http://www.cleanenergy.org/2014/01/16/taxpayers-kept-in-the-dark-as-deadline-looms-to-finalize-8-3-billion-nuclear-loan-guarantees-for-vogtle-reactors/

SACE | Southern Alliance for Clean Energy

Taxpayers Kept in the Dark as Deadline Looms to Finalize $8.3 Billion Nuclear Loan Guarantees for Vogtle Reactors

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Recently released documents fail to disclose details of risky deal with Southern Company and partners for new reactors in Georgia

 

Atlanta, Ga. (January 16, 2014) — Taxpayer-backed federal loan guarantees of over $8 billion that were offered nearly four years ago by the Obama Administration to utility giant Southern Company and its partners pursuing new nuclear reactors in Georgia remain shrouded in secrecy. Despite the deadline to finalize the deals by the end of this month, the Department of Energy (DOE) and Office of Management and Budget (OMB) continue to withhold key information as revealed in recently released documents by DOE to the Southern Alliance for Clean Energy (SACE). Over the past several years, the organization has filed numerous Freedom of Information Act (FOIA) requests to unearth important details on the risks posed to U.S. taxpayers if the more-than $15 billion nuclear project should default. Today, SACE filed an Administrative Appeal with the DOE given its recent, unacceptable response.

 

SACE’s most-recent FOIA request filed in September 2013 to the DOE was finally addressed on December 18, 2013 and the two documents that were released are almost entirely redacted, providing little useful information. A similar FOIA request simultaneously filed with the OMB remains entirely unanswered even though the statutory deadline for response has long since lapsed. These FOIA requests were filed just prior to the government shutdown over budget concerns, and just days before the DOE extended the deadline to finalize the loan guarantees to the end of 2013. Late last month, the DOE extended the deadline for the sixth time, to the end of January 2014. The loan guarantee offer was originally made in February 2010 and the initial acceptance deadline was in May 2012.

 

“It is extremely unfortunate that the Department of Energy continues to move forward with this troubled loan guarantee program without providing the full details and terms of the guarantees in a timely manner. This is corporate welfare for one of the largest power companies in the country and a bad deal for U.S. taxpayers,” said Sara Barczak, high risk energy choices program director with the Southern Alliance for Clean Energy. “With only days left before this will supposedly be finalized, we encourage the utilities involved to walk away – which would reduce the risk to taxpayers.”

 

SACE’s recent FOIA requests focused on the credit subsidy fee, which represents the “price tag” a utility must pay to the federal government for the loan guarantee, and is calculated based on the borrower’s risk of default. In previously released documents that SACE acquired due to successful FOIA litigation, the fee ranges appeared to be too low to protect taxpayers. In the latest two documents received from DOE, any mention of the credit subsidy fee and related costs is wholly redacted. Additionally, despite continuing changes to the loan terms, the significant delays and cost overruns facing the Vogtle project and a $900 million lawsuit between the utility and the lead contractor, Westinghouse, there is no indication that DOE has adjusted the credit subsidy fees to reflect these new realities. The deteriorating power market over the past few years and the ongoing Fukushima nuclear accident in Japan that is impacting the nuclear industry worldwide are also factors that were not present when the loan guarantee was first offered.

 

“It is difficult to understand why DOE continuously refuses to be transparent in its decision making. Despite repeated requests from SACE, the agency won’t disclose to the public the full terms and conditions of the deal,” said Mindy Goldstein, Director of the Turner Environmental Law Clinic at Emory University’s School of Law, who filed today’s Administrative Appeal on behalf of SACE and has successfully represented the organization in previous FOIA litigation. “Taxpayers are essentially being forced to underwrite an $8.3 billion deal whose terms they cannot assess before their money is committed.”

 

There has been significant public interest in and opposition to the controversial loan guarantee program. In May 2011, over 180 organizations and businesses urged Congressional appropriators to end the nuclear loan guarantee program. In 2012, over 17,000 petitions were sent to then-Energy Secretary Steven Chu opposing the Vogtle loan. Last November, Nuclear Information and Resource Service (NIRS) attempted to hand deliver nearly 23,000 petitions to DOE, but were informed the agency’s security process for mail and deliveries would not permit receipt.

 

“American taxpayers don’t want billions of their dollars spent on the unnecessary and wasteful Vogtle nuclear project,” said Tim Judson, Acting Executive Director of NIRS. “Already, nearly 40,000 people have signed petitions to the Department of Energy calling for cancellation of the $8.3 billion loan, with no response. We know the agency is rightly concerned about the high probability that Southern Company will default on the taxpayers, but further waiting is not going to change that. DOE should simply cancel the loan now.”

 

For additional background, please view a report analyzing some of the loan guarantee documents SACE received from previous FOIA litigation here and the supplemental memo. The group has made thousands of pages of documents received publicly available through an online library, which includes the recent FOIA requests to DOE and OMB that were essentially ignored by the agencies. For a summary of the Vogtle loan guarantee, view this factsheet from Taxpayers for Common Sense and summary of risks with the loan guarantee program.

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Founded in 1985, the Southern Alliance for Clean Energy is a nonprofit organization that promotes responsible energy choices that create global warming solutions and ensure clean, safe, and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org