Company News

Obama to announce loan help for U.S. nuclear power

* $8.3 bln loan guarantee would help finance plant’s costs

* Two nuclear reactors could be in service in 2016, 2017

* Obama asks Congress to triple nuclear loan guarantee fund

WASHINGTON, Feb 15 (Reuters) - The Obama administration, advancing nuclear power use to help cut greenhouse gas emissions, will announce on Tuesday an $8.3 billion loan guarantee to help Southern Co SO.N build two reactors, a government official told Reuters.

The reactors are in line to be among the first nuclear generating facilities to win U.S. government approval in three decades.

The official said on Monday that President Barack Obama would announce the loan guarantee after he tours a jobs training center in Lanham, Maryland, where he will discuss new government investments to create energy jobs and develop a low carbon economy.

Energy Secretary Steven Chu will travel with the president when he makes the announcement, said the official, who was familiar with the loan guarantee deal for Southern, but did not want to be identified.

Obama, a Democrat, has tried to reach out to Republicans who are skeptical about aspects of his proposed energy proposals by emphasizing the role of nuclear power in the country’s future energy production.

The $8.3 billion loan guarantee would commit the federal government to paying a portion of the private loans Southern would take out for the project in case the company defaulted on those loans.

A spokesman for Southern said the loan guarantee would cover up to 70 percent of the company’s portion of the project’s costs. He said the company would provide more details on Tuesday.

Southern applied to the Nuclear Regulatory Commission in March 2008 to build two reactors at the company’s Vogtle nuclear power plant in Georgia, which already has two reactors. The Vogtle plant is about 170 miles (273 km) east of Atlanta.

Southern says it expects to receive license approval for the new reactors next year.


Supporters of nuclear power argue more reactors will be needed for the United States to tackle global warming effectively because nuclear is a much cleaner energy source than coal-fired power plants, which spew greenhouse gases.

Nuclear power is controversial, however, because of its radioactive waste, which is now stored on site at reactor locations around the country.

The two reactors, which some experts estimate will cost $8.8 billion to build, could be in service in 2016 and 2017.

The project would create 3,500 jobs during construction and 800 high-paying jobs when finished.

The government’s financial assistance for Southern comes from $18.5 billion in nuclear loan guarantee authorized by Congress. The department is expected to announce similar loan deals for other nuclear power plant projects in the future.

The Obama administration has also asked Congress to triple funding for the nuclear loan guarantee program to about $54 billion.

Nuclear power generates about 20 percent of U.S. electricity supplies.

The Vogtle power plant can currently produce 2,300 megawatts of electricity. The two new reactors would provide an additional 2,200 megawatts of electricity output. One megawatt provides power to about 500 homes in Georgia.

Southern’s Southern Nuclear Operating Co operates the Vogtle station for its owners, including Southern’s Georgia Power (45.7 percent), Oglethorpe Power Corp (30 percent), Municipal Electrical Authority of Georgia (22.7 percent) and the City of Dalton (1.6 percent). (Reporting by Tom Doggett, Additional reporting by Jeff Mason in Washington and Scott Disavino in New York; Editing by Peter Cooney)