VOGTLE BIG BET$ LOTTO

Big-Bets

Where has all the public’s money gone?

by Glenn Carroll, illustrated by Tom Ferguson

ATLANTA 5/17/17: IT MAY BE EASIER TO UNDERSTAND the fast-moving drama of the slow-moving construction of Vogtle 3 & 4 if you look at the whole affair as a high-stakes betting game rather than the high-risk nuclear power project it appears to be.

If you haven’t already, tune into the frequent financial headlines about the $10 billion debt ruining Georgia Power’s multi-national corporate partners building AP1000 reactors in Burke County, Georgia. Tom Ferguson, famous artist and Nuclear Watch South board president, has created the above infographic to help you understand the action-packed poker game: VOGTLE BIG BET$ LOTTO!

(We join the game already in progress)

In December, Georgia Power secured a commitment from the Georgia Public Service Commission (PSC) to be reimbursed for its portion of billions of dollars in cost overruns that had been tied up in litigation with reactor designer Westinghouse for two years.

Four days later, the Japanese firm Toshiba, parent company of U.S.-based Westinghouse, announced substantial losses from its U.S. nuclear reactor projects. Toshiba had taken on all future cost overruns at Vogtle as part of its settlement with Georgia Power, and Toshiba’s stock went into freefall as it was revealed that the nuclear losses amounted to $10 billion.

Westinghouse declared bankruptcy in March while suing the construction company it had acquired as part of the settlement, Stone & Webster/Shaw/CB&I, for concealing several billion in debt which CB&I was carrying from Vogtle 3 & 4 (and Summer 2 & 3 in SC) in the deal.

All the companies involved have been honing their profit-making skills for a century and have rich, litigious histories. In the case of Westinghouse, bankruptcy appears to be a business strategy — it was bailed out by Toshiba after bankrupting British Nuclear Fuels Ltd. in a Japanese MOX fuel scandal. Toshiba made a risky bet on Westinghouse, paying three times the asking price because of giddy expectations of a “Nuclear Renaissance” back in 2006.

A most important detail of the game is that Georgia Power’s bets have been placed with public money: $2 billion collected from Georgia customers in an up-front nuclear construction tax on electricity bills (CWIP) PLUS $8 billion in taxpayer dollars loaned by the U.S. Department of Energy (DOE).

Georgia Power emerges as the Big Winner posting startling annual profits more than 20% higher than before Vogtle construction! In light of the bankruptcies, Georgia Power says it is reviewing its options, including to stop construction of Vogtle.

Nuclear Watch South has filed a formal request for an emergency public hearing with the PSC and for a deadline to be set for Georgia Power to submit its plan forward. Georgia Power customers continue to pay $23 million per month to keep building an unneeded power project with an uncertain future. Today, we are still waiting for the PSC to exercise its authority and take hold of the situation.

Last week, the public came out strong to say “NOT ONE MORE CENT FOR VOGTLE” at the PSC’s 16th Semi-Annual Vogtle Construction Monitoring Review public hearing. Media coverage was strong and our message is beginning to show up in the narrative. The next public hearing will be on June 29 at 10AM at the PSC.

Follow the action at nonukesyall.org.

Federal Government Backs 6.5 Billion Dollars in Loans for Plant Vogtle

Vogtle-Dec-13-2013-IMG_9872-smGlenn Carroll

(APN) ATLANTA — On February 20, 2014, U.S. Secretary of Energy Ernest Moniz came down to Georgia to sign off on giving 6.5 billion in taxpayer dollars to Southern Company, its subsidiary

Georgia Power, and Oglethorpe Power to build two nuclear reactors at Plant Vogtle near Augusta.

MEAG (Municipal Electric Association of Georgia), 22.7% owner of Vogtle is seeking 1.8 billion dollars in a separate loan guarantee and has a July closure deadline.

The terms of the loan are secret, but Southern Company has divulged to the media that it has put up collateral for the massive loan — namely, the unfinished Vogtle 3 and 4 reactors.

The relatively obscure loan guarantee program goes like this: Wall Street wouldn’t underwrite risky nuclear energy development, so erstwhile President George W. Bush persuaded U.S. Congress to pass a bill allowing the U.S. Department of Energy (DOE) to give “loan guarantees” to jump start construction of a new generation of nuclear reactors.  These loan guarantees are direct payouts from the U.S. Treasury.

Troublingly, there is an historic 50 percent default rate in the loan guarantee program.

As the so-called “Nuclear Renaissance,” which was touted in the late Bush years, shriveled, Southern Company has become one of only two utilities in the country even attempting new reactors, and Southern Company became the sole candidate requesting loan guarantees.

Southern Company’s loan was first announced by President Barack Obama in 2010.  Four years passed, in which Vogtle, less than half-finished, has gone 1.6 billion dollars over budget and 21 months behind schedule.

U.S. citizens have sent literally tens of thousands of letters and petitions to Obama and DOE demanding that the loan guarantees be withdrawn.

Southern Company has said repeatedly that it does not even need the loan guarantees.

