$8.3 billion in taxpayer dollars at risk if DOE fast-tracks approval for Southern Company loan guarantee for nuclear project beset by financial risk, serious safety concerns
WASHINGTON, D.C. – Last week’s decision by the Nuclear Regulatory Commission to approve the licenses for the Vogtle Nuclear Power Plant means the Department of Energy (DOE) could at any time approve a loan guarantee of $8.3 billion for a project surrounded by serious safety concerns and to a company beset by financial woes related to the project. Today, Congressman Edward J. Markey (D-Mass), top Democrat on the Natural Resources Committee and senior member of the Energy and Commerce Committee, urged DOESecretary Steven Chu to implement of all recommendations made in the just-released White House-ordered review of the Energy Department’s loan guarantee program prior to awarding any further loan guarantees, either on a conditional or final basis. The proposed nuclear loan guarantee to the Southern Company is one of the largest of any previous loan guarantee under the DOE program and is more than 15 times larger than the loan guarantee granted toSolyndra. In the past 18 months, Southern Company's credit rating has been downgraded as a result of its pursuit of the Vogtle project.
“The Republican push for a loan guarantee for a nuclear reactor project exponentially riskier than Solyndra proves that their interests are not in financial stewardship but in political game playing,” said Rep. Markey. “Given the massive taxpayer debt to be assumed and the extraordinary risk associated with the Vogtle project, we should not act on final approval of the Southern Company loan guarantee unless all of the improvements recommended in the Allison report have been put in place to reduce the likelihood of a multi-billion dollar taxpayer bailout.”
A copy of Markey’s letter to the Department of Energy can be found below.
The Allison report found absolutely no evidence of illegality on the part of the Department of Energy or the White House and no evidence of politicization of the loan guarantee process, contrary to Republican accusations and political sanctimony. However, the report did find some shortcomings within the loan guarantee program and suggested specific measures to address them in order to mitigate financial risk to taxpayers.
Key recommendations from the report include:
- DOE should assign authorities for decision-making only to individual managers and never to committees where collective responsibility can obscure individual accountability.
- DOE should develop explicit objectives and standards of performance for managing the Portfolio during the construction phase of the projects and beyond.
- DOE should create a new Risk Management department encompassing all DOE functions that monitor LPO and should appoint a highly experienced Chief Risk Officer to head it. DOE should also reorganize oversight of the Program.
- Overall governance of the Programs would benefit from access to senior government officials of other departments and agencies who have knowledge of proven ‘best practices’ across credit programs government-wide.
“This report represents a strong dose of reality for Congressional Republicans who have chosen to use the failure of one loan guarantee recipient—Solyndra—as a rationale for abandoning all support for clean energy and as the basis for waging politically-motivated investigations into the company over the past year,” writes Rep. Markey in the letter to Secretary Chu.
In September, Rep. Markey called on Chairmen Fred Upton and Cliff Stearns to hold hearings on the implementation of the nuclear power plant loan guarantee program, the issuance of the conditional nuclear loan guarantee that has been awarded, and the role the nuclear industry has had in altering the terms associated with subordination.