Sept. 23 (Bloomberg) -- 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., 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.
House Republicans 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 refinancing that put the U.S. behind new investors to keep the company going.
All government loan-guarantee programs may be the subject of an investigation by the House Oversight and Government Reform Committee, Representative Darrell Issa, the panel’s chairman and a California Republican, said on Sept. 20.
The Energy 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 to the same level of rigorous scrutiny as we are now insisting the solar loan-guarantee program undergo,” Markey said in a statement.
Fallout from the collapse of Solyndra after getting a loan guarantee isn’t likely to affect Southern’s federal backing, Steve Higginbottom, a company spokesman, said in a phone interview.
Southern, the largest U.S. utility by market value, plans to make a financing commitment to the Energy Department after it obtains final federal licensing approval early next year to build the reactors, Higginbottom said.
The Energy Department would have a first claim on Southern’s new reactors and wouldn’t take a back seat to other lenders, Higginbottom said, refuting Markey’s comments.
“Our exceptional financial strength and 30-year history of operating nuclear plants makes Southern Company a solid, credit-worthy candidate” for a guarantee, Higginbottom said.
Southern’s $14 billion expansion at Vogtle is the largest of 23 power-generation projects the federal government has pledged to assist, with total project costs of almost $41 billion, according to the Energy Department’s website.
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