U.S. offers Vogtle nuclear plant $3.7 billion in loan guarantees

WASHINGTON (Reuters) - The U.S. Department of Energy (DOE) said on Friday it has offered an additional loan guarantee of up to $3.7 billion to companies building two nuclear reactors at the Vogtle plant in the state of Georgia.

The conditional loan guarantees were in the amounts of $1.67 billion to Georgia Power Company, a subsidiary of Southern Co, $1.6 billion to Oglethorpe Power Corp [OGPWR.UL] and $415 million to three subsidiaries of the Municipal Electric Authority of Georgia.

U.S. Energy Secretary Rick Perry, who has remarked he wants to make nuclear power “cool again,” said in a statement that the “future of nuclear energy in the United States is bright” and that he looks forward to “expanding American leadership in innovative nuclear technologies.”

U.S. nuclear power has been struggling in the face of competing power plants that burn plentiful, low-cost natural gas and stagnant electricity demand.

The 2011 Fukushima disaster in Japan has also dimmed interest in nuclear power. The Vogtle project is the first new U.S. nuclear power plant to be built since the Three Mile Island accident in 1979.

And billions of dollars in cost overruns at Vogtle helped push its main contractor, Westinghouse Electric Co LLC, a subsidiary of Toshiba Corp of Japan, into bankruptcy in March.

Vogtle and V.C. Summer, a similar double reactor project in South Carolina, were approved a decade ago, and were seen then as helping to launch a U.S. nuclear renaissance.

The projects, using AP1000 reactors, were designed and being built by Pittsburg-based Westinghouse.

In July, the V.C. Summer project was killed by its owners SCANA Corp and state utility Santee Cooper.

The DOE has already guaranteed $8.3 billion in loans to the companies to support construction of Vogtle reactors. Vogtle had initially been expected to begin generating power in 2016, but now the reactors are expected to be completed around the end of 2022.

Reporting by Timothy Gardner; Editing by Meredith Mazzilli