According to an Obama administration official, the financial commitment will be made for the construction and operation of the two new reactors at a Southern Company plant in Burke, Georgia.
The company serves 4.4m customers across the southeast with a fleet including coal, hydroelectric and nuclear energy. “We’re still in a negotiation process,”’ said Valerie Hendrickson, Southern spokeswoman.
Southern was among four companies named last year as being considered to share $18.5bn in federal loan guarantees to build new nuclear power facilities.
Southern’s two planned units, which will cost $14bn, are due to be completed in 2016 and 2017.
The loan guarantees will underscore the White House’s commitment to nuclear energy as it seeks to pass comprehensive climate change legislation through Congress. In his first State of the Union address last month, Mr Obama said it was time to build a “new generation of safe, clean nuclear power plants in this country” in creating “clean energy jobs” and more efficient energy.
“This is just one step in a process to ensure that nuclear remains a key part of our energy mix,” the administration official said. There were no details on the value of the loan guarantees, but the official noted the White House’s 2011 budget had tripled loan guarantees for nuclear power plants to more than $54bn.
The Energy Policy Act of 2005, which passed under the Bush administration, authorised the Department of Energy to issue loan guarantees for projects that avoided, reduced or sequestered greenhouse gas emissions. But no new nuclear loan guarantees have been issued since that time.
A White House official said one of Energy Secretary Steven Chu’s top priorities was to expedite the process of allocating $18.5bn in existing loan guarantee authority. But Mr Obama’s planned move does not mean ground will be moving on the plants any time soon.
A spokesman for the Senate committee on Energy and Natural Resources, who said he was not aware of Mr Obama’s plans, said that while the loan guarantees would be a “big step forward” that the company would still have to go through a complex regulatory approval process before it got started.
The Department of Energy has encouraged the nuclear power industry to build itself up, providing incentives to apply for licenses to build new plants. The US’ 103 nuclear power plants are so old they are being forced to get 20-year extensions on their 40-year operating licenses. Even though they provide 20 per cent of the nation’s energy, no provisions have been made to replace supply once the plants can no longer function.
US utilities have been hesitant to commit to new nuclear investments, given a bureaucratic application process, high costs and public resistance following the US’ worst commercial nuclear accident, at Pennsylvania’s Three Mile Island plant in 1979.
The announcement is likely to reignite debate across the US over nuclear power.
A White House official said the company expected the deal to create 3,000 onsite construction jobs, and about 850 permanent jobs.
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