The Department of Energy wants to give the Southern Company a nuclear power loan guarantee at better interest rates than you can get on a student loan. And unlike a home mortgage, there may be no down payment.
Why?
The terms DOE is offering the builders of the Vogtle atomic reactors have only become partially public through a Freedom of Information Act lawsuit filed by the Southern Alliance for Clean Energy.
We still may not know all the details.
SACE has challenged the $8.3 billion loan guarantee package announced by President Obama in 2010.
The documents show the DOE has intended to charge the Southern a credit subsidy fee of 0.5 percent to 1.5 percent, far below the rates you would be required to pay for buying a house or financing an education.
On a package 15 times bigger than what the federal government gave the failed solar company Solyndra, Southern would be required to pay somewhere between $17 million and $52 million. Advocates argue the fee is so low that it fails to adequately take into account the financial risks of the project. Numerous financial experts have estimated the likely fail rate for new nuclear construction to be at 50 percent or greater.
Furthermore, since a primary lender would be the Federal Financing Bank, the taxpayer is directly on the hook. Guaranteed borrowings are not supposed to exceed 70 percent of the project's projected costs, but it's unclear what those costs will actually turn out to be, as the public has been given no firm price tag on the project.
There is apparently no cash down payment being required of Southern as it seems the loan is designed to be secured with the value of the reactors themselves, whatever that turns out to be. In the unlikely event they are finished, liability from any catastrophe will revert to the public once a small private fund is exhausted.
Southern wanted the terms of the DOE offer kept secret, and we still don't know everything about it. But in March, a federal circuit court judge ordered that the public had a right to know at least some of the details.
Apparently no final documents have actually been signed between Southern and the DOE. The Office of Management has reportedly balked at offering the nuke builder such generous terms. Southern has reportedly balked at paying even a tiny credit fee.
Construction at the Vogtle site has already brought on delays focussed on the use of sub-standard concrete and rebar steel. The projected price tag -- whatever it may be -- has risen as much as $900 million in less than a year.
Southern and its Vogtle partners are in dispute with Westinghouse and the Shaw Company, two of the reactors' primary contractors. Georgia ratepayers have already been stuck with $1.4 billion in advance payments being charged to their electric bills. Far more overruns are on their way.
The Vogtle project is running somewhat parallel with two reactors being built at V.C. Summer in South Carolina, where $1.4 billion was already spent by the end of 2011. Delays are mounting and cost overruns are also apparently in the hundreds of millions.
Southern and Summer's builders both claim they can finance these projects without federal guarantees. But exactly how they would do that remains unclear.
Two older reactors now licensed at the Vogtle site were originally promised to cost $150 million each, but came in at $8.9 billion for the pair. The project's environmental permits are being challenged in court over claims the Nuclear Regulatory Commission failed to account for safety lessons from the Fukushima disaster.
The terms of the guarantees are now apparently being scrutinized by the Office of Management & Budget, which reports to a White House that may be gun-shy over new construction guarantees due to bad publicity from the Solyndra fiasco.
Numerous petitions are circulating in opposition to this package.
The Nuclear Information & Resource Service has already facilitated more than 10,500 emails sent directly to DOE Secretary Chu.
You might ask: Why should the builders of nuclear power reactors get better terms than students struggling to pay for college or working families trying to buy a home?
At least the home buyers can get private liability insurance, which the nuke builders can't.
If mounting grassroots opposition can stop this package, it's possible no new reactors will ever be built in the U.S.
So send the OMB and DOE a copy of your mortgage or student loan statement.
Demand that before they finance any more nukes, they drop your own payment to 1 percent, just like they're offering the reactor pushers. Also demand the right to buy a home without a down payment.
See how far you get, and then make sure Vogtle goes no farther.
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Harvey Wasserman's SOLARTOPIA! is at www.solartopia.org. He edits the nukefree.org website.
Follow Harvey Wasserman on Twitter: www.twitter.com/solartopia
A loan guarantee allows nuke companies to get cheap loans just as if the USA gov got the loan directly.
And 50% of nukes are expected to default on those loans according to the CBO.
Get your facts right.
It's good to see you understand the concept of a loan guarantee. So you obviously know I do have my facts straight. Southern won't default.
Rooftop solar is cheaper, and faster to install.
wind and waste are half nukes costs.
Nuke power has killed 6 million people with cancers.
The reason the US backs these ventures is that the same US imposes strict regulations on nuclear that are anti-competetive.
If you are willing to concede these regulations are a reason the US nuclear industry is expensive, then streamline the regulations and the process (without sacrificing safety) and we will see how the industry responds.
The mere fact that it costs $20000 for a nuclear-grade valve versus $2000 for an oil fired plant grade valve (which btw can burst and kill a person with superheated steam) is one reason your people are just causing more work for yourself.
Its a vicious cycle, or more likely, a viscous cycle when antinukes cause the process to delay.
Get smart about nuclear technology or get out. Quit mucking up the works and let real professionals do their jobs the best way they can. Else, you do it Mr Wasserman. If you even can.
The fee is an upfront payment from Southern to the government for the guarantee.
Then they get a loan, and they pay interest on that.
So if you want to demand that you be allowed to pay a 1% fee for your loans, Harvey, knock yourself out. Nobody is going to refuse to take your money.
Nukes are getting 500M$ per reactor per year in breaks.
Nukes cannot survive without gov support.
Green is far cheaper and faster to install.
Of course they can: http://www.amnucins.com/ .
Why then does Harvey persist with his fiction about this? "At least the home buyers can get private liability insurance, which the nuke builders can't." He has been around this subject for many decades now - surely he cannot remain so ignorant.
