For the first time in decades, a new nuclear reactor is getting its federal license to build and operate in the United States. Today, the Nuclear Regulatory Commission issued the first ever combined operating license for Southern Company’s Plant Vogtle expansion which includes the construction of two new reactors in Burke County, Georgia. But while securing a license clears one hurdle for the new nuclear reactor project, it doesn’t change the massive financial challenges that make the Plant Vogtle expansion an unappealing investment for federal taxpayers.
Before moving forward with construction, Southern Company is hoping to obtain an $8.3 billion taxpayer-backed loan guarantee. At present, the Department of Energy (DOE) has awarded a conditional commitment for the guarantee, but announcement of the license could trigger a final award. The loan guarantee would come from the Title XVII program and provide generous terms that force taxpayers to carry the risk for up to 80 percent of the project’s cost.
Federal taxpayers should not be asked to provide this massive subsidy. High costs, construction delays, and technical problems still plague the nuclear power industry making it uncompetitive with other energy sources and an unattractive prospect for any investor—especially federal taxpayers facing trillion dollar deficits over the next decade.
The loan guarantee program has fatal flaws, as was evidenced by its first default with Solyndra, the solar company that received a $535 million loan guarantee. The program operates secretively, withholding important information from the public and does little to show how providing a loan guarantee is in the interest of the taxpayer. Lawmakers from both sides of the aisle and independent government agencies have called attention to the program’s flaws, but little has been done to protect taxpayer interests. If anything, the program has become more attractive to applicants by limiting taxpayers' right to reclaim losses in the event of default. If DOE moves forward on the Southern Company loan guarantee, Solyndra’s losses would pale in comparison to what taxpayers stand to lose on the $14 billion nuclear reactor expansion.
Sign Up for Updates
