Experts: Energy Department Should 'Immediately Halt' Plans to Issue Taxpayer-Backed Loan Guarantees in Wake of Major NRC Safety Objection to Westinghouse Reactor Design

Thu Oct 22, 2009 1:30pm EDT

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Experts: Energy Department Should 'Immediately Halt' Plans to Issue
Taxpayer-Backed Loan Guarantees in Wake of Major NRC Safety Objection to
Westinghouse Reactor Design



NRC Action Further Underscores Seriousness of Multi-Billion Bailout Risk to
Taxpayers; Future of 14 of 25 Planned Reactors -- Including Those in NC, SC,
GA, FL, AL -- Now in Jeopardy Given AP1000 Safety Concerns


WASHINGTON, Oct. 22 /PRNewswire-USNewswire/ -- Not only does the Nuclear
Regulatory Commission's (NRC) objection last week to major problems in the
AP1000 reactor design call into serious question the future of over half of
proposed new reactors in the United States (14 of 25), it also means that it
would be "grossly imprudent" for the Department of Energy (DOE) to proceed
with its plans for loan guarantees for new reactors that are not finalized and
licensed. 


Four experts delivered that stern warning during a news conference today
urging the DOE to halt controversial plans to issue nuclear loan guarantees
"soon," according to Energy Secretary Chu. These guarantees are part of the
DOE's Title XVII Loan Guarantee Program. Two of the four new nuclear projects
that the DOE is reported to be considering for taxpayer-backed loan guarantees
are AP1000 designs proposed by the Southern Company at the Vogtle site in
Georgia and the South Carolina Electric & Gas (SCE&G) V.C. Summer site.   


The NRC has made it clear that there are grave doubts if the AP1000 nuclear
reactor structure can withstand hurricanes, earthquakes, tornadoes and other
external impacts, as required by the NRC's regulations. Late last week, the
NRC said that its "staff has informed Westinghouse that the company has not
demonstrated that certain structural components of the revised AP1000 shield
building can withstand design basis loads," and also stated that the
unsuccessful efforts to secure information had gone on for a year.  The NRC
announced:  "This is a situation where fundamental engineering standards will
have to be met before we can begin determining whether the shield building
meets the agency's requirements."    


Southern Alliance for Clean Energy (SACE) High Risk Program director, Sara
Barczak said: "What we are saying is very simple. This alarming situation --
in which one federal agency 'hand' does not seem to know what the other
federal agency 'hand' is doing -- needs to end. With billions of taxpayer
dollars at stake in the proposed nuclear loan guarantees, the Department of
Energy owes it to the public to get on the same page as the NRC about these
serious AP1000 reactor design problems. We believe that the DOE should assure
the public that utilities considering problematic nuclear reactor designs,
such as the AP1000, would not qualify for these loan guarantees. Otherwise the
DOE is ignoring the NRC warning and deliberately putting taxpayer dollars at
considerable risk."


Edwin Lyman, senior scientist, Global Security Program, Union of Concerned
Scientists (UCS) in Washington, D.C., a position he has held since May 2003,
said: "The NRC's rejection of the revised AP1000 shield building is a hopeful
sign that it is starting to recognize the major safety risks posed by novel
and untested reactor design features and manufacturing approaches.  The NRC
should not license any new reactor unless rigorous testing shows it meets the
highest safety and security standards.  Those in Congress who are pressuring
the NRC to accelerate its reactor licensing reviews need to be aware of the
potentially disastrous consequences of forcing regulators to do a rush job."


Former Nuclear Regulatory Commission (NRC) member Peter Bradford, an adjunct
professor at Vermont Law School and former chair of the New York and Maine
utility commissions, said: "The NRC's concerns about safety of the
Toshiba-Westinghouse AP1000 design are only the latest illustration of the
very high costs to which federal loan guarantees would expose U.S. taxpayers. 
Already in the last 18 months, more than half of the 25 nuclear reactors that
the industry has said constitute the "'nuclear renaissance' have been
canceled, or have been delayed by more than a year, or have experienced an
upward cost revision of more than a billion dollars. These delays are very
likely to increase the costs of the plants, turning some of them into economic
white elephants of the sort with which the nuclear industry already has
considerable experience.  In anticipation of such an outcome, the industry has
been seeking unprecedented federal loan guarantees to assure that the risks
associated with new reactors will this time be borne by taxpayers."


Henry D. Sokolski, executive director, Nonproliferation Policy Education
Center, and former resident fellow at the National Institute for Public
Policy, the Heritage Foundation and the Hoover Institution, said: "In 2003,
the Congressional Budget Office determined that 'well over half' of new
nuclear reactor projects would be likely to default, leaving taxpayers holding
the bag for billions upon billions of dollars. There's plenty of reason to
believe that this projection is all too relevant today.  The last time the
federal government pushed commercial-energy loan guarantees, it was for a
single synfuels project, which, after years of mismanagement and technical
difficulties, finally tanked, leaving the public with a bill for $13 billion.
Given the poor track record of nuclear reactor builders in meeting
construction schedules and budgets, and the unpredictability of the federally
backed financial schemes, Moody's notified U.S. utilities that it would reduce
their credit ratings if they went nuclear -  even if the utilities secured
federal loan guarantees. Recent news that the U.S. Nuclear Regulatory
Commission has rejected a revised version of the most popular new reactor
design, Westinghouse's AP1000, suggests just how risky this business can be." 


The NRC decision also has much wider implications for the so-called "nuclear
renaissance" in the United States, which has suffered a number of recent
setbacks.  AP1000 reactors have been proposed for a total of 14 reactors: 
Alabama (2 units at Bellefonte - originally 4); Georgia (2 at Vogtle); Florida
(2 in Levy County and 2 at Turkey Point); South Carolina (2 at V.C. Summer and
2 at William Lee); North Carolina (2 at Harris).  For more detail, see the NRC
map at http://www.nrc.gov/reactors/new-reactors/col/new-reactor-map.html.


On October 17, 2009, 10 local groups from states with proposed AP1000 reactors
called on the Energy Department to halt its loan guarantee process in the wake
of the NRC warning about AP1000 safety issues.  (View the statement at 
http://www.cleanenergy.org/images/position_statements/DOE%20loan%20guarantee%20letter%2010%2020%2009.pdf)


Eighteen groups from the four states with proposed new reactors in line for
$18.5 billion in loan guarantees also issued a statement calling the
guarantees a "risky venture lacking accountability" that must be halted.  The
groups wrote: "Given the lack of transparency, the risk involved and the poor
track record of the DOE with loan guarantees, issuance of the current loan
guarantees must be put on hold and no further loan guarantees should be
authorized by Congress." (View the statement at
http://www.cleanenergy.org/images/position_statements/Loan%20Guar%20Group%20Statement%2010%2017%2009.pdf)


ABOUT SACE


The Southern Alliance for Clean Energy promotes responsible energy choices
that create global warming solutions and ensure clean, safe and healthy
communities throughout the Southeast. Founded in 1985, SACE is the only
regional organization primarily focused on developing clean energy solutions
throughout the Southeast. For more information, go to
http://www.cleanenergy.org on the Web.


EDITOR'S NOTE:  A streaming audio replay of the SACE news event will be
available on the Web at http://www.cleanenergy.org as of 6 p.m. EDT on October
22, 2009.






SOURCE  Southern Alliance for Clean Energy, Savannah, GA and Asheville, NC

Leslie Anderson, +1-703-276-3256, landerson@hastingsgroup.com, for SACE
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