Politics Mires Nuclear Loan Guarantee Process, Group Maintains
Three years after the U.S. Department of Energy approved an $8.3 billion loan guarantee to be used by Southern Co. and its partners to build two new nuclear reactors, the deal has yet to be finalized. A Georgia-based clean energy group says that the loan should shut down because it places taxpayers at extreme risk.
Loan guarantees are not uncommon. In fact, they gained much of their notoriety as a result of the failure of solar company Solyndra, which lost about $528 million in taxpayer funds. But proponents of those loans say that the potential payback is far greater than the risks. In all cases, the purpose is to get seed money into the hands of energy developers, all to initiate first-of-their-kind projects that would ease the path for similar undertakings.
“We have been critical of this program,” referring to the Energy Department’s issuance of all energy loans, says Doug Koplow, founder of Earth Track and co-author of a report for the Southern Alliance for Clean Energy and Friends of the Earth. “It lacks checks and balances and there are problems with oversight.”
The loan to Southern Co. and its subsidiary Georgia Power, however, is the largest ever -- 16 times that of the one given to Solyndra, says Koplow. The nuclear loan guarantee is part of an $18.5 billion package and one that President Obama has sought to increase to $54.5 billion. To date, only Southern Co. and its partners have been approved.
The Southern Alliance gained access to the documents exchanged between government officials and utility executives, although it says that it required multiple legal filings. Even then, the information it received has been heavily redacted. Moreover, it says that politics have tainted the negotiations and the loan terms are more favorable than what private financing would provide.