Vogtle nuclear plant loan guarantees may not be finalized: NEI

[FBaggins]

Georgia Power and its partners may not be able to reach terms with the US Department of Energy on $8.3 billion in loan guarantees to finance the Vogtle nuclear plant expansion, Alex Flint, senior vice president of governmental affairs for the Nuclear Energy Institute, said Thursday.

The conditional guarantees for the two-unit, 2,200-MW Vogtle plant expansion were announced by DOE in 2010 and were said to be a sign of the administration's support for nuclear energy. One of the conditions was that the project sponsors receive a combined construction permit-operating license from the US Nuclear Regulatory Commission, which issued the license February 10. Southern Co., Georgia Power's parent company, expects to finalize the loan guarantees in the second quarter of the year, spokesman Steve Higginbottom said Thursday.

...snip...

Flint did not provide details on why the loan guarantees might not be finalized, but said implementation of the program's regulations has been "painful." The White House Office of Management and Budget, which helps set certain fees for the loan guarantees, "was not an enthusiastic supporter of the loan guarantee program," Flint said. The way in which regulations were issued "were not conducive to a successful program," he said.

The DOE rules and regulations were not designed for the type of ownership structure used in the Vogtle project, Higgins said during a conference call to discuss financial results.



http://www.platts.com/RSSFeedDetailedNews/RSSFeed/ElectricPower/8123712

[kristopher]

1. Perhaps this is the potential deal killer

The Platts story is dated 3/29 and this one is from 3/28.

FOR IMMEDIATE RELEASE

03/28/2012

Contact
Jennifer Rennicks, Director of Policy & Communications, 865-235-1448, [e-mail]

Court Rules in Favor of SACE Loan Guarantee Suit

Though this ruling is long overdue given that we filed our original Freedom of Information Act request with the Department of Energy over two years ago, we are extremely pleased that the Court essentially ruled in our favor: that the agency has not been able to justify why they have withheld significant amounts of information from the public for an $8.3 billion taxpayer-financed nuclear loan guarantee for Southern Company’s ill-advised pursuit of building two additional nuclear reactors at Plant Vogtle. We are particularly pleased that the Court definitively ordered the Department of Energy to release the credit subsidy fee estimates, which essentially represents what “skin” the utilities have had to place into the “game.”

Unfortunately the Court is giving the agency another chance to justify why equally important information should continue to be withheld from the public. The Department of Energy will have sixty (60) more days to explain why certain terms and conditions of the loan guarantees should not be released. As the Court noted, if the agency chooses to withhold the information, the agency must then show that Southern Company actually provided its own loan guarantee terms. We find it alarming that a utility gets to call the shots with billions of dollars of taxpayer money potentially on the line.

We believe it is imperative that until all the terms of the loan guarantee are made transparent, the Department of Energy must not finalize the loan guarantee with Southern Company and its partners in the Vogtle project. Further, we implore Southern Company to step away from this deal, which will do nothing but put U.S. taxpayers at risk should the project default.

Again, we are glad the Court agrees with our challenge that the Department of Energy has not made a compelling case but are disappointed that the agency, which has mismanaged the loan guarantee program as cited in many reports by various government agencies, has been given an undeserved, second chance. Instead, the information we requested should be made immediately available to the public.

They have been vigorously fighting release of this information for quite some time. I doubt these two stories are unrelated.

[FBaggins]

3. Unlikely.

If that were the case don't you think that both the Vogtle and Summer plants would be having the same trouble?

The speculcation in the article is that it has something to do with the ownership structure for Vogtle not alligning well with the designs of the program.

That's ironic, since the the ownership structure makes it less likely that the loan will default.

[kristopher]

4. It's not unlikely at all

I don't doubt it "has something to do with the ownership structure for Vogtle not alligning well with the designs of the program" but that doesn't rule out the proposed solution being something that will not withstand public scrutiny.

[FBaggins]

5. Then why doesn't the reporting include problems for the Summer plant?

A different outcome between the two implies that whatever is causing the problem is also different.

