Fourth extension on Vogtle nuclear loan guarantee deadline

Southern Company doesn’t want to pay $17 to $52 million to get an $8.33 billion federal loan guarantee. That’s 0.2% to 0.62%. Why should we guarantee SO’s bad bet for pennies down? Let’s just call it off!

Ray Henry wrote for AP yesterday, Talks continue over Ga. nuclear plant loans,

Three years after the U.S. government promised $8.3 billion in lending for a nuclear plant in Georgia, Southern Co. and its partners have not sealed a deal.

President Barack Obama’s administration recently agreed to a fourth extension of the deadline for finalizing lending agreements between Southern Co. subsidiary Georgia Power and the other owners of the nuclear plant now under construction. Congress authorized the funding in 2005 to revive a nuclear industry that at the time expected growth.

Few utilities secured even a preliminary agreement, mostly because power companies dropped plans to build nuclear plants. The Great Recession trimmed the demand for energy, and plummeting natural gas prices made it cheaper to build gas-fired plants. The slumping economy also pushed interest rates to historic lows, reducing borrowing costs and undercutting the need for subsidized lending.

All that and ten nukes have been closed or cancelled in the past year. Even France’s EDF has exited nukes in the U.S. and has already built more U.S. solar and wind power than SO’s new Plant Vogtle nukes would produce.

Southern Company now claims this federal loan guarantee isn’t necessary:

Southern Co. is still pursuing the loans, though company officials say they are not needed to finish the project. The company was able to privately borrow $4.3 billion last year at an average interest rate of less than 3 percent, Southern Co. spokesman Tim Leljedal said in a statement.

“We are committed to financing options that will serve the best interests of our customers, and—as long as the terms and conditions of DOE loan guarantees serve those interests—we will continue to pursue that option,” he said.

Negotiations to win federal financing for a proposed nuclear plant in Maryland fell apart. SCANA Corp. and Santee Cooper applied for loan guarantees to build a nuclear plant in South Carolina, but neither company views the funding as essential.

“Can the company benefit from the program? In our view, yes,” said Dimitri Nikas, an analyst who studies regulated utilities for the Standard and Poor’s credit rating agency. “Is it absolutely critical? Probably not.”

It seems to be Southern Company who’s dragging out the negotiations, because it doesn’t want to pay a few million in fees to get the guarantee. OK, so let’s stop offering it!

About the only reason to continue this loan farce is that plus GA PSC’s irresponsibility in abdicating cost overrun oversight is actively pushing people towards distributed solar power. Still, it’s time to stop burning $20 bills to make electricity when we can get it much more inexpensively from the sun.

If you’re tired of this, you can ask DoE Secretary Ernest Moniz to revoke that loan.

-jsq