Obama to roll out first nuclear plant loan guarantee next week

President Obama will next week announce a federal loan guarantee for utility giant Southern Company to build two new nuclear reactors in Georgia, an administration official said.

The Energy Department loan guarantee will be the first devoted to nuclear plant construction under a program authorized in a 2005 energy law. 

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The $8.3 billion award comes as the White House is emphasizing its support for construction of the first new U.S. reactors in decades, and calling on Congress to ramp up funding for the nuclear plant loan program.

“As his record demonstrates, the President has long believed that nuclear power should be part of our energy mix – that’s why he has advocated for comprehensive energy and climate legislation that leverages all of our energy sources, including nuclear, to transition to a clean energy economy and create millions of jobs,” the administration official said. 

Southern Company hopes to add two reactors to its existing two-unit nuclear plant in Burke County, near Augusta. The project would be the first new plant to break ground in decades, the administration official noted.

Southern Co. and a slew of other power companies are seeking Nuclear Regulatory Commission licenses to build new reactors, but the industry is counting on wider federal financing.

The NRC has already received applications to build nearly 30 new reactors from companies such as Duke Energy and Florida Power & Light.

The award to Southern Co. will come from $18.5 billion worth of Energy Department loan guarantee funding available for nuclear plants.

The White House fiscal year 2011 budget request seeks an additional $36 billion worth of loan guarantees for nuclear plants.

President Obama has been emphasizing his support for nuclear power in seeking support from Republicans and centrist Democrats for a broad climate and energy bill that would also impose limits on greenhouse gas emissions.

The administration official, citing Southern Co. estimates, said the Georgia project would create roughly 3,000 onsite construction jobs and about 850 permanent jobs operating the plant. 

Southern Co. hopes to receive an NRC license next year to build and operate the new reactors, and plans to bring them online in 2016 and 2017.

A major 2005 energy law authorized the Energy Departmet to award loan guarantees for various types of low-emissions energy projects, but the program was slow to get off the ground.

The Obama administration began awarding the first guarantees under the program last year, starting with California-based solar panel manufacturer Solyndra, Inc. But the planned award to Southern Co. will be the first issued under the program for nuclear plants.