PRNewswire -- Southern Company Chairman, President and CEO David M. Ratcliffe on June 18 announced that the company's Georgia Power subsidiary has reached an agreement with the U.S. Department of Energy (DOE) to accept terms for a conditional commitment for loan guarantees.
"This will provide Georgia Power customers significant savings," said Georgia Power President and CEO Mike Garrett.
President Obama and DOE Secretary Steven Chu announced the award of the conditional loan guarantees to Georgia Power on February 16.
"This is another step forward on the road to nuclear power playing a prominent role in America's energy future," said Ratcliffe. "Nuclear energy is vital in any effort to make meaningful reductions in greenhouse gas emissions and meet this nation's rising demand for electricity. This conditional commitment is an endorsement of the company's performance as a safe, efficient nuclear operator with strong financial integrity."
The new units will be located at Plant Vogtle near Waynesboro, Ga., where the company already owns and operates two nuclear units. The conditional commitment is for loan guarantees that would apply to future borrowings related to the construction of Vogtle units 3 and 4.
Total guaranteed borrowings would not exceed 70 percent of the company's eligible projected costs, or approximately $3.4 billion, and are expected to be funded by the Federal Financing Bank. Any guaranteed borrowings would be full recourse to Georgia Power and secured by a first priority lien on the company's 45.7 percent ownership interest in the two new units.
Final approval and issuance of the loan guarantees are subject to receipt of the Combined Operating License from the U.S. Nuclear Regulatory Commission (NRC), completion of final agreements, the receipt of any other required regulatory approvals and satisfaction of other conditions. The company received an early site permit and limited work authorization from the NRC for the two additional units in 2009, and site work has begun.
The additions of units 3 and 4 are expected to produce approximately 3,500 jobs during construction and 800 permanent jobs once the units begin operation.
Along with Georgia Power's existing portion of the two 1,100-megawatt reactors, the remaining ownership is split among Oglethorpe Power Corporation, the Municipal Electric Authority of Georgia and Dalton Utilities. Georgia Power's share of the project cost is currently projected at approximately $6.1 billion, which includes approximately $1.7 billion of financing costs to be collected during construction.
The DOE loan guarantees are expected to save Georgia Power's customers millions in interest costs annually over the expected life of any guaranteed borrowings, based on preliminary estimates. The actual amount of the interest savings will depend upon the final terms and the timing of the specific borrowings and cannot be determined at this time.
Units 3 and 4 are expected to begin commercial operation in 2016 and 2017, respectively. Southern Nuclear, a subsidiary of Southern Company, will oversee the construction as well as operate the two new units for Georgia Power and the other owners. Southern Nuclear currently operates Plant Vogtle's two existing nuclear power units as well as Georgia Power's Plant Hatch nuclear facility near Baxley, Ga., and Alabama Power's Plant Farley nuclear facility near Dothan, Ala.
Georgia Power is the largest subsidiary of Southern Company. The company is an investor-owned, tax-paying utility with rates well below the national average. Georgia Power serves 2.3 million customers in all but four of Georgia's 159 counties.
With 4.4 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE:SO) is the premier energy company serving the Southeast. A leading U.S. producer of electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices below the national average. Southern Company is consistently listed among the top U.S. electric service providers in customer satisfaction by the American Customer Satisfaction Index (ACSI). Visit our Web site at www.southerncompany.com.
Cautionary Note Regarding Forward-Looking Statements:
Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the conditional commitment and DOE loan guarantees, estimated cost savings from DOE loan guarantees, and projected costs of construction and in service dates for Vogtle units 3 and 4. Southern Company and Georgia Power caution that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company and Georgia Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in the Annual Reports on Form 10-K of Southern Company and Georgia Power for the year ended December 31, 2009, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: timely receipt of necessary regulatory approvals related to the Plant Vogtle expansion, including Georgia Public Service Commission and NRC approvals; interest rate fluctuations and financial market conditions, including the credit ratings of Southern Company and Georgia Power; satisfaction of all conditions to the final issuance and approval of DOE loan guarantees, including negotiation of final agreements, continuing due diligence by the DOE and receipt of any required regulatory approvals; and the ability to control costs and avoid delays in the construction of Plant Vogtle units 3 and 4, including risks related to shortages and inconsistent quality of equipment, materials and labor, work stoppages, contractor or supplier non-performance under construction or other agreements, adverse weather conditions, unforeseen engineering problems, changes in project design or scope, environmental and geological conditions, and unanticipated cost increases. Southern Company and Georgia Power expressly disclaim any obligation to update any forward-looking information.
