http://www.cleanenergy.org/2014/01/28/groups-call-for-withdrawal-of-8-3-billion-tax-funded-loan-guarantees-to-southern-company-meag-power-for-vogtle-reactors/

SACE | Southern Alliance for Clean Energy

GROUPS CALL FOR WITHDRAWAL OF $8.3 BILLION TAX-FUNDED LOAN GUARANTEES TO SOUTHERN COMPANY, MEAG POWER FOR VOGTLE REACTORS

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Contact: Glenn Carroll, Coordinator, Nuclear Watch South, 404-378-4263, cell 404-432-8727

 

1/28/14 ATLANTA: Several citizen groups submitted a letter to U.S. Department of Energy (DOE) Secretary Ernest Moniz today flagging new, and chronic, problems which show that two reactors already under construction at Georgia Power’s Vogtle nuclear plant are a risky investment for U.S. taxpayers.

 

The letter to Moniz, which is also being sent to the White House Office of Management and Budget, states: “We request that federal loan guarantees for construction of Plant Vogtle reactors 3 and 4 be denied and that further negotiations with Southern Company and its subsidiaries and partners cease. In four years of negotiation no agreement has been reached on the $8.3 billion in tax-funded loan guarantees for Vogtle. Indeed, even as DOE has extended the deadline for a sixth time to January 31, 2014, Vogtle partner Municipal Electrical Association of Georgia (MEAG) is undergoing last-minute corporate structural changes, license amendment requests from the Nuclear Regulatory Commission, and contracting to sell power from Vogtle in Florida and Alabama.”

 

Congress included tax-funded loan guarantees in its 2005 Energy Policy Act to jumpstart a “nuclear renaissance,” subsequently appropriating $18 billion for new nuclear construction. In 2010, with the issuance of a license by the U.S. Nuclear Regulatory Commission (NRC), $8.3 billion was promised to a Georgia consortium for two additional reactors at Vogtle near Augusta on the Savannah River. The short-lived nuclear heyday has shriveled to only four reactor construction starts, two at Vogtle in Georgia and two in South Carolina. Vogtle partners are Southern Company/Georgia Power (45.7%), MEAG Power (22.7%), Oglethorpe Power (30%) and City of Dalton (1.6%).

 

The latest concern about Vogtle came to light last week when a request from Municipal Electric Association of Georgia (MEAG Power) to amend the Vogtle nuclear license was published in the Federal Register Notice. In the document, MEAG seeks a nuclear license transfer to several “shell corporations” it has set up, in part to broker a percentage of the projected power from its share of Vogtle 3 and 4 to electricity suppliers in Florida and Alabama. This is a startling admission that energy from Vogtle, being underwritten largely by Georgia electricity customers’ power bills, could be sold in other states.

 

“The contracts which MEAG has with Jacksonville (Florida) Electric Authority and Power South in Alabama prove that Vogtle is not needed by Georgians who are already paying a 7% tax on their power bills and watching their rates skyrocket for Vogtle construction,” says Glenn Carroll, coordinator of Nuclear Watch South, an environmental organization based in Atlanta. “Loan guarantees are an unfortunate raid on U.S. taxpayers’ hard-earned dollars for a project that is too risky to get traditional financing.”

 

Since major Vogtle construction started two years ago the project has already fallen two years behind schedule and is $1.6 billion over budget. Vogtle partners are embroiled in a $900 million lawsuit with construction contractors and the reactors’ designers. Recent economic analysis of Georgia Power’s annual report data filed with the SEC from 2002-2012 shows that 4.1% annual growth forecasts have failed to materialize and retail and wholesale electricity sales are flat for the 10-year period. The annual reports also reveal that Georgia Power is overbuilt by 46% — more than twice the national standard.

 

Southern Alliance for Clean Energy (SACE), one of the groups signing the letter, has filed numerous Freedom of Information requests with DOE and at one point learned that the Vogtle partners had been offered a low “credit subsidy” fee of 0.5 to 1.5 percent. Southern Company, parent company of Georgia Power, has balked at agreeing to the small credit subsidy which, as the letter states “would be insufficient to cover the risks the tax-paying citizens of the United States are being asked to take.” Georgia Power has repeatedly said it does not need the loan guarantees to complete Vogtle and the letter points out it is therefore “unnecessary to commit the taxpayer to a project with a troubled past and continued inherent risks.”

 

The groups describe several ways that the climate for nuclear energy has changed since the decision was taken to pursue nuclear. The market for suppliers of nuclear parts is much smaller than anticipated so economies of scale are giving way to ballooning costs. Renewable energy sources such as solar and wind energy have far exceeded expectations, recently enjoying 200% annual growth and rapidly falling prices which are below nuclear costs.

 

“Georgia Power could walk away from the tax-backed loan and cancel Vogtle,” says Ms. Carroll. “It has absolutely nothing to lose since ratepayers have covered its investment so far. If it wants to risk going forward with building an expensive power plant it doesn’t need, it should invest in itself in the grand old business tradition,” she concludes.

 

The Vogtle reactors are being funded in part by a controversial accounting mechanism called Construction Work In Progress (CWIP) by which Georgia Power is collecting money from its residential and small business customers in advance. CWIP was legalized by the Georgia General Assembly’s 2009 “Nuclear Energy Financing Act” and enacted by the Georgia Public Service Commission (PSC) in 2010. So far, Georgia Power has collected almost $1.5 billion through CWIP. The other partners are not regulated by the PSC and may pass their costs directly to their customers.

 

The 13 groups signing the letter to Secretary Moniz are:

~ Alliance for Nuclear Accountability

~ Blue Ridge Environmental Defense League

~ Center for a Sustainable Coast

~ Coastal Group of the Georgia Chapter of the Sierra Club

~ Friends of the Earth

~ Georgia Women’s Action for New Directions

~ Nuclear Energy Information Service

~ Nuclear Information & Resource Service

~ Nuclear Watch South

~ Public Citizen

~ San Luis Obispo Mothers for Peace

~ Southern Alliance for Clean Energy

~ Sun Day Campaign

 

A copy of the letter to Energy Secretary Moniz and supporting documents are posted at http://www.nuclearwatchsouth.org

 

RESOURCE LINKS:

Group Letter to Secretary of Energy Moniz

http://www.nuclearwatchsouth.org/pdfs/Secretary%20of%20Energy.pdf

 

Georgia Power Key Financial & Operating Data 2002-2012

http://www.nuclearwatchsouth.org/pdfs/Final_GPC%20Key%20Fin%20Stats.pdf

 

Vogtle Budget / Break Even Analysis

http://www.nuclearwatchsouth.org/pdfs/GPC%20Vogtle%20Budget,%20BE,%20BS(2).pdf

 

MEAG License Transfer Request to NRC, 12/2/13

http://www.nuclearwatchsouth.org/pdfs/MEAG_NRC_License_Transfer_Application_FINAL_in_ADAMS_12_11_2013.pdf

 

Southern Alliance for Clean Energy Vogtle Loan Guarantee FOIA Information:

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

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