After President Obama announced back in February that his administration would provide $8.3 billion in taxpayer-financed loan guarantees to the Southern Company to build two new nuclear reactors at its Plant Vogtle in Georgia, the Southern Alliance for Clean Energy sought details about the deal under the Freedom of Information Act.
The watchdog group submitted a FOIA request to the Department of Energy on March 25, asking for details on the loan application, the offer the government made to the company, and any correspondence between the parties. Under FOIA, the DOE had until April 22 to respond -- but it missed the deadline by more than two months.
When DOE finally did release some documents to SACE on July 6, they were heavily redacted, with critical details blacked out. One document had a total of 244 redactions, with a half-dozen pages -- one of which is pictured above -- nearly or entirely obscured. DOE and Southern Company finalized the loan guarantee deal on June 11.
So yesterday SACE announced that it was suing the DOE for failure to comply with FOIA in a meaningful way.
"This is too large a sum of taxpayers' money, being spent on too risky a project for there to be this much cover-up and secrecy," said SACE Executive Director Stephen Smith. "This is the first award of what could be tens of billions of dollars more in new federal subsidies for the nuclear industry -- setting the precedent of hiding the financial ball from the public in round one is a bad start."
The loan guarantee program, created by the Energy Policy Act of 2005, authorizes DOE to use taxpayer money to back projects that "avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases" and "employ new or significantly improved technologies." The reactors being planned for Vogtle are Westinghouse AP1000s, a new design that's been having difficulty getting federal approval due to safety concerns.
DOE now has the authority to give out an estimated $77 billion in loan guarantees and wants to increase that amount. It's already asked Congress to OK an additional $9 billion in loan guarantees this year. There was speculation the money might be added to the Senate climate bill, but members went on summer recess without taking action on that legislation.
SACE opposes allocating more money to the troubled loan guarantee program. It points to a report issued last month by the Government Accountability Office that found the program is inadequately planned and executed, lacks objective performance goals and gives preferential treatment to nuclear projects.
The group has also raised concerns about the permitting process for the Vogtle reactors. In response to another SACE lawsuit, a judge in Georgia recently ruled that the state's Public Service Commission failed to detail why the plant's expansion is in the public interest, as required by law.
SACE's latest legal action over Vogtle targets DOE for missing the deadline to respond under FOIA. It asks the court to declare unlawful DOE's failure to respond to parts of the request, to order DOE to search for and produce any and all non-exempt requested items within five days, and produce a list of records being withheld under FOIA exemptions. It also seeks reimbursement for attorneys' fees and other litigation costs.
The lawsuit does not challenge the redactions, which SACE is appealing through an internal DOE process. Larry Sanders, an attorney for SACE and the acting director of the Turner Environmental Law Clinic at Emory Law school in Atlanta, acknowledged that there could be some sensitive business information or trade secrets that a company seeking loan guarantees would have a legitimate interest in protecting. But he said DOE went too far in its efforts to keep details about the deal out of public view.
"It's odd for this administration that prided itself on being the most transparent administration ever," said Sanders. "This is the opposite of transparent."
For a copy of SACE's complaint against DOE, click here.