Vogtle nuclear loan guarantee drags into fifth round of delays
WASHINGTON, D.C. – According to a report by Platts today, the deadline to finalize the Department of Energy loan guarantee to the Plant Vogtle Nuclear Generating Station has been extended from December 31, 2013 to January 31, 2014. This new one-month extension marks the fourth year in a row that the Department of Energy has been unable to finalize an $8.3 billion loan guarantee to build two new reactors at the nuclear generating station near Waynesboro, Ga. Throughout the planning and construction process, the $14 billion Vogtle project has faced myriad design changes and quality assurance problems. While Southern Company insists that they do not need the federal loan guarantee to complete construction, they continue to pursue it.
Despite reports that Oglethorpe Power, one of the partners* in the new reactor project, has agreed to terms on its loan guarantee with the Department of Energy, Georgia Power, the largest of the Vogtle partners, has yet to reach agreement with the federal government on the terms of its loan guarantee. The specific terms of the loan guarantees are shrouded in secrecy. However, Freedom of Information Act requests and litigation revealed that the credit subsidy fee offered to Southern Company ranged from 0.8 to 1.5 percent. The credit subsidy fee is supposed to insulate against default, but the fee offered to Southern Company is woefully inadequate to cover the risks involved in major nuclear construction. According to the Nuclear Regulatory Commission, 32 percent of reactor construction is cancelled before any electricity is produced.
Cost overruns and schedule delays have plagued the Vogtle reactors from day one, drawing criticism from independent monitors, sparking lawsuits among contractors and driving credit downgrades for the Vogtle partners. Quality assurance problems persist with Chicago Bridge and Iron Company’s construction of the modular components for the new AP1000 design being used at Vogtle. Friends of the Earth has been closely monitoring problems with Vogtle construction and anticipates more problems will come to light as piping and wiring begin to be installed in the new reactors and ancillary buildings.
Friends of the Earth’s nuclear subsidies campaigner Katherine Fuchs commented on the missed loan guarantee deadline saying, “The Department of Energy has offered Georgia Power, a subsidiary of the energy giant Southern Company, a sweetheart deal, and it’s still not enough. Georgia Power has stated that it doesn’t need the loan guarantee to continue expansion of the Vogtle reactors, so the government should walk away from this boondoggle and let the private market determine the future of this risky reactor project.”
*Georgia Power (Southern Company subsidiary) 45.7 percent of Vogtle units #3 & #4, Oglethrope Power Coporation 30 percent, Municipal Electric Authority of Georgia (22.7 percent), City of Dalton, Ga. 1.6 percent.
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Aerial image of Plant Vogtle Nuclear Generating Station – photo credit to High Flyer.