Georgia nuclear power plant could be Solyndra redux, report says
A report by two energy-consulting firms says the US government has not protected US taxpayers well enough against the risks of federal loan guarantees to a new nuclear power project.
Construction of the first newly licensed US nuclear power plant in decades could become a "Solyndra-like" debacle thanks to billions in federal loan guarantees whose terms appear too weak to protect taxpayers, according to one group’s analysis of internal documents released by the US Department of Energy.Skip to next paragraph
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The two-reactor $14 billion Vogtle plant being built in Georgia is seen as a test of the US nuclear industry's planned "renaissance" with a new nuclear reactor design and updated construction processes all aimed at cutting time and costs.
But two Massachusetts-based energy-consulting firms, Earth Track and Synapse Energy Economics, say the $8.3 billion in federal loan guarantees backing the project were crafted with excessively favorable financial terms for the recipient companies, weak federal oversight, and possible political interference in the loan-guarantee process.
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The two firms analyzed hundreds of Energy Department e-mails and financial documents released earlier this month to the Southern Alliance for Clean Energy (SACE), a green-energy watchdog group that won access to them in a Freedom of Information Act lawsuit.
In their report, Earth Track and Synapse say the documents reveal:
- "Potentially troubling" conversations between political appointees and borrowers over loan terms and getting the deal done.
- Credit subsidy payments, the amount that companies pay in compensation for the government loan guarantees, that appear far too low to offer adequate protection to taxpayers in the event of a default.
- An "over-reliance on external contractors" for key risk evaluations.
- Continued tinkering with credit subsidy assessment tools even after credit subsidy estimate letters were sent to borrowers, leaving taxpayers with more risk than necessary.