U.S. Economic/Financial News

TVA Will Build Another Nuclear Plant

Aug. 18 (EIRNS)—In a unanimous vote this afternoon, the Board of Directors of the Tennessee Valley Authority approved the building of its third nuclear plant in the past ten years. The Browns Ferry plant went on line in 2007, and the Watts Bar nuclear plant will start operations in 2013. It was decided today that construction at the Bellefonte site will begin when Watts Bar is completed, and it is projected to start producing power between 2018-2020.

In a region where labor unions, local businesses, churches, and civic organizations overwhelmingly support nuclear power, TVA nonetheless found itself up against a well-organized, well-financed opposition to completing the Bellefonte plant. The anti-human foot soldiers of the Southern Alliance for Clean Energy have protested at TVA offices, released a bogus report on supposed technical problems at the Bellefonte site, and then tried to disrupt today's Board meeting. Local police kept them out. Standard & Poor's-downgraded TVA's credit ten days ago. TVA directors mounted a counter-offensive, holding press briefings, giving a tour of Bellefonte to elected officials last week, and writing op-eds in papers, including the New York Times.

When construction on the Bellefonte plant was stopped in the 1980s, it was more than 80% complete. Some of the hardware that is at the plant will be replaced to ensure Bellefonte is outfitted with the latest technology, so about 50% of what is currently there will be used. The existing site contains nearly $2 billion worth of in-place infrastructure, which, as was pointed out, ratepayers have already paid for. TVA estimates it will take close to $5 billion more to bring Bellefonte in to operation.

Obama's Green Jobs Program Is a Bust

Aug. 17 (EIRNS)—While Obama will reportedly announce a jobs program after returning from his vacation in September, the following two stories are indicative of what Obama can be expected to deliver.

Last year, Seattle Mayor Mike McGinn announced that the city had won a $20 million Federal grant to invest in weatherization. The goals were to create 2,000 living-wage jobs in the city, and to retrofit 2,000 homes in poorer neighborhoods.

But more than a year later, as of last week, only three homes had been retrofitted, and just 14 new jobs created by the program. And a number of the 14 jobs are administrative. Of the 337 homeowners who had applied for the program, only 14 had gotten a loan, or were in the process of getting one.

This week, Evergreen Solar Inc., once a darling of the U.S. solar power industry, filed for bankruptcy protection. The average price of solar modules has fallen 30% this year, after declining steeply last year. Earlier this year, Evergreen closed its Massachusetts factory, a $450 million facility that opened in 2007 with support from state and local subsidies and employed about 800 workers. What happened?

Evergreen began to manufacture panels in Wuhan, China last year. Other U.S.-based solar companies have already moved their production overseas: Sun Power Corp. to the Philippines; First Solar Inc. to Malaysia. In its Chapter 11 filing, Evergreen cited the difficulty in competing against Chinese solar companies and blamed reductions in European subsidies for solar installations.

The company plans to close its facility in Midland, Mich., in the near future. It also plans to lay off 83 workers in Massachusetts and Michigan, retaining 50 employees to help with the bankruptcy and reorganization. The company plans to reorganize operations with an emphasis on building up its China-based manufacturing facility.

Said one wag, globalization fosters sunshine patriots.

Localities Told To Raise User-Rates To Protect Credit Ratings

Aug. 16 (EIRNS)—Thousands of U.S. localities, utilities, teaching, medical, recreation, transportation and all kinds of entities are under acute pressure from credit "watches" and worse, to make them impose exhorbitant user-fees and service unpayable, unworthy debts, on threat of losing their credit ratings. The case of Birmingham, Ala. provides an example.

In Birmingham (Jefferson County), monthly sewer rates, which have tripled in 10 years, are now under debate to be raised yet more, in order to pay JP Morgan Chase's demands. Morgan Chase is the principal bondholder of some $3.1 billion in debt, associated with a sewer treatment system upgrade, for which JP Morgan ensnared Jefferson County in wrongful, complex interest rate "management" debt deals (swaps, credit default insurance, etc.). JP Morgan, which has paid fines and forfeitures for wrongdoing—though not admitting culpability—amounting to close to $700 million, still is insisting on extracting more money from 126,000 residents, in order to settle past debt.

Last week, Birmingham demonstrators held signs: Send JP Morgan Down the Sewer, Not the People!

The median income in Birmingham is $31,704, a third less than similar-sized cities. The average sewer (not water, which is separate) bill is over $37 a month. The debt-mongers want an 8% a year increase in a householder's sewer bill for the next three years, and continued increases thereafter.

Gov. Robert Bentley has intervened to further delay a decision on Jefferson County's sewer debt situation, until September. More and more County Commissioners want to declare Chapter 9 government bankruptcy, and tell the banks to go to hell.