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Plant Vogtle owners get fifth extension on loan guarantee

Sunday, Jan. 5, 2014 7:48 PM
Last updated Monday, Jan. 6, 2014 1:02 AM
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The owners of Plant Vogtle say they will continue to negotiate terms for a federal loan guarantee first offered in 2010 to help finance two new nuclear reactors.

Southern Co. received a fifth extension last week to allow more negotiations with the U.S. Energy Department over its offer of up to $8.3 billion in federal loan guarantees. The most recent extension expired Dec. 31, and the new extension gives them until Jan. 31 to continue discussions.

“We are encouraged by recent progress in our loan guarantee negotiations as we work with the Department of Energy to address a few remaining points, including the need for intergovernmental agency review and approval,” Southern Co. spokesman Tim Leljedal said in an e-mail.

Details of the negotiations are confidential. The government’s $8.3 billion offer included up to $3.46 billion for Georgia Power, which owns a 45.7 percent stake in the Vogtle project; up to $3.05 billion for Oglethorpe, which owns 30 percent; and up to $1.8 billion for MEAG, which owns 22.7 percent. The project’s remaining 1.6 percent is owned by Dalton Utilities.

Loan guarantees, in which the government promises to assume a company’s debt if the company defaults, were developed as an incentive for new nuclear construction.

Vogtle construction can continue without the loan guarantee, Leljedal said.

“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.

The new Westinghouse AP-1000 reactors under construction at the Burke County site are scheduled to go online in 2017 and 2018.

Critics of the federal loan guarantee include environmental group Friends of the Earth, which says Vogtle’s owners should quit negotiating a loan they do not need.

“Georgia Power has stated that it doesn’t need the loan guarantee to continue expansion of the Vogtle reactors, so the government should walk away from this boondoggle and let the private market determine the future of this risky reactor project,” Katherine Fuchs, a nuclear subsidies campaigner for the group, said in a statement.

The group contends that the Vogtle construction has been riddled with cost overruns and scheduling delays, and that more problems will arise as construction continues.

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Little Lamb
45960
Points
Little Lamb 01/05/14 - 09:10 pm
4
2
Holiday Inn Express

From the story:

“Georgia Power has stated that it doesn’t need the loan guarantee to continue expansion of the Vogtle reactors, so the government should walk away from this boondoggle and let the private market determine the future of this risky reactor project,” Katherine Fuchs, a nuclear subsidies campaigner for the group, said in a statement.

Yeah, it's just like the remodeling of the seedy motel down on Broad Street near the Gordon Highway overpass. A private developer bought it, gutted it, remodeled it and is just about ready to open it when — — ta da — — somebody in Augusta government (maybe Fred (Slum) Russell) told them that city government could get them some tax credits to re-imburse them.

The private developer was doing just fine on his own. It is wrong for taxpayers to finance this type of project.

bright idea
814
Points
bright idea 01/05/14 - 09:54 pm
3
0
The government

wants to make this loan so they can have even more control over the project above and beyond environmental regulations. They can have a say on when the reactors run and when they don't. They can pressure the hiring process, the marketing of the electricity and the entire company on other projects. The Southern Co. should walk away from the feds but the cheap money is too hard to resist.

dwb619
93518
Points
dwb619 01/05/14 - 10:17 pm
2
0
loan

It isn't quite clear to me.
is the government loaning Southern Company the money, or just guaranteeing repayment to the creditor should Southern default?

geashe
6
Points
geashe 01/05/14 - 11:15 pm
4
3
Neither

This became a federally funded loan in exchange for union labor to build it. Make no mistake; this was going to be built whether the federal government made a loan or not. I'm not knocking the quality of union labor, just the backdoor way they got the job. Thank you Mr. Obama for repaying your campaign debts on our backs.

corgimom
32343
Points
corgimom 01/06/14 - 06:38 am
3
1
No, there is a difference

No, there is a difference between Vogtle being able to continue without it, versus not needing it.

It's needed, in order for lenders to finance it. Nobody would loan to them without it, because what would you do with a repossessed nuclear reactor? It's different than a house or an office building.

The government doesn't loan the money, the government guarantees the loan, and that is different.

And I would not consider Friends of the Earth to be the ones to decide what should be done. They are hardly experts in nuclear reactor financing or construction, and their opinion means nothing.

corgimom
32343
Points
corgimom 01/06/14 - 06:42 am
3
2
Geashe, it's a Federally

Geashe, it's a Federally guaranteed loan, it's not funded by the government, and you don't understand the difference. There is a significant difference.

It's funded by private institutions, not the government.

The guarantee removes the risk to the private investors, that's all.

nocnoc
42533
Points
nocnoc 01/06/14 - 07:52 am
6
0
Southern Company Doesn't need the Taxpayers $$$$

It has the every customer on the hook 24/7 x 365.
Whether they are a Taxpayer or not.

Talktothehand
60
Points
Talktothehand 01/06/14 - 12:27 pm
3
0
Hey NocNoc..you are so right!

Power/feds have a captive audience 24/7 x 365 days a year. Have you ever had a option on electrical power? Unlike your gas bill every month, which you have competitors, you pay GA. Power or basically use the outhouse to take a crap in the dark! All power companies are federal monopolies…wake up!

