Southern Co. will get the Energy Department's first conditional loan guarantee for new nuclear reactors, sources familiar with the matter confirmed today.
DOE plans to announce tomorrow the loan guarantee, which would provide financial backup for two new reactors at Southern's Vogtle site near Augusta, Ga., the sources said. The Vogtle reactors would be the first new U.S. nuclear units to be licensed and built in about 30 years.
Southern's partners in the project include Oglethorpe Power Corp. and Municipal Electric Authority of Georgia.
Southern estimates the two new reactors will cost $14.5 billion. Under the loan guarantee program, the government may guarantee up to 80 percent of a nuclear project's cost, but the recipient must pay a percentage as a "credit subsidy" fee set by DOE and the Office of Management and Budget. The size of the credit subsidy fee has been the focus of squabbles among the government, industry and advocacy groups.
Details of the loan guarantee are still being finalized today, an industry source said.
DOE previously stated it will only grant conditional loan guarantees for nuclear projects contingent on their obtaining an operating and construction license from the Nuclear Regulatory Commission. Southern has already received an early site permit to begin limited construction and expects to receive a license in 2011, according to the company. It estimates the first new reactor will open in 2016 and the second in 2017.
The expected DOE announcement is likely to be heralded by pro-nuclear lawmakers who have criticized the department for being too slow to use $18.5 billion in loan guarantee authority granted it by the 2005 energy bill.
The announcement would be the latest in a series of moves by the Obama administration to show support for nuclear power. Last month, the White House announced members of a commission to study alternatives to managing nuclear waste and tripled available loan guarantee authority for nuclear projects to $54 billion in its proposed 2011 fiscal budget.
Critics of the loan guarantee program called the award another industry "bailout."
"The last thing Americans want is another government bailout for a failing industry, but that's exactly what they're getting from the Obama administration," said Ben Schreiber, an analyst for Friends of the Earth, in a statement.
Michael Mariotte, executive director of Nuclear Information and Resource Service, said the loan program is a subsidy for nuclear power.
"This would be a repudiation of Obama's own campaign statements against subsidies for nuclear power, and the implementation of the worst energy policy excesses of the Bush administration and failed presidential candidate Senator John McCain," Mariotte said.
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