Three “conditions pending” as Southern Company and DOE negotiate loan guarantee for new nuclear reactors

Etopia News spoke today with Ebony Meeks, Press Assistant at the U.S. Department of Energy, about the on-going negotiations between DOE and Southern Company for a loan guarantee in support of the major utility’s plans to build two new nuclear reactors in Georgia.

Ms. Meeks said that there were three “conditions pending” that need to be fulfilled before the loan guarantee can be issued.

First, the Nuclear Regulatory Commission (NRC) needs to issue a COL, or Combined License to build and operate the proposed plants. More about this at: http://www.nrc.gov/reactors/new-reactors/col.html

According to the NRC site:

By issuing a combined license (COL), the U.S. Nuclear Regulatory Commission (NRC) authorizes the licensee to construct and (with specified conditions) operate a nuclear power plant at a specific site, in accordance with established laws and regulations. A COL is valid for 40 years from the date of the Commission finding, under Title 10, Section 52.103 (g), of the Code of Federal Regulations [10 CFR 52.103(g)], that the acceptance criteria in the combined license are met. A COL can be renewed for an additional 20 years. The NRC expects to receive applications for new LWR {Light Water Reactor] facilities in a variety of projected locations throughout the United States.

Second, the DOE and Southern Company need to agree on the size of the “credit subsidy” payment to be made in return for the loan guarantee. Ms. Meeks said that information about the size of this payment was “proprietary,” but that it should be released when the loan agreement closes.

Third, the loan guarantee can only cover 80% of the project cost, so Southern Company, and its associated partners, need to raise 20% of the project funding from other sources, as a condition for getting the loan guarantee.

Ms. Meeks indicated that the 80% loan itself is expected to come from the Federal Financing Bank.

Obama’s pro-nuke move has no effect on Republican opposition to cap-and-trade

On February 16th, President Obama announced the granting of a provisional loan guarantee to Southern Company to help it raise the billions of dollars it needs to build two new nuclear reactors. Commentators said one of the reasons the President was coming out in support of nuclear energy was to convince Republicans to support broad cap-and-trade legislation intended to combat climate change.

Etopia News today contacted the office of Senate Republican Leader Mitch McConnell and asked if the President’s pro-nuclear action had impacted their position against cap-and-trade.

“We still don’t support the national energy tax,” said McConnell spokesperson Don Stewart. “Is that what the Republicans call cap-and-trade?” he was asked. “Yes, that’s what it is, isn’t it?” he replied. “So you don’t support cap-and-trade even though the President has come out in support of nuclear power?” “Yes,” he said.

Utility expecting billions in taxpayer funding for two new nuclear reactors

On February 16th, President Obama offered Southern Company provisional loan guarantees for $3.4 billion to help it finance the construction of the first new nuclear reactors in the U.S. in over 30 years, Read about it at:

http://www.southerncompany.com/news/iframe_pressroom.aspx

Mentioned in this press release, but not as widely reported, is the fact that the utility expects to get the actual multi-billion dollar loan for building the reactors from the Federal Government as well, specifically, from the little-known Federal Financing Bank (FFB).

http://www.ustreas.gov/ffb/

Today, March 4th, Southern Company spokesperson Steven Higginbottom re-iterated to Etopia News by phone that “it’s our understanding that the funding will come from the Federal Financing Bank.”

Public funding to build the twin reactors, Vogtle 3 and 4, in not yet a done deal. U.S. Department of Treasury spokesperson Sandra Salstrom today told Etopia News by e-mail that:

“If and when a loan is ever made for this, it will be made public by the FFB.”

The consensus view on this seems to be that Southern Company is focusing its current efforts on negotiating the terms of the loan guarantee with the Department of Energy, making sure that the “credit subsidy” cost included in the project financing be as low as possible, and getting the licenses needed to construct and operate the proposed nuclear reactors.

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