Report suggests Solyndra-like problems in federal nuclear power loan guarantee
The Obama administration’s approval of a federal loan guarantee for the construction of two Georgia nuclear reactors was met with applause from across the political spectrum, but new analysis reveals potential Solyndra-like problems facing the project.
“E-mails indicate periodic involvement by the Secretary of Energy on loans and loan terms, and by the White House and top levels of Department of the Treasury on other issues related to the Vogtle Project,” reads the analysis by Earth Track and Synapse Energy Economics, which was conducted on behalf of the Southern Alliance for Clean Energy and Friends of the Earth.
Earth Track and Synapse Energy Economics analyzed hundreds of documents obtained through multiple Freedom of Information Act requests.
They shed light on potential problems with the loan guarantee process for the Vogtle nuclear reactors in Georgia, including indications of political involvement from the Obama administration in key financial decisions.
“We are not alleging … any improper conduct. However, it is clear that top officials are engaged and interested in trying to make the Vogtle loan guarantee work,” Max Chang, a report author and associate at Synapse Energy Economics, told reporters in a teleconference.
In February 2010, the Energy Department offered the Georgia Power Company, Oglethorpe Power Corporation and the Municipal Electric Authority of Georgia an $8.3 billion conditional loan guarantee to construct two new nuclear reactors in Waynesboro, Georgia — the first nuclear reactor to break ground since 1978.
“Given the findings of various reviews of the Solyndra loan process, the massive scale of the Vogtle conditional loan guarantee, its complexity, and the limited experience of DOE in handling loans of this size, any hint of political involvement is of particular concern,” Chang said.
The analysis found a number of emails from administration officials suggesting that the loan for the reactors were being fast-tracked.
One October 2009 email from DOE official Kelly Colyar said that “we are under a tight timeline to move our first nuclear power deal forward.”
Documents also reveal direct contact between Energy Secretary Steven Chu and Vogtle project borrowers, and that Chu was involved in discussions with the Georgia Power Corporation and Municipal Electric Authority of Georgia over the specifics of the loan.
“Those discussions were generally with the top management of the companies, according to the report. “This is a potentially troubling blurring of financial risk review, political discussion, and potential modification of loan terms.”
A May 2010 email from DOE senior loan adviser Matthew Winters to then DOE loan programs executive director Jonathan Silver said that, “Today was the deadline for Southern Corporation (Georgia Power) to sign … the conditional commitment letter for the Vogtle nuclear project. … I’m told by Brandon that this course of action was signed off on by the Secretary and was conveyed to Southern.”
Silver was one of DOE officials at the heart of the Solyndra loan scandal and left the department in 2011 to become a distinguished visiting fellow at the liberal Third Way.
Emails also indicate that efforts for the Energy Department to close out consultation were being handled at the “political level” of the Treasury Department.
The report also includes heavily redacted negotiations between Labor Department, the loan recipients, and other departments regarding prevailing wage requirements on the construction of the nuclear reactors. However, the report indicates that indicate that Georgia Power did receive some at least GPC received some Davis-Bacon Act exemptions.
Two more emails suggest White House involvement, as one February 2010 email indicates that the DOE did not “deal” with Shaw, the firm responsible for much of the reactor’s construction. A December 2010 email shows communication between the White House and Nuclear Energy Institute over several issues of concern.
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