DOE focuses on 4 companies for nuclear loan help

May 15, 2009

Associated Press Writer
Chicago Tribune

WASHINGTON - The Energy Department has narrowed its list of the most likely recipients of $18.5 billion in government loan guarantees for building the first new nuclear power plants.

The department recently informed four companies planning new reactors in Maryland, Georgia, South Carolina and Texas that their applications have been elevated for closer scrutiny, department and industry officials said Friday.

Energy Department spokeswoman Stephanie Mueller said the applications were singled out for closer review because they are furthest along in obtaining a license from the Nuclear Regulatory Commission. She said the department has made no decision on who will get the loan guarantees "and has not eliminated any applications."

The proposed projects singled out for "due diligence" review, often the final phase of the review process, are: Constellation Energy for a reactor at its Calvert Cliffs nuclear plant near Lusby, Md.; NRG Energy for two new reactors at its South Texas Project near Bay City, Texas; Southern Company for two new reactors at its Vogtle power plant near Waynesboro, Ga.; and South Carolina Electric & Gas, for two new reactors at its V.C. Summer power plant near Columbia, S.C.

Last October, the department received 19 applications from 17 electric power companies seeking a total of $122 billion in loan guarantees to build new reactors, far more than the $18.5 billion Congress has provided in loan guarantee authority for nuclear power plants.

It's not clear how the department plans to divide the loan guarantees or how many projects will end up being approved.

With the cost of a new nuclear power plant now at more than $9 billion and credit markets reluctant to commit to such projects in the current economic climate, utilities have virtually ruled out construction of a new plant without government loan guarantees.

On Friday, John Rowe, chairman of Chicago-based Exelon Corp., which operates 17 nuclear reactors, told reporters after a speech at the National Press Club that he had no intention of proceeding with the construction of two new reactors near Victoria, Texas, without government loan guarantees.

Meanwhile, Energy Secretary Steven Chu announced Friday that the department will provide $2.4 billion from the economic recovery package to speed up development of technology to reduce greenhouse gas emissions from power plants and factories that burn coal.

Chu told a meeting of the National Coal Council on Friday that it's essential that ways are found to capture carbon dioxide from coal-burning power plants and industrial sources. Carbon dioxide from burning fossil fuels is the leading greenhouse gas blamed for global warming.

Chu assured the group that coal must remain part of America's energy mix for the foreseeable future. But he said even if U.S. coal use were eliminated, as some environmentalists have urged, "China and India will not turn their backs on coal, so we have to find a way to use this energy in a clean way."

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