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USA nuclear loan guarantee the last gift to a dying industry?

Loan Program for Reactors Is Fizzling, NYT, By MATTHEW L. WALDFEB. 18, 2014 WASHINGTON Moniz,-Ernest— Energy Secretary Ernest Moniz is set to announce on Wednesday that he will finish a $6.5 billion loan guarantee this week and another soon for $1.8 billion to help three Georgia electric companies build the first new nuclear reactors in the United States in three decades.
But the announcements are coming far later than anticipated and may effectively end a program that Congress established in 2005 to jump-start a new generation of nuclear plants. At one point, the program was expected to support more than $50 billion in loans for nuclear projects.

The guarantees are to go to Georgia Power, a subsidiary of the Southern Company, which owns 45.7 percent ofthe Vogtle nuclear project, near Augusta, and theOglethorpe Power Corporation, a nonprofit consortium of smaller companies, which owns 30 percent. A third company, MEAG, a consortium of municipals, which owns 22.7 percent, will get a guarantee of $1.8 billion soon, according to government officials.

Little in the nuclear loan guarantees program has gone as planned. Congress authorized $17.5 billion in lending authority in 2005, on the theory that a nuclear renaissance was about to begin but that it would require credit help from Washington. In 2011, the administration, with bipartisan support, called for adding $36 billion.

But the construction boom never happened. The Energy Department offered a $2 billion guarantee toAreva, a European nuclear company, to build an enrichment plant in Eagle Rock, Idaho, but Areva later dropped the construction plans. Another company, USEC, is seeking a $2 billion loan guarantee for the same purpose, to commercialize a new enrichment technology it is demonstrating in Piketon, Ohio, but it is having a hard time convincing the department that it is a good investment……..

Antinuclear groups have predicted that Vogtle would never be finished or be profitable and that the government would never recover its investment. But Southern has a strong balance sheet and captive customers, whom the Georgia Public Service Commission can force to pay for the investment.
The Vogtle loan guarantees may be the only ones under the program. ……

February 21, 2014 - Posted by | Uncategorized

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