But Davidson, who recommended that then-Energy Secretary Ernest Moniz sign off on the first Vogtle guarantee, said the Vogtle loan has been a “good loan” from a banker’s perspective and from that of the agency. While the project is over budget, the loan is secure and being repaid, he said.
Given the increased safety and efficiency of the AP1000 reactors being built under the project and the willingness of a utility to get rate-based approval to fund it, “it was certainly something that was important for the federal government to support” and would not be deployed at the Vogtle site without the Loan Program Office, Davidson said.
While the United States must determine whether to pursue nuclear power in light of significant cost overruns related to permitting, labor quality and who ultimately pays for ballooning costs, those questions are outside of the Loan Program Office’s purview, said Davidson.
The program has experienced a pause in new disbursements before. While the Loan Program Office’s ability to make loan guarantees for new energy technologies was born out of the bipartisan 2005 Energy Policy Act, it fell victim to partisan disagreements over whether the office’s programs should exist -- especially with the collapse of loan recipient Solyndra LLC.
The matter contributed to a suspension in new loans issued under the program in President Barack Obama’s second term in office, as did the departure of the office’s former Executive Director Jonathan Silver at the end of Obama’s first term and the conclusion of a project deadline for when renewable energy projects had to end under a stimulus package, Davidson said.
Even during the Obama administration, there was a period with concern about the political or actual risk of issuing further loan guarantees, said the House Science staffer.
Opponents of the program say the initiative lends itself to cronyism and risky spending of tax dollars, said Tubb, who said the private sector should be left to this kind of financing. “The motivations are very different if you’re spending other people’s money” for political ends, she said.
Across each of its three budget requests, the Trump administration has requested that Congress scrap the office’s two loan programs -- the Title 17 program and the Advanced Technology Vehicles Manufacturing Loan Program -- and have the office simply monitor its existing portfolio of projects.
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