On edit - But perhaps we'll know more soon enough -

U.S. Department of Energy must release Plant Vogtle loan guarantee credit subsidy data

An environmental group’s two-year quest for details about the U.S. Department of Energy’s $8.3 billion federal loan guarantee for Southern Nuclear’s Plant Vogtle expansion must be partially honored, according to a U.S. District Court judge.

http://chronicle.augusta.com/news/government/2012-03-29/us-department-energy-must-release-plant-vogtle-loan-guarantee-credit?mmo_ccc=xfinity

[kristopher]

6. Court Rules in Favor of SACE Loan Guarantee Suit

I take it you couldn't be bothered to actually read the press release in post #1 by the plaintiff in the lawsuit you seem to have just discovered. It is absolutely amazing how you could nonetheless argue about it being unrelated....

[kristopher]

2. Markey: Don't Act on Vogtle Nuclear Loan Guarantee

From Markey's Congressional website:

Markey: Don't Act on Vogtle Nuclear Loan Guarantee Until Allison Report Recommendations Implemented, Taxpayers Protected
$8.3 billion in taxpayer dollars at risk if DOE fast-tracks approval for Southern Company loan guarantee for nuclear project beset by financial risk, serious safety concerns
Feb. 13, 2012 --

WASHINGTON, D.C. – Last week’s decision by the Nuclear Regulatory Commission to approve the licenses for the Vogtle Nuclear Power Plant means the Department of Energy (DOE) could at any time approve a loan guarantee of $8.3 billion for a project surrounded by serious safety concerns and to a company beset by financial woes related to the project. Today, Congressman Edward J. Markey (D-Mass), top Democrat on the Natural Resources Committee and senior member of the Energy and Commerce Committee, urged DOESecretary Steven Chu to implement of all recommendations made in the just-released White House-ordered review of the Energy Department’s loan guarantee program prior to awarding any further loan guarantees, either on a conditional or final basis. The proposed nuclear loan guarantee to the Southern Company is one of the largest of any previous loan guarantee under the DOE program and is more than 15 times larger than the loan guarantee granted toSolyndra. In the past 18 months, Southern Company's credit rating has been downgraded as a result of its pursuit of the Vogtle project.

“The Republican push for a loan guarantee for a nuclear reactor project exponentially riskier than Solyndra proves that their interests are not in financial stewardship but in political game playing,” said Rep. Markey. “Given the massive taxpayer debt to be assumed and the extraordinary risk associated with the Vogtle project, we should not act on final approval of the Southern Company loan guarantee unless all of the improvements recommended in the Allison report have been put in place to reduce the likelihood of a multi-billion dollar taxpayer bailout.”

A copy of Markey’s letter to the Department of Energy can be found below.

The Allison report found absolutely no evidence of illegality on the part of the Department of Energy or the White House and no evidence of politicization of the loan guarantee process, contrary to Republican accusations and political sanctimony. However, the report did find some shortcomings within the loan guarantee program and suggested specific measures to address them in order to mitigate financial risk to taxpayers.

Key recommendations from the report include:
DOE should assign authorities for decision-making only to individual managers and never to committees where collective responsibility can obscure individual accountability.
DOE should develop explicit objectives and standards of performance for managing the Portfolio during the construction phase of the projects and beyond.
DOE should create a new Risk Management department encompassing all DOE functions that monitor LPO and should appoint a highly experienced Chief Risk Officer to head it. DOE should also reorganize oversight of the Program.
Overall governance of the Programs would benefit from access to senior government officials of other departments and agencies who have knowledge of proven ‘best practices’ across credit programs government-wide.

“This report represents a strong dose of reality for Congressional Republicans who have chosen to use the failure of one loan guarantee recipient—Solyndra—as a rationale for abandoning all support for clean energy and as the basis for waging politically-motivated investigations into the company over the past year,” writes Rep. Markey in the letter to Secretary Chu.

In September, Rep. Markey called on Chairmen Fred Upton and Cliff Stearns to hold hearings on the implementation of the nuclear power plant loan guarantee program, the issuance of the conditional nuclear loan guarantee that has been awarded, and the role the nuclear industry has had in altering the terms associated with subordination.

http://markey.house.gov/press-release/markey-dont-approve-vogtle-nuclear-loan-guarantee-until-allison-report-recommendations

Download letter to Sec. Chu
http://markey.house.gov/sites/markey.house.gov/files/Chu%20Vogtle%20letter%2002.13.12.pdf