ColdBeerBoiledPeanuts
7800
Points
ColdBeerBoiledPeanuts 01/06/14 - 12:46 pm
3
1
The difference between ignorance and knowledge is amazing

The state set up areas to be served by the Georgia Power and the various Electric Membership Coops with clearly drawn lines. The only way those lines can be crossed is by an agreement between the two utilities in question and the PSC. Eventually it may come to you having a choice of several power providers, but then you may want to look at reliability and how quickly your service can be restored following a major storm or disaster. Even with choices that power will have to be delivered over Georgia Power or EMC lines, and for either there will be a charge to maintain those lines.

justthefacts
21770
Points
justthefacts 01/06/14 - 01:24 pm
2
2
Simple

"Nobody would loan to them without it, because what would you do with a repossessed nuclear reactor?" Sell it.

MJTaxpayer
5
Points
MJTaxpayer 01/06/14 - 01:42 pm
3
2
The facts

The loan would be from the Federal Financing Bank (FFB). The loan guarantee just means that the U.S. government (taxpayers) would have to pay in the event of a default. Given the project's escalating costs, production issues, and schedule delays, the chances of that happening seem too high to put taxpayers on the hook.

The loan guarantee is unnecessary. Southern Company, owner of Georgia Power, has said on many occasions that they can get private financing (that is, not through the FFB). Making taxpayers assume unnecessary risk seems irresponsible. We don't pay taxes so that Congress/the executive branch can bet on companies they like.

Here's some well-sourced info from a non-profit, nonpartisan budget watchdog group.

http://www.taxpayer.net/library/article/southern-company-private-financing

http://www.taxpayer.net/library/article/doe-loan-guarantee-program-vogtl...

SCEagle Eye
914
Points
SCEagle Eye 01/06/14 - 02:41 pm
3
3
electricity glut

With home electricity consumption at its lowest point in a decade and little need for power I assume that Georgia Power and its partners are hoping that an out-of-state purchaser steps up to buy the electricity glut? Jacksonville wants some of it and an Alabama entity but where will the bulk of this electricity go? In any event, they want Georgia Power ratepayers to foot the bill and pay in advance on top of that. What a deal the "free market" has placed on the back of rate payers!

ColdBeerBoiledPeanuts
7800
Points
ColdBeerBoiledPeanuts 01/06/14 - 04:55 pm
4
0
Taxpayer and Eagle Eye

The guarantee basically allows Ga Power to secure lower interest on the construction loans, which will save a lot more money than if Ga Power goes it alone.
As for the "Electricity Glut" you may want to read something else, yes most of the electricity has been contracted for, but Ga Power, Thank you Mr. Obama's EPA, is beginning to close down coal plants due to the regulations. To build a coal plant to comply with all the new regulations would cost more than the nuclear plants. If you look around most of the utilility companies in the nation are decommissioning coal plants. Yes you can throw up the natural gas options but what happens if all the plants are natural gas plants. You won't be able to afford it. Solar and Wind? Unless you want to see miles and miles of solar panels and windmills I don't think so.

at0mgrrl
16
Points
at0mgrrl 01/10/14 - 07:16 pm
0
0
$omebody $top $outhern Company

The loan would be from the U.S. treasury, i.e., our hard-earned tax dollars. That is straight from the DOE loan officers lips. Southern Company is balking because it wants 0% interest and to avoid laying any of its own money out for Vogtle. Southern Company says it doesn't need the loan NOW, but when they were working the system over to get CWIP (Construction Work In Progress) (Nuclear Construction Cost Recovery) (7.5% tax on your Georgia Power bill) they were telling the Georgia Public Service Commission that without CWIP, and an automatic profit of 11.15%, they couldn't get the loan guarantees and wouldn't be able to build two additional reactors at Vogtle. Meanwhile, since the decision was made to let Vogtle go forward, electricity sales have tumbled and solar power's, ahem, star has risen. Georgia Power currently has 46% unused capacity. Georgians have poured $5 billion already into an UNNEEDED POWER PLANT. We have at least $15 billion to go. We can help stop Southern Company from hemorrhaging OUR money on this wasteful boondoggle by taking action here: http://www.nonukesyall.org/Action_Obama.html

at0mgrrl
16
Points
at0mgrrl 02/01/14 - 01:09 pm
0
0
Deadline passed at midnight anyone know what heppened?

It was reported that Southern Company delivered some documents hoping to finalize the DOE loan guarantee, does anyone know what happened on yesterday's deadline?

Among the documents were 4th Qtr reports ... Not good, sales declined for an unprecedented 3rd year running and 4th qtr sales remained flat.

Not a good deal for American taxpayers to give a losing proposition $8.3 billion. Thanks to a current TV commercial we can visualize what a vast sum of money $8.3 billion is. It is more than $4,000 in every stadium seat in the U.S.

How can SoCo pay back the loan other than through electricity sales? Like nuclear power or not spending U.S.taxpayers money to Southern Company is corporate welfare and funding failure.

http://www.nuclearwatchsouth.org/Action_Obama.html

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