The Municipal Electric Authority of Georgia, or MEAG, can transfer its 23 percent ownership stake in two new reactors at Plant Vogtle (VOH'-gohl) to three wholly owned firms created to facilitate project lending, under a recent decision from the U.S. Nuclear Regulatory Commission.
MEAG is seeking more than $2 billion in low-interest loans from the U.S. government to cover part of its share of costs to build one of the country's first brand-new nuclear plants in a generation. The two other major co-owners, Southern Co. subsidiary Georgia Power and Oglethorpe Power, have already struck deals with the U.S. Department of Energy to get $6.5 billion in government-backed lending.
MEAG has not yet reached a final deal with the government. A spokeswoman for the U.S. Department of Energy, Dawn Selak, declined to comment. MEAG officials did not return messages seeking comment.
A recent analysis from the U.S. Nuclear Regulatory Commission explains that MEAG requested the restructuring of its ownership stake in the nuclear plant to reduce lending risks for the government. The NRC does not control the loan program, but it does have final say on any changes to a nuclear plant's ownership.
MEAG issued three series of bonds to pay part of its share of building costs, estimated at roughly $4.2 billion in the company's last annual report. The bonds will be repaid with money from take-or-pay contracts between MEAG and large customers or groups of customers. The agreements generally require the customers buy a set amount of electricity at specified times. If the customer cannot use the electricity, it must still pay for it anyway.
To protect itself financially, the government can take over a borrower's ownership stake in the nuclear plant if the borrower fails to repay a loan. However, the NRC review shows that MEAG and federal officials had concerns that a failure of one MEAG customer to pay for its allotted electricity could endanger MEAG's stake in the plant and hurt other electric customers who do make their payments.
In a step meant to reduce that risk, MEAG will divide its ownership stake in the power plant among three wholly owned companies that serve the interests of each group of customers. Under that system, a failure of one customer to pay would not harm the other customers.
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