Energy Secretary Ernest Moniz announced on Wednesday, February 19th, that his agency approved a multibillion dollar taxpayer-backed loan guarantee for the first nuclear reactors to be built in the U.S. in more than 30 years. We view this as a costly act of desperation for a failing project.
An $8.3 billion loan guarantee was conditionally approved four years ago for two new reactors at Southern Company’s Vogtle plant in Waynesboro, Ga. Since then, negotiations around the terms of the loan guarantee have been extended five times. Secretary Moniz’s announcement – that the government has finalized terms with two of three companies – accounts for just $6.5 billion of the loan. With approval for $1.8 billion of the loan still pending, the agency is clearly attempting to give momentum to the stalled project.
The construction of the two new reactors at the Vogtle plant are 21 months behind schedule and $1.6 billion over budget. The original two units at Vogtle resulted in 1000% cost overruns from the original $1 billion dollar estimate as well as decades-long set-backs and construction delays. This not only calls into question the decision to underwrite this risky project with taxpayer dollars, but proves that the same issues that plagued reactor construction more than three decades ago have not been resolved.
Nuclear energy continues to be beset with safety issues and produces toxic wastes that we still don’t have a solution for – hardly a technology the government should be promoting and propping up with taxpayer funds.
We berate wall street for their high-risk investments, yet the Department of Energy seems to have little to no risk aversion for these types of loan guarantees. This is a bad deal for the American people who have been put on the hook for a project that is both embroiled in delays and cost overruns and to a company that has publicly stated that it does not need federal loans to complete the project.
This is a classic case of throwing good money after bad.