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Showing posts with label DOE. Show all posts
Showing posts with label DOE. Show all posts
Monday, June 21, 2010
Friday, May 7, 2010
Groups: Negative Court Ruling in Georgia Throws DOE's Nuclear Loan Guarantee Bailout Program Into Question
/PRNewswire/ -- The only taxpayer-backed loan guarantee bailout to be offered for new nuclear reactors - $8.3 billion for two reactors at Plant Vogtle in Georgia - should be rescinded now that the project was dealt a setback in a decision by a Georgia judge that state officials illegally certified the project, according to the Southern Alliance for Clean Energy (SACE) and Public Citizen.
The groups also noted that, despite the push in Congress for more controversial loan guarantees for new nuclear reactors, the other two leading contenders for such bailouts - the South Texas Project at Bay City on the Gulf Coast (114 miles from San Antonio and 90 miles from Houston) and Calvert Cliffs in Maryland - are more unsettled than ever and now pose an even greater risk to U.S. taxpayers.
As such, the groups also said that Department of Energy (DOE) should refrain from offering any new loan guarantees to nuclear projects before overhauling its evaluation process.
DOE has stated that the $10 billion remaining in loan guarantee authority is only sufficient for one of the two projects and has requested another $9 billion in the appropriations supplemental to cover the second project. In its FY2011 budget request, the Obama Administration has already requested $36 billion in loan guarantee authority, a tripling of the nuclear loan guarantee program.
The groups detailed the setbacks at the Georgia project and other two federal bailout candidates as follows:
VOGTLE
Last Friday, the Southern Alliance for Clean Energy won its lawsuit in Fulton County Superior Court that aimed to protect Georgians from unfair utility costs in connection with the proposed construction of two new nuclear reactors at Vogtle near Waynesboro, Georgia. The Court found that the Georgia Public Service Commission acted illegally in violation of Georgia state law. The Commission's approval last year during the certification process for the proposed new Vogtle reactors was put into question.
At Friday's hearing, Judge Wendy Shoob heard SACE's allegation that the Georgia Public Service Commission (PSC) erred as a matter of law by failing to make findings of fact and conclusions of law as required. Specifically, the group alleged that the PSC did not provide the required written justifications for its findings that would "afford an intelligent review" by the courts. The PSC instead relied on statements void of any reasoning. The Court ruled in favor of SACE and found that the PSC acted illegally in violation of Georgia state law by failing to make all appropriate findings and to support those findings with a concise and explicit statement of the facts. Just prior to the decision, Southern Company had yet to accept the conditional guarantee and had requested another month to decide. On Wednesday, the Court issued the final order, remanding the case back to the PSC. (See http://www.cleanenergy.org/images/testimony/FinalOrderPetitionforJudicialRevie w050510.pdf for more information.)
Stephen Smith, executive director of the Southern Alliance for Clean Energy, said: "This ruling raises further concerns over the Obama Administration's controversial decision in February to award an $8.3 billion taxpayer-financed conditional loan guarantee for Southern Company's proposed Vogtle project, the first to be offered one in the country. Given this decision and the economic risks to U.S. taxpayers of this project, DOE should rescind its offer of a loan guarantee. DOE needs to re-evaluate its 'due-diligence' procedures before offering any other loan guarantees. For example, how can a loan guarantee be offered before a reactor design is even certified as safe by the Nuclear Regulatory Commission?"
SOUTH TEXAS PROJECT
The estimated cost for two NRG proposed reactors in Texas has risen from $5.8 billion in 2006 to a reported $18.2 billion at the end of 2009. As a result, the City of San Antonio pulled out of 85 percent of its investment in the project, leaving a void of as much as 33 percent of the project without investors.
Karen Hadden, executive director of the Sustainable Energy and Economic Development (SEED) coalition, said: "The South Texas nuclear reactor is an economic disaster waiting to happen. The costs have trebled since the plant was proposed, NRG's credit is just one notch above a junk bond rating, NRG's partner sued them for fraud and no one wants to buy shares due to the fast-rising costs. The federal government may foolishly put taxpayer money behind the South Texas Project, but it can't force anyone to buy the resulting overpriced power. Since Texas is deregulated, this plant will have to sell excess energy into the market. Expensive nuclear power must compete against cheaper and plentiful efficiency, wind and natural gas. As a result, the power it produces won't be too cheap to meter -- instead it will be too expensive to sell. If we give this turkey loan guarantees -- taxpayers will get stuck with the bill."
