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Loan guarantee for Vogtle new nuclear plant – a dangerous waste of tax-payers’ money?

groups that oppose the construction of the Vogtle reactors are arguing that the proposed loan guarantee for the project is “Solyndra-like,” a reference to the scandal over a solar panel manufacturer in California that went bankrupt in 2011 after receiving a $535 million federal guarantee.

the Vogtle project is more than a year behind schedule, they noted. And the owners and the contractor are enmeshed in a $900 million dispute on costs

Nuclear Opponents Invoke Solyndra NYT, By MATTHEW L. WALD, 31 Jan 13,  Are new nuclear power plants a good bet for taxpayers? Congress evidently thought so in 2005, when it set aside $17.5 billion in loan guarantees to help restart nuclear construction in this country after a three-decade drought.

The theory at the time was that nuclear power was essential to maintaining diversity in the nation’s electric power system and to cutting carbon dioxide emissions by reducing reliance on fossil fuels. The program was signed into law by President George W. Bush, and President Obama later proposed expanding that program to more than $50 billion.

Eight years later, no actual loans have been made, and opponents of one nuclear project in Georgia are now arguing that none should be, because the risk of default is too high.

The loan guarantee program has in fact already been blamed for the demise of one project as a result of disagreement over the risk of default. Calvert Cliffs 3, a proposed new reactor in Maryland, was canceled in 2010 because, the builders said, the Energy Department was asking for an upfront payment that was so large that it made the reactor uneconomic………

While no nuclear loan guarantees have been granted, one has nonetheless been promised to the companies now building the Vogtle 3 and 4 reactors, near Augusta, Ga. It is not clear whether those builders, led by the Southern Company, will actually accept a federal guarantee; Southern says it has been shopping in the private market.

Nonetheless, two groups that oppose the construction of the Vogtle reactors are arguing that the proposed loan guarantee for the project is “Solyndra-like,” a reference to the scandal over a solar panel manufacturer in California that went bankrupt in 2011 after receiving a $535 million federal guarantee. On Wednesday, the opponents, Synapse Energy Economics and Earth Track,released a report based on the Department of Energy’s responses to four Freedom of Information Act requests over three years. The report argues that Vogtle might not go forward without the loan guarantees and that the department is poorly set up to evaluate the risk of default and set an appropriate upfront fee.

Furthermore, they argue, with new setbacks for nuclear power, including the persistence of very low prices for natural gas and the accident at Japan’s Fukushima Daiichi plant, the loan package should be revised. By some measures, the Vogtle project is more than a year behind schedule, they noted. And the owners and the contractor are enmeshed in a $900 million dispute on costs……

The Department of Energy has extended the deadline for Southern and its partners to decide on the loan guarantee offer until this June……http://green.blogs.nytimes.com/2013/01/31/nuclear-opponents-invoke-solyndra/

February 1, 2013 - Posted by Christina Macpherson | politics, USA