President Barack Obama today will announce the loan guarantees for the construction and operation of two new nuclear reactors in Georgia, the first new nuclear power plant to break ground in the United States for nearly three decades.
An administration official said late Monday that the loan guarantees will apply to work at the Southern Co. plant in Burke, where Georgia Power is planning the new reactors at its Plant Vogtle facility.Southern Co. estimates the project will create 3,000 onsite construction jobs and about 850 permanent positions.
The new reactors would be completed by 2017 at an estimated cost of $14 billion. The Atlanta Journal-Constitution and the Wall Street Journal reported last June that Southern was one of four companies in line to split $18.5 billion in federal loan guarantees for new nuclear power facilities.
The Associated Press first reported the Obama administration’s intentions last week.
An Obama official, however, confirmed the news to the AJC on Monday, saying the president would travel to Lanham, Md., today, where he will tour a training center that includes applications for clean energy and low-carbon technologies, including the construction of nuclear plants. Secretary of Energy Steven Chu will join the president on the tour.
The Energy Policy Act of 2005 authorized the Department of Energy to issue loan guarantees for certain new projects, including nuclear expansion. But no loan guarantees have been issued for nuclear projects, and Chu has sought to quicken the pace of the program. Obama has included more than $54 billion in loan guarantees for nuclear plants in his fiscal year 2011 budget proposal.
The Obama administration is pushing for utilities to build more nuclear power plants as part of a nationwide effort to curb greenhouse gas emissions. The president mentioned nuclear power and clean coal, along with renewable energy sources such as wind and solar, in his State of the Union address.
The stakes at Vogtle are considerable for all parties involved. First, there is the matter of cost for Georgia Power’s 2.3 million customers statewide, about half of whom live in metro Atlanta.
To fund the project, they will pay 9 percent more on their electric bills. That increase will be phased in over seven years, starting in 2011. It will last the life of the plant, but is expected to gradually decline over that time, the company said.
Many utilities have talked about building nuclear reactors, but few have committed to doing so.
Opponents to nuclear power have two main concerns: cost and where to put the waste.
For its part, Georgia Power suffered from huge cost overruns when it built the first two nuclear plants at Vogtle in the late 1980s. The original estimate was $975 million for four reactors. The final price tag was $9 billion for two reactors.
Federal subsidies such as these loan guarantees, as well as insurance are in place, however, in an attempt to calm investor nerves.
Staff writers Kristi Swartz and David Markiewicz contributed.