CALVERT CLIFFS
In 2007, the cost estimate for the proposed new reactor at Calvert Cliffs was $5 billion. Since then, UniStar has been reluctant to provide any public cost estimates for construction of the proposed Calvert Cliffs-3 reactor, but in August 2008 hearings before the Maryland Public Service Commission, CEO George Vanderheyden acknowledged that the company's estimates are on the "upper end" of the $4,500 - $6,000 per kilowatt (kWh) level. For a 1600 megawatt reactor such as Calvert Cliffs-3, that would mean construction costs of about $9.6 billion. Even that high figure is likely to be low, since the Pennsylvania utility PPL has posted an estimate of $13-15 billion for precisely the same reactor design at Bell Bend in PA.
Additionally, the original drive for Calvert Cliffs preceded the recent decline in demand for power in the region. Power purchase agreements have yet to be established for Calvert Cliffs. Though "demand for power" does not need to be demonstrated by the reactor owner, demand for power in the region has dropped off due to the market downturn, obviating most or all of the need for Calvert Cliffs.
Allison Fisher, organizer for Public Citizen's Energy Program, Public Citizen said: "Taxpayers should be outraged that they are being put on the hook for a reactor design that has been plagued with huge delays and cost overrun. The same reactor is currently under construction in Finland and France. Both projects have been plagued with delays and cost overruns. The Finnish project is three and a half years behind schedule with a 75 percent cost overrun thus far."
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The groups also noted that, despite the push in Congress for more controversial loan guarantees for new nuclear reactors, the other two leading contenders for such bailouts - the South Texas Project at Bay City on the Gulf Coast (114 miles from San Antonio and 90 miles from Houston) and Calvert Cliffs in Maryland - are more unsettled than ever and now pose an even greater risk to U.S. taxpayers.
As such, the groups also said that Department of Energy (DOE) should refrain from offering any new loan guarantees to nuclear projects before overhauling its evaluation process.
DOE has stated that the $10 billion remaining in loan guarantee authority is only sufficient for one of the two projects and has requested another $9 billion in the appropriations supplemental to cover the second project. In its FY2011 budget request, the Obama Administration has already requested $36 billion in loan guarantee authority, a tripling of the nuclear loan guarantee program.
The groups detailed the setbacks at the Georgia project and other two federal bailout candidates as follows:
VOGTLE
Last Friday, the Southern Alliance for Clean Energy won its lawsuit in Fulton County Superior Court that aimed to protect Georgians from unfair utility costs in connection with the proposed construction of two new nuclear reactors at Vogtle near Waynesboro, Georgia. The Court found that the Georgia Public Service Commission acted illegally in violation of Georgia state law. The Commission's approval last year during the certification process for the proposed new Vogtle reactors was put into question.
At Friday's hearing, Judge Wendy Shoob heard SACE's allegation that the Georgia Public Service Commission (PSC) erred as a matter of law by failing to make findings of fact and conclusions of law as required. Specifically, the group alleged that the PSC did not provide the required written justifications for its findings that would "afford an intelligent review" by the courts. The PSC instead relied on statements void of any reasoning. The Court ruled in favor of SACE and found that the PSC acted illegally in violation of Georgia state law by failing to make all appropriate findings and to support those findings with a concise and explicit statement of the facts. Just prior to the decision, Southern Company had yet to accept the conditional guarantee and had requested another month to decide. On Wednesday, the Court issued the final order, remanding the case back to the PSC. (See http://www.cleanenergy.org/images/testimony/FinalOrderPetitionforJudicialRevie w050510.pdf for more information.)
Stephen Smith, executive director of the Southern Alliance for Clean Energy, said: "This ruling raises further concerns over the Obama Administration's controversial decision in February to award an $8.3 billion taxpayer-financed conditional loan guarantee for Southern Company's proposed Vogtle project, the first to be offered one in the country. Given this decision and the economic risks to U.S. taxpayers of this project, DOE should rescind its offer of a loan guarantee. DOE needs to re-evaluate its 'due-diligence' procedures before offering any other loan guarantees. For example, how can a loan guarantee be offered before a reactor design is even certified as safe by the Nuclear Regulatory Commission?"
