Matt Wald at the New York Times published an article titled Nuclear Opponents Invoke Solyndra that alerted me to a new tactic by the forces arrayed against the beneficial use of nuclear energy in the battle against hydrocarbon addiction and climate change. The new meme is a smear on nuclear energy by falsely attempting to classify the two new reactors at Plant Vogtle as similar to the ill fated Solyndra project.
The opponents have no flipping idea just how different the two situation are.
The first difference that needs to be stated as clearly as possible is that the US government has not put a single dime at risk to enable construction at Plant Vogtle. Despite the fanfare with which the loan guarantee program was announced and the fanfare surrounding the selection of Southern Company for an $8.3 billion portion of the $18.5 billion that was authorized for the program by the Energy Policy Act of 2005 the Department of Energy and Southern Co have never agreed to terms and conditions.
All of the resources for the project have come from the plant owners and vendors; some of that money has been borrowed in the commercial lending market at the favorable rates that well-capitalized companies with good business models and sales can obtain.
Unlike Solyndra, Southern Company is a large, long-established public company with a business model that is accepted by traditional investors. It builds and operates reliable, electricity generating equipment, transmission and distribution systems. It sells that exceedingly valuable product to an established base of customers who have regulators that protect their interests, which means both keeping rates reasonable and ensuring that the supplier is adequately compensated so that it can focus on providing the best possible service.
In other words, Southern Company is not a financially stressed, high political profile start-up developing a risky new technology for an uncertain market that is seeking funding wherever it can find it. It is a solid company full of practically minded business people and technologists that is building an improved, licensed version of a well-proven technology. The large nuclear power plants Southern and SCANA are building will be able to predictably produce large quantities of high quality electricity – their product is clean, dependable and vital to essentially all other parts of our industrial economy. Southern does not need the DOE’s money and does not need to subjugate its decision processes to the electoral whims of the federal government.
At a negotiating table for a financing transaction, parties that do not need the money or the other benefits associated with “getting the deal done” often walk away with the most advantageous deal. Southern’s negotiators apparently recognize the strength of their hand and have played it well so far.
On a personal note, I have been enjoying watching my investment in SCANA, a company that has always made it clear that it intended to move forward with its nuclear plant construction project without federal financial assistance (or intervention in the business portion of their decision process).