Lawsuit: Department of Energy Hiding Risk of $8.33 Billion Taxpayer-Backed Loan Guarantee for Proposed Georgia Nuclear Reactors

/PRNewswire-/ -- U.S. taxpayers are being denied timely access to information that could be used to assess the risk to their pocketbooks posed by the controversial $8.33 billion federal loan guarantee for two proposed nuclear reactors at Southern Company's Plant Vogtle in Georgia, according to a lawsuit filed yesterday by the Southern Alliance for Clean Energy (SACE). Despite the fact that the President announced the Vogtle taxpayer-financed loan guarantee on February 16, 2010 amid much fanfare, all meaningful details of the deal have remained shrouded in secrecy.

In announcing its lawsuit against the U.S. Department of Energy (DOE), SACE was joined today by Taxpayers for Common Sense (TCS). Although not a party to the lawsuit, TCS shares similar concerns about the secrecy in the DOE loan guarantee program.

SACE filed the lawsuit because of DOE's failure to comply with a Freedom of Information Act (FOIA) request filed on March 25, 2010. Under FOIA, DOE was obliged to respond to the SACE request by April 22 - well in advance of when DOE and Southern finalized the loan guarantee deal on June 11, 2010. However, DOE released no documents to SACE until July 6, 2010. When DOE finally released a handful of documents relating to the Vogtle loan guarantees, they were heavily redacted, with all important details blacked out, including one that was censored 244 times with half a dozen pages nearly or entirely obscured. (To see one of the DOE-censored documents, go to http://www.cleanenergy.org/index.php?/Reports-and-Publications.html on the Web.)

The clear foot dragging and improper handling by DOE of the SACE FOIA request provide the latest proof of the validity of the criticisms set out in the July 12, 2010 U.S. Government Accountability Office report, "Further Actions Are Needed to Improve DOE's Ability to Evaluate and Implement the Loan Guarantee Program." (See http://www.gao.gov/products/GAO-10-627.) The GAO found that the program is inadequately planned and executed, lacks objective performance goals, and provides preferential treatment to nuclear loan guarantee applications over other types of applications.

Stephen Smith, executive director, Southern Alliance for Clean Energy, said: "This is too large a sum of taxpayer's money, being spent on too risky a project for there to be this much cover-up and secrecy. This is the first award of what could be tens of billions of dollars more in new federal subsidies for the nuclear industry - setting the precedent of hiding the financial ball from the public in round one is a bad start. We need openness and transparency. Obama's Department of Energy, Southern Company and the public power companies which are part of this cover-up need to set the record straight and tell the truth about what is going on here; that they are socializing the risk and privatizing the profits for big power companies."

Ryan Alexander, president, Taxpayers for Common Sense, said: "DOE is hiding critical information behind their back with the one hand while they have their other hand out asking for billions more in loan guarantees. They already have the authority to give out more than $18 billion for nuclear reactors and still have yet to provide any assurances that these projects are smart investments. In fact, all the evidence points to taxpayers losing big on reactors like the Vogtle project. This is unacceptable and DOE must come clean and start fully answering these information requests or lawmakers should stop the program."

Larry Sanders, acting director of the Turner Environmental Law Clinic at Emory University School of Law, and an attorney for SACE, said: "In the Freedom of Information Act, Congress provided citizens a right to timely access to federal agency records. In this case, Southern Company and its partners have been awarded loan guarantees that could end up costing the federal treasury billions of dollars. Yet, in violation of the law, DOE refuses to allow public scrutiny of this subsidy to the nuclear energy industry. With billions of taxpayer dollars on the line, SACE had no choice but to file this lawsuit to force DOE to disgorge records related to the Plant Vogtle loan guarantees."

The March 25, 2010 SACE FOIA request covered such items as: the Southern Company loan guarantee; related correspondence between DOE and Southern Nuclear Operating Company, Georgia Power Company, Oglethorpe Power Corporation, Municipal Authority of Georgia, and the City of Dalton, Georgia; environmental review records related to the loan guarantee request; any credit analysis conducted by DOE in relation to the loan guarantee; all records related to the general terms and conditions of the loan guarantee; and all records related to issuance of the loan guarantee.

Of the seven areas addressed in the SACE FOIA request, DOE has failed entirely to respond to five items. DOE's partial response to two items in the request yielded only five responsive documents, months after the FOIA deadline. Most documents responsive to SACE's request remain hidden from public view. Even where the tardy responses were provided, the documents were so highly redacted as to make them largely or entirely meaningless.

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