SOUTH TEXAS PROJECT
The estimated cost for two NRG proposed reactors in Texas has risen from $5.8 billion in 2006 to a reported $18.2 billion at the end of 2009. As a result, the City of San Antonio pulled out of 85 percent of its investment in the project, leaving a void of as much as 33 percent of the project without investors.
Karen Hadden, executive director of the Sustainable Energy and Economic Development (SEED) coalition, said: "The South Texas nuclear reactor is an economic disaster waiting to happen. The costs have trebled since the plant was proposed, NRG's credit is just one notch above a junk bond rating, NRG's partner sued them for fraud and no one wants to buy shares due to the fast-rising costs. The federal government may foolishly put taxpayer money behind the South Texas Project, but it can't force anyone to buy the resulting overpriced power. Since Texas is deregulated, this plant will have to sell excess energy into the market. Expensive nuclear power must compete against cheaper and plentiful efficiency, wind and natural gas. As a result, the power it produces won't be too cheap to meter -- instead it will be too expensive to sell. If we give this turkey loan guarantees -- taxpayers will get stuck with the bill."
CALVERT CLIFFS
In 2007, the cost estimate for the proposed new reactor at Calvert Cliffs was $5 billion. Since then, UniStar has been reluctant to provide any public cost estimates for construction of the proposed Calvert Cliffs-3 reactor, but in August 2008 hearings before the Maryland Public Service Commission, CEO George Vanderheyden acknowledged that the company's estimates are on the "upper end" of the $4,500 - $6,000 per kilowatt (kWh) level. For a 1600 megawatt reactor such as Calvert Cliffs-3, that would mean construction costs of about $9.6 billion. Even that high figure is likely to be low, since the Pennsylvania utility PPL has posted an estimate of $13-15 billion for precisely the same reactor design at Bell Bend in PA.
Additionally, the original drive for Calvert Cliffs preceded the recent decline in demand for power in the region. Power purchase agreements have yet to be established for Calvert Cliffs. Though "demand for power" does not need to be demonstrated by the reactor owner, demand for power in the region has dropped off due to the market downturn, obviating most or all of the need for Calvert Cliffs.
Allison Fisher, organizer for Public Citizen's Energy Program, Public Citizen said: "Taxpayers should be outraged that they are being put on the hook for a reactor design that has been plagued with huge delays and cost overrun. The same reactor is currently under construction in Finland and France. Both projects have been plagued with delays and cost overruns. The Finnish project is three and a half years behind schedule with a 75 percent cost overrun thus far."
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Tuesday, April 27, 2010
Energy Efficiency in Southeast to Get Huge Boost, Thanks to $20 Million U.S. DOE Award to SEEA Regional Alliance
/PRNewswire/ -- Energy Efficiency in the Southeastern United States will get a huge boost when the Southeast Energy Efficiency Alliance (SEEA) rolls out its program of innovative, large-scale building retrofits for homeowners and businesses under its recently-announced $20 million award from the U.S. Department of Energy's (DOE) Retrofit Ramp-Up initiative.
The regional organization will partner with nearly a dozen communities of varying sizes and characteristics, each of which will use a different approach to increase the energy efficiency of small and large residential, commercial and public buildings. This diversity will allow SEEA to test and evaluate a variety of models in both smaller, more rural and larger, more metropolitan areas and make adjustments as needed. Another key aspect of the program, which will use a combined formula allocation and a pay-for-performance strategy to fund specific projects, will be the availability of affordable, accessible financing programs.
"This large infusion of funding from DOE into the Southeast provides an unprecedented opportunity to promote energy efficiency and innovation while also creating jobs in this tough economy," said SEEA Executive Director Ben Taube. "SEEA is looking forward to working with our various community partners across the region as we go forward and transform the market."
The Southeast Community Retrofit Ramp-up Consortium will partner with cities in eight southeastern states - Alabama, Florida, Georgia, North Carolina, Louisiana, South Carolina, Tennessee, Virginia - and with the U.S. Virgin Islands to dramatically increase the effectiveness of building retrofits across the region. SEEA's community partners include Huntsville, Ala., Celebration, Fla.; Jacksonville, Fla.; Atlanta, Ga.; Decatur, Ga.; New Orleans, La.; Carrboro, N.C.; Chapel Hill, N.C.; Charlotte, N.C.; Charleston, S.C.; Nashville, Tenn., Woodbury, Tenn.; Albemarle County, Va.; Charlottesville, Va.; and Hampton Roads Planning District, Va.
