Issuance of Vogtle loan guarantees

Thursday, 20 February 2014

The US government has finalized loan guarantees totalling some $6.5 billion for the construction of two AP1000 units at the Vogtle site in Georgia. US energy secretary Ernest Moniz was today due to formally issue the guarantees.

Work on Vogtle 4's nuclear island is progressing (Image: Georgia Power)

In February 2010, Vogtle units 3 and 4 became the first new nuclear power plant construction projects to be offered conditional loan guarantees by the US Department of Energy (DoE). The DoE offered one loan guarantee of $3.46 billion to Southern Co subsidiary Georgia Power, which has a 45.7% interest in the two new units, a second one of $3.07 billion covers Oglethorpe Power's 30% share of the project, while a third of $1.8 billion covers Municipal Electric Authority of Georgia's (MEAG's) 22.7% share. The City of Dalton holds the remaining 1.6% share in the new plant.

Loan guarantees

DoE loan guarantees have been offered in various areas as well as nuclear to encourage the commercial use of new or significantly improved energy technologies. The federally-backed guarantees are intended to help would-be builders raise private finance at no cost to the taxpayer; indeed the recipients are charged a fee for the guarantee. The loan guarantees would cover up to 80% of the projected costs of financing the construction of new units.

US energy secretary Ernest Moniz has confirmed that those conditional loan guarantees have now been finalized and that he intended to visit the Vogtle construction site today to issue them. The guarantees will be funded by the Federal Financing Bank. Final approval and issuance of the loan guarantees was subject to regulatory approvals and conditions, including the power companies' acceptance of the fees associated with them.

The DoE noted that it "continues to work on the remaining conditional commitment for a $1.8 billion loan guarantee to MEAG."

Moniz commented, "The construction of new nuclear power facilities like this one - which will provide carbon-free electricity to well over a million American energy consumers - is not only a major milestone in the Administration's commitment to jumpstart the US nuclear power industry, it is also an important part of our all-of-the-above approach to American energy as we move toward a low-carbon energy future."

Construction underway

Construction officially began on Vogtle 3 last March, with the pouring of the concrete basemat for the unit. Work on unit 4 started in November. Unit 3 is expected to start operation in late 2017 with unit 4 following a year later.

Two AP1000 units are also under construction at the VC Summer plant in South Carolina, operated by South Carolina Electric & Gas (SCE&G), a subsidiary of Scana Corporation, and co-owned by SCE&G and Santee Cooper. SCE&G and Santee Cooper have been shortlisted to receive a loan guarantee for the new Summer units. 

Researched and written
by World Nuclear News