Obama announces $8B in loan guarantees to build first US nuclear power plant in 30 years

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Obama announces loan guarantees for nuke plant

LANHAM, Md. — President Barack Obama is making roughly $8 billion in federal loan guarantees available to help build the first U.S. nuclear power plant in three decades.

Discussing a plant envisioned for Burke County, Ga., Obama told a union audience Tuesday that the initiative will create thousands of construction jobs and 800 permanent jobs. He called it “only the beginning” of efforts to develop “safe, clean” energy-efficient technologies.

Obama has been arguing that the country must develop cleaner energy technologies and modernize the means by which it powers itself. At the same time, he has said that policymakers must not conclude they have to choose between a cleaner environment and sufficient energy supplies to meet demand.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

WASHINGTON (AP) — President Barack Obama is highlighting a new investment in energy jobs with an announcement that the government will guarantee more than $8 billion in loans needed to build the first U.S. nuclear power plant in nearly three decades.

Having Obama make the announcement also underscores the political weight the White House is putting behind the effort to use nuclear power and other alternative energy sources to reduce U.S. dependence on foreign oil and other fossil fuels, and create jobs at home.

Energy has served as a major plank of the president’s domestic agenda, but his focus on building a green energy economy has broadened in the past month to include nuclear power, offshore oil drilling and development of clean-coal technology, all energy sources championed by Republicans. The shift came after Republican Scott Brown won a special election in Massachusetts to replace the late Democratic Sen. Edward M. Kennedy, depriving Democrats of the votes needed to keep Senate Republicans from blocking their agenda.

Republicans like Sen. Lindsey Graham welcome the shift, but some pro-nuclear Republicans remain nervous about the heart of the Obama-backed climate bill — a plan to limit heat-trapping pollution, which will raise energy costs.

Obama was to make remarks Tuesday after touring a job training center at the headquarters of Local 26 of the International Brotherhood of Electrical Workers in nearby Lanham, Maryland. The union represents electrical and telecommunications workers, and it offers training useful for energy jobs, including the construction of nuclear power plants.

Obama was expected to announce a total of $8.3 billion in federal loan guarantees to build and operate a pair of reactors in Burke County, Georgia, by Southern Co., an administration official said Monday. The official spoke on condition of anonymity ahead of Obama’s announcement.

Federal loan guarantees are seen as essential to spurring construction of new reactors because of the huge expense. Critics say the guarantees are a form of subsidy that will put taxpayers at risk given the industry’s record of cost overruns and loan defaults.

The reactors, to be built by the Atlanta-based energy company, are part of a White House plan the administration hopes will win Republican support at a time when the public is expressing a desire for lawmakers to work together to solve problems.

But construction of the reactors — and the jobs the project is expected to create — are years away.

Southern Co.’s application for a license to build and operate the reactors is pending with the Nuclear Regulatory Commission, one of 13 such applications the agency is considering. The earliest any could be approved would be late 2011 or early 2012, an NRC spokesman said.

Southern Co. says the Georgia project would create about 3,000 construction jobs, while the new reactors would generate power for about 1.4 million people and permanently employ 850 people.

Obama called for “a new generation of safe, clean nuclear power plants” in his State of the Union address last month, and followed that by proposing to triple new federal loan guarantees for new nuclear plants. The president’s budget proposal for 2011 would add $36 billion in new federal loan guarantees to $18.5 billion already budgeted but not spent — for a total of $54.5 billion.

That sum is enough to help build six or seven new nuclear plants, which can cost at least $8 billion apiece.

Rising costs, safety issues and opposition from environmentalists have kept utility companies from building new nuclear power plants since the early 1980s. The 104 nuclear reactors currently operating in 31 states provide about one-fifth of U.S. electricity.