Joffan knows that without an act of congress, insurance for overall liability in nuclear would not exist.
This has been Joffan's slight of hand of the day
yeah sure they can get $165M of insurance yet Palisades in Michigan was calcd by the government as being able to cause $200B in damage....yeah right, just $200B (what if the plume went over Chicago and Milwaukee)
Clunkers I tell ya!
http://nukeprofessional.blogspot.com/2012/06/clunkers-palisades-for-one-video-doc.html
From the NRC fact sheet on Price Anderson:
Under existing policy, owners of nuclear power plants pay a premium each year for $375 million in private insurance for offsite liability coverage for each reactor unit. This primary or first tier, insurance is supplemented by a second tier. In the event a nuclear accident, causes damages in excess of $375 million, each licensee would be assessed a prorated share of the excess up to $111.9 million. With 104 reactors currently licensed to operate, this secondary tier of funds contains about $11.6 billion.http://www.nrc.gov/reading-rm/doc-collections/fact-sheets/funds-fs.html
Why?"
Because government wrongdoing is the main threat to a holder of nuclear plant construction debt. If government is on the hook, it is less likely to do wrong (i.e. red-tape the project to death, and collect increased natural gas royalties as a result).
From he NRC
Each nuclear power plant licensee must report to the NRC every two years the status of its decommissioning funding for each reactor or share of a reactor that it owns. The report must estimate the minimum amount needed for decommissioning by using the formulas found in 10 CFR 50.75(c).
http://www.nrc.gov/reading-rm/doc-collections/fact-sheets/decommissioning.html
Basically, "Nuke decommissioning costs unmanageably huge. Just can't quantify maximum." Must we roll decommissioning into solar and wind? Do you really want to start comparing COSTS of decommissioning the three? Because you will lose and the difference will be ugly. Nuclear mismanages budgets massively on both ends. Always has. No technology comes close in blowing budgets. Other analyses are out there. (Union of concerned scientists).
Most importantly, with rooftop solar there is no decommissioning. "Rooftop" solar represents best land-use of all technologies and requires the least transmision infrastructure. (rooftop > Buildings, homes, garages, highway walls, other structures, anything built.) NREL says only 7% of all "structures" with PV could theoretcially entire current demand. That is pie-in-sky but mincing misses the point. Best policy is encouragement of "rooftop." Let it self fund. Cheap, safe, carbon reducing. Some solar and wind farms will help. Encourage them. Regarding intermittency, Liquid Metal Battery promises to be up very soon, lithium batteries soon, flywheels also? Solar tres: molten salt was already providing 24 hours of electrons from the sun a full year ago. So we've crossed that barrier...Take all subsidies you want to give nuclear and hand them right over to any alternatives to cover intermittency. The market's rapidly paving the way to covering intermittency anywhere even as extant plants can help while solar comes on-line. We don't need dirty sources any more.
One thing I think Harvey misses is there is a key difference between Vogtle and Solyndra. What people ultimately want, is electric power. Solyndra sold solar panels, which could generate electricity. Vogtle will sell electricity.
Once the plant is built, it is very unlikely to suffer per-unit *losses*. Solyndra was losing money on every solar panel they built, so the more they built, the more money they'd lose. Nuclear plants are expensive, but once built, the electricity, on a per-unit basis, is essentially free (there are some fuel and operations&maintenance costs, but those are very very low compared to the power output of the plant).
In other words, once a nuclear plant is built, it's hard to say for sure that it'll be able to sell electricity at a price that will make a profit, but even at "low" prices, that plant is recovering costs/paying the mortgage. In otherwords, it becomes an asset with positive value - that is, it can make money as long as it's operating, whether it makes enough money or not to completely cover the loan (although, it is very unlikely that if it operates, it won't pay off the loan).
Solyndra, on the other hand, as a manufacturer, got the loan, but because they were losing money on every unit, continuing to operate the plant just lost more money, so it had *negative* value as an asset.
It's nukes that still need fuel, waste disposal, and decommissioning.
The other good answer is, that the nuclear industry is a new industry. Yeah, I said it. They are starting to build the first new reactors in 30 years. The industry in the U.S. shutdown, and has been shutdown, so at this point, it is a new industry, again. Of course, the U.S. doesn't prop up most new industries, but clean, sustainable energy is a national security issue. We absolutely need to encourage all feasible clean energy industries - solar, wind, nuclear, geothermal, anything that has a sound scientific basis.
Despite the Solyndra bankruptcy, I'm still a supporter of government subsidies for all these fledgeling industries, until such time as we definitely conclude that any particular technology is a dead end. I don't think we've reached that point with nuclear. There were reasons the nuclear industry shut down for 30 years - mostly because we needed our nuclear engineers to go back to the computer and re-design the reactors to be safer while also being more economic.
You might think it's funny to call nuclear "economic", because the up-front price tag is so high, but on a per-kWh basis, they are, and can get cheaper with economies of scale.
Well that is better than losing money
But come on, what kind of a joke of an investment is this for a new plant?
The only nuke that makes sense these days is to buy a clunker like Palisades or Indian and then run it into the ground. Soup that bitch up with a power uprate, and give some red bull to the geisers working at walmart so they can work harder until they die. Same thing.
http://nukeprofessional.blogspot.com/2012/06/clunkers-palisades-for-one-video-doc.html
For someone what doesnt know about reactor operations, I'd say you have taken liberties with your "nuke proffessional" schtick.
Get a grip.
sam baitz
ceo
www.shieldfunding.com
This disaster might have been mitigated to a great degree if not for the fact that Tepco, like most of the energy industry is ruled by concern for profit not public safety.
The Southern Company has power (no pun intended).