"News of the DOE award comes at a great time for us, as Charlottesville and the County of Albemarle have worked hard to help support our community-based local energy alliance program (LEAP), an energy efficiency program for residents and businesses," said Charlottesville Mayor David Norris. "We look forward to the economic stimulus and job creation energy efficiency can bring our community - as well as dollar savings for the utility bill payer."
"We are delighted to be a part of the SEEA coalition. Energy efficiency and water conservation are priorities for the City of Atlanta," said Atlanta Mayor Kasim Reed. "This program will allow us to meaningfully deliver programs to help our residents and business owners reduce their energy and water use."
SEEA's community partners have been planning and organizing for this opportunity since February 2009, when SEEA challenged cities to make extraordinary commitments to energy efficiency programming and infrastructure with a $500,000 competitive solicitation and award. Fifteen communities from six states tendered applications, based on hundreds of hours of partnership-building, meetings, planning, research and negotiations with utilities and city councils.
"SEEA is pleased to be the organizer of the consortium of communities and an active leader in making the Southeast more energy efficient," said SEEA Board Chair Kate Offringa, president and CEO of the North American Insulation Manufacturers Association (NAIMA). "This initiative will help the region overcome some of the barriers that have prevented energy efficiency from really taking hold in the Southeast - namely lack of financing and the need for a program structure that addresses the uniqueness of the region."
SEEA intends to start this program in early June. More information on the SEEA program can be found at http://www.seealliance.org/programs/cities.php.
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The regional organization will partner with nearly a dozen communities of varying sizes and characteristics, each of which will use a different approach to increase the energy efficiency of small and large residential, commercial and public buildings. This diversity will allow SEEA to test and evaluate a variety of models in both smaller, more rural and larger, more metropolitan areas and make adjustments as needed. Another key aspect of the program, which will use a combined formula allocation and a pay-for-performance strategy to fund specific projects, will be the availability of affordable, accessible financing programs.
"This large infusion of funding from DOE into the Southeast provides an unprecedented opportunity to promote energy efficiency and innovation while also creating jobs in this tough economy," said SEEA Executive Director Ben Taube. "SEEA is looking forward to working with our various community partners across the region as we go forward and transform the market."
The Southeast Community Retrofit Ramp-up Consortium will partner with cities in eight southeastern states - Alabama, Florida, Georgia, North Carolina, Louisiana, South Carolina, Tennessee, Virginia - and with the U.S. Virgin Islands to dramatically increase the effectiveness of building retrofits across the region. SEEA's community partners include Huntsville, Ala., Celebration, Fla.; Jacksonville, Fla.; Atlanta, Ga.; Decatur, Ga.; New Orleans, La.; Carrboro, N.C.; Chapel Hill, N.C.; Charlotte, N.C.; Charleston, S.C.; Nashville, Tenn., Woodbury, Tenn.; Albemarle County, Va.; Charlottesville, Va.; and Hampton Roads Planning District, Va.
"News of the DOE award comes at a great time for us, as Charlottesville and the County of Albemarle have worked hard to help support our community-based local energy alliance program (LEAP), an energy efficiency program for residents and businesses," said Charlottesville Mayor David Norris. "We look forward to the economic stimulus and job creation energy efficiency can bring our community - as well as dollar savings for the utility bill payer."
"We are delighted to be a part of the SEEA coalition. Energy efficiency and water conservation are priorities for the City of Atlanta," said Atlanta Mayor Kasim Reed. "This program will allow us to meaningfully deliver programs to help our residents and business owners reduce their energy and water use."
SEEA's community partners have been planning and organizing for this opportunity since February 2009, when SEEA challenged cities to make extraordinary commitments to energy efficiency programming and infrastructure with a $500,000 competitive solicitation and award. Fifteen communities from six states tendered applications, based on hundreds of hours of partnership-building, meetings, planning, research and negotiations with utilities and city councils.
"SEEA is pleased to be the organizer of the consortium of communities and an active leader in making the Southeast more energy efficient," said SEEA Board Chair Kate Offringa, president and CEO of the North American Insulation Manufacturers Association (NAIMA). "This initiative will help the region overcome some of the barriers that have prevented energy efficiency from really taking hold in the Southeast - namely lack of financing and the need for a program structure that addresses the uniqueness of the region."
SEEA intends to start this program in early June. More information on the SEEA program can be found at http://www.seealliance.org/programs/cities.php.
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