Markey: GOP Picks Risky Nukes Instead Of Clean Renewables (Solyndra)

Markey: GOP Picks Risky Nukes Instead Of Clean Renewables
By Brad Johnson on Mar 20, 2011

The nuclear disaster in Japan continues to deepen the sense of devastation from one of the worst tsunamis in history. Despite a long history of concern over the safety of the Fukushima Daiichi plant, nuclear power boosters like Sen. John McCain (R-AZ) now claim the ongoing meltdown is something “no one has ever really anticipated outside of science fiction movies.”

Fueled by intense lobbying from the nuclear industry, Republicans in the House of Representatives are ignoring the meltdown, pushing full steam ahead with billions of dollars in taxpayer subsidies for new nuclear plants, even as they zero out programs for renewable energy. The Department of Energy’s successful clean energy loan guarantee program is on the chopping block — except for nuclear power. On Face the Nation, Rep. Ed Markey (D-MA) criticized the choice to put public money on risky nuclear companies instead of clean wind, solar, and geothermal power:

Unbelievably, the nuclear industry was able, just three weeks ago, to convince the Republican House of Representatives to zero out the loan guarantee money for wind and solar and geothermal, and to put in $18 billion in taxpayer-guaranteed loan guarantees for the nuclear industry. Well, that’s ancient history, already, because it’s pretty clear that the nuclear industry as an electrical-generating part of our mix for the future is now going to meet its maker in the marketplace. It won’t be protesters. It will be Wall Street investors that are going to be raising real questions about its viability going forward...

For Insight On Solyndra Loan, Ask The Nuclear Industry, Markey Says

Among the key questions being raised by Congressional Republicans regarding the $535 million federal loan guarantee provided by the Department of Energy to Solyndra, the California solar technology company that subsequently failed, is why the loan was restructured earlier this year to put private investors ahead of taxpayers in the repayment queue, should just such a failure come about.

"It is clear that Solyndra was a dubious investment, but DOE doubled down in March of this year and restructured the loan, possibly further increasing taxpayers’ liability," said House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-Fla.) in a joint statement issued immediately after Solyndra's announcement at the end of last month that it was filing for Chapter 11 bankruptcy protection and laying off more than 1,000 workers.

Why the DOE restructured the loan "is a question we want answered," the legislators continued. "In this time of record debt such disregard for taxpayer dollars cannot be tolerated."

Stearns has suggested that such a restructuring may have even been illegal, citing rules laid out in the Energy Policy Act of 2005.

But Rep. Edward Markey (D-Mass.) argued ...

Markey Calls for Scrutiny of Nuclear-Power Loan Guarantees
By Brian Wingfield - Sep 23, 2011 11:15 AM GMT-0400

Congress should examine whether the U.S. nuclear industry pressed lawmakers and the Energy Department to alter loan-guarantee requirements for reactors, Representative Edward Markey said.

“I urge you to commence hearings into the implementation of the nuclear power plant loan-guarantee program,” including an $8.3 billion award to a subsidiary of Atlanta-based Southern Co. (SO), Markey said today in a letter to House Energy and Commerce Committee Chairman Fred Upton, a Michigan Republican.

The nuclear industry successfully pushed to put reimbursement for private investors ahead of taxpayers in the event of a bankruptcy or liquidation, said Markey, a Massachusetts Democrat. The Energy Department agreed in 2009, he said.

Republicans in the House are investigating a $535 million loan guarantee for solar-panel maker Solyndra LLC, which filed for bankruptcy protection on Sept. 6. In February, Solyndra persuaded the Energy Department to accept a refinancing that put the federal government behind new investors in an effort to keep the company going.

The department awarded Southern’s Georgia Power a conditional guarantee in February 2010 to build two nuclear reactors at its Vogtle plant near Waynesboro, Georgia. The U.S. Nuclear Regulatory Commission is scheduled to hold a Sept. 27 hearing on Southern’s license application for the reactors.

“We should subject the nuclear loan-guarantee program ...

For this estimate, CBO assumes that the first nuclear plant built using a federal loan guarantee would have a capacity of 1,100 megawatts and have associated project costs of $2.5 billion. We expect that such a plant would be located at the site of an existing nuclear plant and would employ a reactor design certified by the NRC prior to construction. This plant would be the first to be licensed under the NRC’s new licensing procedures, which have been extensively revised over the past decade.
Based on current industry practices, CBO expects that any new nuclear construction project would be financed with 50 percent equity and 50 percent debt. The high equity participation reflects the current practice of purchasing energy assets using high equity stakes, 100 percent in some cases, used by companies likely to undertake a new nuclear construction project. Thus, we assume that the government loan guarantee would cover half the construction cost of a new plant, or $1.25 billion in 2011.

CBO considers the risk of default on such a loan guarantee to be very high—well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources. In addition, this project would have significant technical risk because it would be the first of a new generation of nuclear plants, as well as project delay and interruption risk due to licensing and regulatory proceedings.