The U.S. government, in a tangible sign of its effort to spur the development of nuclear energy production nationwide, Tuesday said it would guarantee $8.3 billion in loans to help finance construction of two new reactors at Georgia Power's Plant Vogtle in Burke County, near Augusta.
The guarantees, offered by the Department of Energy, should make lower-interest loans easier to obtain for the $14 billion expansion project, scheduled to begin operation in 2016. Under the program, the government would assume a company's debt if it were to default on a project.
Vogtle is the first project selected by the federal government for the loan guarantees. More are expected.
Georgia Power has a 45 percent stake in Vogtle, which has two existing units, and the utility can borrow up to $3.4 billion under the offer. The other owners are Oglethorpe Power Corporation, the Municipal Electric Authority of Georgia and Dalton Utilities. They will have access to the balance of the loan guarantees.
David Ratcliffe, CEO of Georgia Power parent, Southern Company, said that lower financing costs that will result will benefit the utility's customers.
Opponents contend that nuclear power development is too expensive and prone to cost overruns, that there is no plan in place for the permanent storage of spent nuclear fuel, and that the design proposed for Vogtle is flawed.
Sara Barczak, a program director with the Southern Alliance for Clean Energy, termed the loan guarantee program "handouts ... at the expense of the U.S. taxpayer."
Stephen Smith, executive director of SACE, said, "Taxpayers have been shocked by the big banks of Wall Street. Now, the big power companies are up in D.C. getting loan guarantees with a high risk of default."
Nuclear industry supporters say the loan guarantees, championed Tuesday by President Barack Obama, could help spark a renaissance in plant development that stalled three decades ago in the wake of the partial meltdown at Three Mile Island in Pennsylvania. Soaring construction costs and public concern over safety stymied further development.
Advocates say nuclear power offers a viable option as the nation seeks to diversify its fuel mix to include more environmentally-friendly power sources while reducing its dependence on other countries as suppliers.
Coal, the bulwark of American electric utilities, is a major contributor of carbon emissions, while nuclear is not.
Obama said that, "in order to truly harness our potential in clean energy ... we're going to have to build a new generation of safe, clean nuclear power plants in America."
Site preparation work at the Vogtle is under way. Southern Company said it expects to receive its construction and operating license from the Nuclear Regulatory Commission sometime next year.
Members of NuStart Energy consortium are:
DTE Energy, Detroit, MI, Duke Energy, Charlotte, NC, EDF International North America, Washington, D.C., Entergy Nuclear, Jackson, MS, Exelon Generation, Philadelphia, PA, Florida Power & Light Company, Juno Beach, FL, Progress Energy, Raleigh, NC, South Carolina Electric & Gas, Columbia, SC, Southern Company, Atlanta, GA, Tennessee Valley Authority, Knoxville, TN, GE-Hitachi Nuclear Energy, Wilmington, NC, Westinghouse Electric Co., Pittsburgh, PA