Energy Secretary Ernest Moniz plans to announce the closing of $6.5 billion in loan guarantees for Southern Co.'s Plant Vogtle nuclear project at the National Press Club today, according to a source familiar with the details.
DOE will close on two of three of the $8.3 billion in loan guarantees for Vogtle. A third one is pending.
A separate event with DOE, company executives, Georgia utility regulators and other officials is planned at the construction site in southeast Georgia on Thursday, a Georgia Public Service Commissioner confirmed.
A Southern official said the company could not comment beyond this statement:
"As we stated on Southern Company's Jan. 29 earnings call, after extensive negotiations on loan guarantees, subsidiary Georgia Power has delivered its documents to DOE. Since that time, the company has been working through a series of steps that must be taken prior to closing. We're committed to enhancing the customer value of the project through various avenues including the pursuit of loan guarantees."
DOE awarded the conditional loan guarantees to expand Plant Vogtle in 2010 as a way to kick-start nuclear development in the United States after the industry lay dormant for new reactors for nearly three decades. Georgia Power is building the reactors with a group of municipal and cooperative utilities and owns 45.7 percent of the project, representing $6.1 billion.
"The terms and conditions are better than anything you can get in the marketplace," Georgia Public Service Commissioner Stan Wise said. "It's a better deal, and ultimately the beneficiaries are the ratepayers."
Negotiations on loan terms got bogged down after solar panel maker Solyndra -- another recipient of federal loan guarantees -- filed for bankruptcy. The protracted talks created an opening for consumer and environmental groups such as the Southern Alliance for Clean Energy to call for DOE to withdraw the offer.
SACE has filed several Freedom of Information Act requests with DOE to learn more about the terms of the loan guarantees and argues that taxpayers are taking on too much risk for the $14 billion project.
It is "unnecessary to commit the taxpayer to a project with a troubled past and continued inherent risks," SACE and eight other consumer and nuclear activist groups wrote in a letter sent to DOE last month.
SACE has called the loan guarantees a bad deal for taxpayers. The group declined to comment Tuesday.
Southern sees risk shifting
Southern CEO Tom Fanning told analysts in January that the loan guarantees represent about $200 million in value to Georgia Power customers, who have been paying for the project since 2011 with a fee in their monthly bills. Georgia lawmakers and utility regulators approved the controversial fee the year before.
The loan guarantees and the monthly fee in utility bills shift the project's risks away from the company and onto consumers. The Georgia Public Service Commission can re-examine previously approved spending if there is a budget increase, as part of a 2011 agreement struck with the utility and the PSC staff, but that hasn't happened at this point.
Financial analysts and utility regulators have acknowledged the substantial investment that the public is making through the loan guarantees and monthly fee but said it's a necessary way to get the reactors built.
Executives from Georgia Power and Southern first went public with plans to add reactors at Vogtle in 2005. Georgia Power's sister company, Southern Nuclear, which will operate the reactors, filed an application to expand Vogtle in March 2008.
Dozens of other utilities lined up with federal applications to build nuclear projects at the time, but nearly all have pulled them back or put them on hold. Cheap natural gas prices, slowing energy demand and the absence of a long-term storage plan for nuclear waste are some of the reasons.
Georgia Power President and CEO Paul Bowers has said the utility will have to consider building more nuclear in the future. The company has made no commitments but said it would have to keep nuclear as an option for baseload generation.
Reporter Hannah Northey contributed.
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