AP: Southern Co. to get federal loan guarantees for nuclear reactors

By Kristi E. Swartz

The Atlanta Journal-Constitution

President Barack Obama is expected to announce next week that Atlanta-based Southern Co. will get federal loan guarantees -- the first in nearly 30 years -- to build two nuclear reactors in Burke, an administration official has told the Associated Press.

Southern Co's Georgia utility, Georgia Power, is planning two new reactors at its Plant Vogtle facility in Waynesboro, near Augusta.

They would be completed in 2016 and 2017, respectively, at a cost estimated at $14 billion. Georgia Power's share of the tab: $4.5 billion for the construction, plus $1.6 billion in financing charges, Georgia Power has said.

Citing a Wall Street Journal story, the Atlanta Journal-Constitution said last June that Southern was one of four companies in line to split $18.5 billion in federal government loan guarantees that would be used to build new nuclear power facilities.

Southern Nuclear spokeswoman Beth Thomas said at the time she could not confirm the report.

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.

While major climate change legislation was a top priority for the president, many have said a record snowfall in Washington and the ongoing concern for the struggling economy has dampened any chance of a bill passing in 2010.

While nuclear plants are planned elsewhere in the country, the proposed units at Vogtle could be the first new facilities built in the U.S. in decades.

Nuclear construction ground to a halt in the U.S. in the wake of the partial meltdown at Three Mile Island in Pennsylvania 30 years ago, and because of rising costs. Georgia Power's planned expansion has drawn opposition, although much of it appears to come from outside Waynesboro.

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.

AJC reporter David Markiewicz contributed to this story