Energy Dept. nears approval of $8.3B nuke loan, setting up clash in Congress

Energy Secretary Steven Chu said Monday he expects to finalize an $8.3 billion taxpayer-backed loan for two new nuclear reactors in Georgia, setting up another battle on Capitol Hill over the government’s investments in energy projects.

The Energy Department offered the loan guarantee to Southern Co. in February 2010, but finalization of the deal was conditioned on a number of key regulatory approvals.

Chu signaled Monday that the loan guarantee is nearing final approval, less than a week after the Nuclear Regulatory Commission (NRC) greenlighted the license for the project.

“We expect that one to close and go forward,” Chu told reporters Monday afternoon, but cautioned that “there are a number of other milestones” the project must achieve before getting the final OK from the Energy Department.

NRC’s decision last week to approve the license for the project — allowing construction and conditional operation of two reactors at the existing Vogtle power plant near Waynesboro, Ga. — marked a major milestone for the nuclear industry. It’s the first time the commission has approved construction of new reactors since 1978.

But the project faces major resistance from some Democrats in Congress, who are hoping to use Republicans’ eagerness to probe the $535 million loan guarantee to failed solar firm Solyndra against them.

Rep. Edward Markey (R-Mass.), a senior member of the House Energy and Commerce Committee, criticized Republicans Monday for not objecting to the pending nuclear loan guarantee, which is more than 15 times larger than the one given to Solyndra in 2009.

“The Republican push for a loan guarantee for a nuclear reactor project exponentially riskier than Solyndra proves that their interests are not in financial stewardship but in political game playing,” Markey said.

Markey, in a letter Monday, pressed Chu not to finalize the nuclear loan guarantee until the Energy Department makes improvements to its loan program recommended in a White House-mandated report released last week.

The report — conducted by Herb Allison, the former Treasury Department official who oversaw the Troubled Asset Relief Program — calls for several steps to improve oversight of the loan program, but also provides lower estimates of taxpayer risk than an earlier federal forecast.

“Given the massive taxpayer debt to be assumed and the extraordinary risk associated with the Vogtle project, we should not act on final approval of the Southern Company loan guarantee unless all of the improvements recommended in the Allison report have been put in place to reduce the likelihood of a multi-billion dollar taxpayer bailout,” Markey said.

Republicans have hit the administration hard on Solyndra’s September bankruptcy, alleging that the decision to grant the company a loan guarantee was influenced by politics and raising broader questions about the administration’s green energy investments.

They have spent almost a year investigating the Solyndra loan guarantee, issued two subpoenas for White House and Obama administration documents and held a string of hearings.

But GOP lawmakers have yet to take aim at the nuclear loan guarantee.

House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), a supporter of nuclear power, praised the NRC’s decision to approve the new nuclear license last week.

“Breaking ground on the two reactors will signify that we are taking a positive first step toward a nuclear renaissance," he said.