The loan had been hung up for so long, reportedly, because Southern Company balked at the terms which amounted to an unbelievably low interest rate, an upfront “credit subsidy fee” of only 0.5-1.5 percent.

However, because the loan guarantee terms are secret, it is not known if Southern Company actually ended up paying anything at all to use taxpayer money.

We do know that DOE gave weight to Southern Company’s “captive ratepayers” and the Georgia Public Service Commission’s generously allowing electric customers to be taxed up front for Vogtle construction costs in a financing mechanism called Construction Work in Progress (CWIP).

Sara Barczak, high-risk energy choices program director for Southern Alliance for Clean Energy, calls it “corporate welfare for one of the largest power companies in the country.”

Recent analysis of Georgia Power annual report data shows that Georgia Power is not even using 46 percent of its electrical production capacity, has suffered flat sales for ten years years, and has posted declining sales the past three years.

This gives rise to real concern whether Southern Company, Georgia Power, Oglethorpe Power and MEAG can sell enough electricity to pay back their hefty loan from U.S. taxpayers.

“This loan guarantee is a sweetheart deal for the utilities building Plant Vogtle. Essentially, they’re gambling with every U.S. taxpayer’s dollars to unnecessarily expand one plant here in Georgia,” Becky Rafter, executive director of Georgia Women’s Action for New Directions, said.

Glenn Carroll is coordinator of Nuclear Watch South based in Atlanta. http://www.nuclearwatchsouth.org. This article originally appeared in Atlanta Progressive News February 26, 2014

Georgia Power Stuck in a Nuclear Jam

First concrete poured at nuclear reactor in more than 30 years. Plant Vogtle, Georgia.

First concrete poured at nuclear reactor in more than 30 years. Plant Vogtle, Georgia.

Glenn Carroll

Everybody except for Georgia is jumping on the wind and solar bandwagon, but Georgia Power is side-lined in a nuclear jam like a horse-buggy manufacturer at the dawning of the Ford assembly line

Solar and wind are setting records in output and lower costs. Technological breakthroughs in collection and storage of wind and solar have been developed and deployed at such a rapid clip that renewable energy sources are now contributing more electricity to the grid, at lower cost, than nuclear. The historic shift has analysts now harking the coming day when wind and solar will undercut King Coal as well.

It’s easy to see how Georgia Power could get into a nuclear jam. President Bush tried to jumpstart a “nuclear renaissance” by dangling multi-billion dollar enticements to high-stakes utilities like Georgia Power. Georgia Power’s parent company Southern Company had a Federal Reserve Bank-connected CEO position the company at the head of the short list for $8.3 billion in low-interest tax-funded federal loans to build two additional nuclear reactors in Burke County, Georgia. But now Fukushima has changed everything and the nuclear renaissance is a bust, but Georgia Power is left stuck practically alone in a nuclear jam.

This isn’t the first time Georgia Power, and Georgia, have been taken in by federal nuclear promises. Georgia Power only got in the nuclear game after the feds promised to take charge of the radioactive wastes that are generated with nuclear energy. The 1998 nuclear waste deadline has long passed and no new promises are even on the table. Thousands of tons of dangerous high-level radioactive wastes remain indefinitely stored in flimsy warehouses on the banks of Georgia rivers vulnerable to catastrophic loss of coolant and fuel pool fires.

Well meaning Georgia legislators and the Public Service Commission pushed Georgia Power further into the nuclear jam by giving Georgia Power a hefty $2 billion rate hike for “nuclear construction costs.” The escalating rate hike even includes $1 billion of pure profit to Georgia Power for the purpose of ensuring the company will qualify for the low-interest tax-funded federal loan it’s been promised by the feds.

The Nuclear Regulatory Commission reviewing the reactor design proposed to be built at Georgia Power’s Vogtle has thus far failed to mobilize a safety response to the Japanese nuclear disaster and the agency’s in-fighting has landed them before Congress for investigation. Undeterred by internal trouble, the NRC screwed the lid tighter on Georgia Power’s nuclear jam by rushing a majority vote to license the risky new reactor design before completing the Fukushima safety review, placing Georgia Power, and Georgia electric customers, at risk of future unknown and probably expensive reactor safety design upgrades after construction begins.

Industry predictions that gave rationale to the pursuit of new nuclear reactors have been upended by a marked downward trend in electric consumption. Do-it-yourself solar panel installations are sold at major hardware stores and home centers. Simple technologies available to consumers, like LED lighting, and clotheslines will further boost the positive energy conservation trends.

May Georgia Power remember the hard lessons of building Vogtle 1 and 2 before all Georgians experience the tragic lessons of Chernobyl and Fukushima! Georgia Power must correct its course or it will spend the next decade mired in a complex nuclear project while the world moves on. Georgia Power’s blind commitment to outmoded nuclear power robs all Georgians of our opportunity to harness the benign sun and wind power abundant in our state.

So … how can Georgia Power get out of its nuclear jam? A good first step in the right direction would be to install solar panels on the 40-acre site already cleared for Vogtle 3 and 4.

Glenn Carroll is coordinator of Nuclear Watch South. This blog originally appeared at Georgia WAND on 5/25/12.