Statement by Ryan Alexander, president of Taxpayers for Common Sense, on the announcement by Department of Energy (DOE) Secretary Moniz of plans to finalize a $6.5 billion loan guarantee for the Southern Company to construct two nuclear reactors at Plant Vogtle in Burke County, Georgia.
DOE first offered Southern Company loan guarantees in 2010 and has extended the deadline for agreement six times.
Washington, DC – It is unfortunate the Department of Energy has decided to hand out more than $6.5 billion in loan guarantees to a financially and technically troubled nuclear reactor project. Taxpayers lost $500 million on the failed Solyndra solar project, this time the hit could tally in the billions.
Taxpayers are assuming too much risk on this fledgling reactor project. Private investors won’t touch it. The project is now $1.5 billion over budget and almost two years behind schedule. Nearly every major Wall Street credit rating firm has downgraded Southern Company and the related entities because of the risks associated with the Vogtle project.
Details of the deal are slim, which is not surprising because little about the Dept. of Energy loan guarantee program has been transparent. The government loan guarantees will save $200+ million for Southern Company subsidiary Georgia Power and Oglethorpe Power, who say they don’t need them, while gambling $6.5 billion on a reactor construction project that could make Solyndra-like losses look like chump change. A deal with a third partner, MEAG, that could tack on an additional $1.8 billion to the loan guarantee total is currently on hold until the summer.
The White House and Congress must face the reality that loan guarantees are anything but “free money.” In the case of Vogtle, these loan guarantees are backing a project with a history of unreliable cost projections, significant designs flaws, and construction delays. Gambling billions of tax dollars on risky projects like Vogtle is fiscally reckless.
651 Pennsylvania Ave, SE • Washington, DC 20003 • Tel: (202) 546-8500 •