Organizations oppose taxpayer-backed federal nuclear loan guarantees totaling $12 billion given serious risks that remain for project’s completion
Atlanta, Ga. – Despite numerous serious hurdles remaining for Southern Company’s Plant Vogtle in Georgia, the only new nuclear power construction project left in the United States, and over the repeated objections of taxpayer and consumer watchdog organizations, Secretary of Energy Rick Perry is expected to visit Plant Vogtle tomorrow and announce the finalization of an additional $3.7 billion in taxpayer-backed federal loan guarantees for this troubled project. In an effort to buoy the flailing project after the bankruptcy of AP1000 reactor designer and builder Westinghouse, the Department of Energy (DOE) announced conditional approval in September 2017 to three of the Vogtle project partners: $1.67 billion to Southern Co.’s Georgia Power, $1.6 billion to Oglethorpe Power Corp., and $415 million to the Municipal Electric Authority of Georgia (MEAG). These loan guarantees are on top of the $8.3 billion in loan guarantees that the utility project partners previously secured.
“Tomorrow’s expected fanfare at Plant Vogtle is more than disappointing as it flies in the face of the values of true Conservatives who don’t believe in bailing out corporations for bad decisions,” said Debbie Dooley, President of the Atlanta Tea Party and Conservatives for Energy Freedom. “Vogtle’s completion is facing a host of problems – design issues, JEA wanting completely out of the Vogtle deal they struck with MEAG, and ongoing labor issues. A huge mistake is being made by approving these loan guarantees.”
The Vogtle expansion’s original project costs, initially estimated at $14 billion, have ballooned and are now more than doubled, as has the construction schedule that estimated both reactors would be complete by April 2017. Latest completion estimates are now November 2022, but the confidence in maintaining that schedule is uncertain. Last month, the Georgia Public Service Commission punted the semi-annual review proceeding to later this year. Just last week it was reported that the Toshiba-Westinghouse AP1000 Sanmen-2 reactor in China, the same design being used in the Vogtle expansion, had a reactor coolant pump failure after only a few months of operation, which could prove to be a critical problem.
“Rewarding failure by doling out billions more dollars in corporate welfare at taxpayers’ expense for the Vogtle nuclear project in Georgia is not only unfair but it is idiotic given all of the red warning flags,” said Sara Barczak, regional advocacy director with the Southern Alliance for Clean Energy (SACE). “It’s ridiculous that DOE provided sweetheart deals to the utilities involved, including no credit subsidy fee required for more than $12 billion in loan guarantees, for a project that has only become more risky and less economic since it was first proposed. We are appalled at the lack of transparency in this process despite all of our efforts to get more information as to the risks facing taxpayers and especially utility ratepayers who have already paid billions for nothing.”
After an unexpected $2.3 billion project cost increase occurred in August 2018, a coalition of taxpayer and consumer watchdog organizations representing both conservative and progressive members requested that the U.S. House and Senate Budget Committees investigate the troubled Vogtle nuclear expansion project in Georgia and the risks to U.S. taxpayers before the DOE finalized the additional $3.7 billion in loan guarantees. The groups filed a detailed letter as well with Secretary Perry highlighting that construction was only 50 percent complete nine years into the project, and the actual completion of Vogtle was increasingly uncertain – all increasing the risk of default to U.S. taxpayers. Coalition members encouraged Secretary Perry to withdraw consideration of the loan guarantees, and if DOE were to proceed, requested that significantly higher credit subsidy fees be assessed. The groups never received a response from the DOE.
“Tomorrow’s announced bailout will not save Vogtle from the demise of over fifty previous nuclear reactors as it continues to show every sign of failure and, ultimately, of being canceled. It continues to be a slow-moving train wreck,” said Tim Judson, executive director of the Nuclear Information & Resource Service (NIRS). “Wall Street has downgraded all of the utilities involved in this project and Vogtle’s largest customer, JEA, has said that ‘a decision to continue cannot be justified on any rational basis.’ Despite all this, DOE just flushed another $3.7 billion down the drain.”
“Plant Vogtle has become a money pit because of lack of accountability by the corporations involved, state and federal regulators, and elected officials,” said John Hitchins with Georgians for Energy Freedom. “Georgia ratepayers and federal taxpayers deserve to be protected, but that hasn’t happened. Instead, Plant Vogtle has become the definition of fiscal irresponsibility.”
Since the original $8.3 billion in loan guarantees were offered in 2010, the Southern Alliance for Clean Energy (SACE) filed extensive Freedom of Information Act (FOIA) requests and went to court twice to force DOE to unearth important details on the risks posed to U.S. taxpayers if the Plant Vogtle nuclear project should default — a reality that plays a large role in the nuclear industry’s history. A report analyzing some of the loan guarantee documents SACE received from previous FOIA litigation is found here along with the supplemental memo. Unlike DOE and the Office of Management and Budget (OMB), the Southern Alliance for Clean Energy has made thousands of pages of documents received publicly available through an online library found here.
Since 1985, the Southern Alliance for Clean Energy has worked to promote responsible energy choices to ensure clean, safe and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org.