Energy Secretary Rick Perry on Friday issued a $3.7 billion federally-backed loan guarantee to keep the Vogtle nuclear power plant under construction in Georgia afloat after years of cost overruns and project delays.
Perry made the announcement after touring the site in Georgia with utility industry officials involved in the project, state regulators, and the governor of Georgia.
He said the Vogtle project is “critically important” to the administration’s goal of revitalizing and expanding the U.S. nuclear industry. “A strong nuclear industry supports a reliable and resilient grid, and strengthens our energy and national security,” he said.
Perry also noted that Vogtle is an energy infrastructure project “with a massive scope employing thousands of workers” that is rebuilding a highly skilled nuclear workforce and supply chain for the future.
But while Perry was touring the site, critics argued that the new financing places the taxpayer on the hook for $12 billion if the power plant flounders.
The Obama administration granted the project $8.3 billion in loan guarantees when the project was priced at $14 billion. Now the project is estimated to cost around $28 billion, prompting Perry to arrange the federal financing boost from Washington.
The plant has also received state approval for over a half-billion dollars in additional funding to be recouped from ratepayers.
Southern Company and its partners, who are building the project, had asked the Trump administration for the additional loan backing as costs increased over the last year.
Tom Pyle, who had led Trump’s transition team at the Energy Department, called Perry’s decision the wrong choice.
“We oppose federal loan guarantees for any energy source, period,” Pyle, who leads the conservative American Energy Alliance that opposes energy subsidies, told the Washington Examiner. “At some point, you have to ask the question, how much is enough for this project?”
Other watchdog groups also stepped in to criticize the Energy Department’s decision.
“Increasing support for a project plagued by cost overruns and delays is an unjustifiable intrusion in the marketplace — it forces taxpayers to take the risks, while the rewards go to the well-heeled Southern Company and its shareholders,” said Taxpayers for Common Sense president Ryan Alexander.
Anti-nuclear activists also objected. Tim Judson, executive director for the Nuclear Information and Resource Service, said that no amount of financing “is going to make it any less likely that the project will fail.”
Judson’s group has opposed the Vogtle plant since the early days of the project.
Judson is betting on a pending lawsuit that could grant utility customers in Georgia the ability to pull out of the project, since they will be paying for the plant through increased rates in the state to help recoup the cost. The lawsuit accuses Georgia Power, a subsidiary of Southern Company, of gross negligence and mismanagement, and therefore should not be awarded with increased rates.
“But now, as a result of DOE providing the additional loan guarantee, US taxpayers are likely on the hook to bail out the utilities through absorbing a $12 billion loss,” Judson said.
