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There is a big difference between a Production Tax Credit and a federal loan guarantee. The PTC is obtained whenever power is produced, for the period the PTC is in effect.



Pete does want you people to know that Vogtle project will also earn PTC when it starts producing power. The same as renewables. I wonder why Pete wants to keep that a secret?

DOE zeroed out millions in fees for the Vogtle loan guarantee. Pete does not want people to know about those subsidies.

All new nuclear project had the same offer for PTC if they signed up for the loan guarantee.

With regard to the DOE loan guarantee program Pete thinks the government is not on the hook to pay $12 billion if Southern Company defaults. That is garbage, when Solyndra, A123, and Fisker had loan guarantees. When the defaulted the checks came from the U.S. Treasury, with no private lenders involved. The companies wrote their payments, including interest, to the Treasury, not to private lenders. That’s how it will work for Vogtle project.

For more info on loan guarantees here is what tax experts said in 2014 about the Vogtle loan guarantee:

The credit subsidy cost is an estimate of the long-term cost to the federal government of guaranteeing a loan for the entire period the loan is outstanding. It includes the costs of covering interest subsidies, loan defaults, and loan delinquencies, but not administrative costs. The size of the credit subsidy cost corresponds to the size and riskiness of the loan.

Here’s the thing: a credit subsidy cost of $0 suggests that the loans and the project they’re financing have zero risk. But if this were true, then they wouldn’t need federal loan guarantees, because private financing would be available. It’s a Catch-22.

There is risk. Independent firms have downgraded the credit rating of each of the Vogtle partners over the course of the construction project, precisely because of its riskiness. Georgia Power and Oglethorpe took the deal because borrowing at market rates that factor in the risk would’ve cost more. Georgia Power alone saved more than $200 million in financing costs.



P.S. - If the borrower pays off the loans, the lender gets paid in full with a profit. If the borrower defaults, the government, which guaranteed the loans, makes the lenders whole. The taxpayers assume the cost of the default but get nothing if the loan is repaid. Loan guarantees guarantee that Wall Street wins under any circumstance. Loan guarantees stink.
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