problems, even though last month it was reported that the Toshiba-Westinghouse AP1000 Sanmen-2 reactor in China, the same design in the Vogtle expansion, had a reactor coolant pump failure after only a few months of operation, which could prove to be a critical (and expensive) problem in Georgia, too.

No one mentioned that one of the largest purchasers of the future Vogtle electricity, JEA in north Florida, wants out of the deal it struck with MEAG Power and has gone to great lengths, both legally and politically, to extricate itself from the Vogtle boondoggle. From billboards in Atlanta to full-page ads in Georgia newspapers, JEA boldly stated that “a decision to continue cannot be justified on any rational basis.”

Given how many fiscal conservatives champion this project, the most hypocritical omission may be the failure to mention that U.S. taxpayers are on the hook for $12 billion in federal loans even if the project collapses and utility partners default.

More alarming, the Vogtle partners have little to lose. They were apparently assessed a $0 credit subsidy fee. A credit subsidy fee is like a down payment on a house or a car. They paid nothing down — and they can therefore walk away without leaving money on the table.

Despite years of delays and cost overruns, bankruptcies and bailouts, technical problems and decreased energy demands, the vast majority of U.S. taxpayers still have no idea about the particulars of this project, and the risks facing them. Federal agencies and the parties involved have shielded this information from the public, making decisions behind closed doors.

We tried to change this by joining a coalition of taxpayer and consumer watchdog organizations that filed a detailed letter with members of Congress and Secretary Perry highlighting the increasing the risk of default to U.S. taxpayers after an unexpected $2.3 billion project cost increase occurred last August that led to infighting amongst the partners. We encouraged Secretary Perry to withdraw consideration of the loan guarantees, and if the Department of Energy were to proceed, requested that significantly higher credit subsidy fees be assessed. We never received a response and based on last month’s announcement our warnings have been ignored, again.

We don’t believe corporations should be bailed out for fiscal irresponsibility or rewarded with billions in corporate welfare for bad decisions, yet that is exactly what happened when the Secretary went down to Georgia.

Since the federal government shirked responsibility to protect taxpayers, state decision makers must stop being cheerleaders for the Vogtle project and instead transform into its most staunch scrutinizers. Taxpayers and utility customers deserve more transparency and accountability than ever before, not less, given the many billions of their dollars that remain on the line with no end in sight.


Debbie Dooley is one of the national co-founders of the American tea party movement and has been a conservative activist since 1976. Dooley formed “Conservatives for Energy Freedom” as a vehicle to fight for free market principles and individual liberty in energy as serves as the organization’s president.

Sara Barczak has worked for nearly 20 years with the Southern Alliance for Clean Energy, a regional non-partisan advocacy organization based in the southeastern U.S. that focuses on advancing stronger state, local and utility clean energy policies.

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