Beyond Nuclear Denounces President Obama's Decision to Transfer Financial and Safety Risks of New Reactors to US Taxpayers

Beyond Nuclear
today denounced President Obama's granting of a conditional loan guarantee to
Southern Nuclear Operating Company for the construction of new atomic reactors
at its Vogtle Nuclear Power Plant site in Waynesboro, Georgia. Two new
Westinghouse-Toshiba Advanced Passive (AP) 1000 reactors are proposed at Plant
Vogtle. President Obama's award comes despite an announcement by the U.S.
Nuclear Regulatory Commission (NRC) in October of a major safety flaw with the
AP1000 design.

An NRC
media release dated October 15, 2009 documents that the AP1000 shield
building, as currently designed, is vulnerable to severe weather such as tornadoes
and hurricanes, and natural disasters like earthquakes. This raises the concern
that the design is also vulnerable to terrorist attacks such as intentionally
crashing airliners. Thus, the shield building's intended protection of the
reactor's primary radioactivity containment is questionable, as is its ability
to provide radiation shielding during normal operations as well as to support a
large emergency cooling water supply tank.

"It is utterly irresponsible of
President Obama to risk public safety and the environment by financing the
incomplete and flawed AP1000 design at Vogtle and, worse still, at taxpayers'
financial risk," said Kevin Kamps of Beyond Nuclear. "Even if ultimately fixed,
the AP1000's major design flaw risks delays in construction and cost overruns, the
same problems that delivered death blows to scores of atomic reactors three
decades ago."

The Congressional Budget Office has
predicted that over half of new reactor owners will default on their loan
repayments. The federal nuclear loan guarantees would finance up to 80% of the
total project cost for a new reactor. Cost estimates for certain proposed new
reactors in the U.S. have already surpassed $10 billion. The two new reactors
at Vogtle are currently estimated by proponents to cost $14.5 billion, a figure
expected by critics to significantly increase.

"Making
federal atomic reactor loan guarantees
conditional upon a Nuclear Regulatory
Commission license won't protect U.S. taxpayers," Kamps said. "The nuclear industry
has a long history of defaulting on loans in the
post-licensing period due to design flaws, construction mistakes, cost
overruns, lengthy delays, and other problems that President Obama and Energy
Secretary Chu cannot foresee, stumbling blocks which are not eliminated by NRC
granting a construction and operating license," Kamps added.

In the past, 21 atomic reactors were
cancelled during construction, 22 were cancelled after receiving a license but
before construction began, and 1 was even cancelled after construction had been
completed.

President Obama's award of billions
of dollars in taxpayer-backed loan guarantees to Southern Nuclear is intended
to resurrect the nuclear power industry, after a 36 year hiatus in the building
of new atomic reactors in the U.S. This loan guarantee is the first to be
disbursed from an $18.5 billion atomic reactor loan guarantee fund appropriated
by Congress, and approved by President George W. Bush, at Christmas, 2007. The
nuclear loan guarantee program was first authorized by the Energy Policy Act of
2005.

BACKGROUND

Due to Toshiba-Westinghouse's
proposed seventeenth revision, the AP1000 design cannot receive final NRC
approval until a year from now, at the earliest. In addition, the Vogtle Units
3 and 4 combined Construction and Operating License Application (COLA) itself cannot
receive NRC approval until mid-2011, at the earliest.

The two reactors currently operating
at Vogtle were originally predicted to cost only $660 million to construct, but
the price tag ultimately skyrocketed to $8.87 billion, a 13-fold or more than
1,000% cost overrun.

Earlier this year, DOE's short list
for nuclear loan guarantees was revealed by media reports to also include:
Constellation Energy and Electricite de France, which propose a French Areva
"Evolutionary Power Reactor" (EPR) at Calvert Cliffs, Maryland; NRG Energy and
CPS Energy, which propose a Toshiba-Westinghouse "Advanced Boiling Water
Reactor" (ABWR) at the South Texas Project nuclear plant near Bay City, Texas;
and SCANA Corp. and South Carolina Electric and Gas, which propose an AP1000 at
the Summer nuclear power plant in South Carolina.

Nuclear safety regulators in France, Finland,
and the U.K.
have recently questioned the safety of the EPR design. A nearly 75% cost
overrun, and three year construction schedule delay, have resulted from 3,000
documented design and construction flaws at an EPR being built at Olkiluoto, Finland.

NRG and CPS are now battling in
court over a $4-5 billion cost escalation in the price tag for the two ABWRs
proposed at South Texas Project.

Thus, each of the new reactors under
consideration by DOE for the initial nuclear loan guarantee awards is plagued
by safety flaws, incomplete designs, skyrocketing costs, and/or construction delays.
More information about this can be found at: https://www.psr.org/nuclear-bailout/.