The Obama administration’s approval of a federal loan guarantee for the construction of two Georgia nuclear reactors was met with applause from across the political spectrum, but new analysis reveals potential Solyndra-like problems facing the project.
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.
Environmental groups are crying foul on loan terms acquired by Southern Company for its Vogtle nuclear plant.
The Southern Alliance for Clean Energy and others are calling for a greater degree of transparency in the federally-backed financing of the delayed and over-budget project.Anti-nuclear activists are drawing comparisons to the failed energy company Solyndra in a report that took three years to complete.
The nuclear plant near Augusta is the first new reactor to be built in the US in over a decade.
Hundreds of documents released from DOE under a Freedom of Information Request and subsequent litigation shed new light onto DOE's management of an $8.33 billion loan guarantee on offer to support the construction of two new nuclear units at the Vogtle reactor in Georgia. The documents raise questions about how project risks were screened, the loan terms in the conditional committment agreement provided by DOE, the adequacy of the credit subsidy payments from borrowers to the US Treasury under the deal, and involvement by political appointees focused on getting the deal done.
As a researcher, and a as co-director of watchdog group that have both worked to draw attention to the significant subsidies and tax breaks that are lavished on the fossil fuel industry, we are eager to see elected officials take notice of this waste of taxpayer money, especially as the President and Congress work to address the fiscal cliff disaster. That is why we are pleased that a member of Congress with an important platform has recently joined us in this conversation to review fossil fuels’ role in distorting the free market for energy.
Presentation at the 124th Annual Meeting of the National Association of Regulatory Utility Commissioners for a panel entitled "How Should Subsidies be Crafted to Ensure Usefulness as an Effective Tool to Achieve Energy Policy Objectives." The presentation discussed the range of energy subsidies, commonly ignored market supports to conventional fuels, and ways to improve subsidy efficiency. Other presentations on the panel can be accessed here.
The United States has more operating installed geothermal capacity than any other country, contributing nearly one-third of global capacity. Much of the market build-out is due to investments by the U.S. government and DOE in the late 1970s and 1980s, and more recently, to federal tax incentives (coupled with additional state and local programs, which are outside of the scope of this report).
Although the oil shale industry is still in its commercial infancy, it has a long history of government support that continues today. The Bureau of Land Management recently issued two new research, development, and demonstration leases and new federal regulations for commercial leases and royalty rates are expected any day. Before the federal government goes down that road it’s important to take a look back and ask whether we should be throwing good money after bad.
Despite a stated commitment to using market forces, the Romney campaign is turning a blind eye to large and distortionary subsidies to conventional fuels. This review highlights problems with how Romney has framed the energy subsidy problem and highlights important subsidies to fossil fuels that he has ignored.
The Financial Economist's Roundtable (FER) believes that use of FCRA accounting rules to calculate the budgetary costs of federal credit programs has resulted in the systematic understatement of the cost of these programs. This distortion occurs because of the failure of FCRA rules to account for the full cost of all of the risks associated with providing such credit.