March 22, 2019 / 6:36 PM / 6 months ago

UPDATE 1-U.S finalizes $3.7 bln loan for Vogtle nuclear power plant

(Adds details, background, quotes from energy secretary)

By Timothy Gardner

WASHINGTON, March 22 (Reuters) - The U.S. Energy Department on Friday finalized up to $3.7 billion in loan guarantees to finance the construction of two reactors at the delayed Vogtle nuclear power plant in Georgia, tapping a program zeroed out in President Donald Trump's latest budget.

The financing for Vogtle, the first new nuclear power plant to be licensed and begin construction in the United States in more than three decades, was first announced in 2017. The decision brings the federal government's total in loan guarantees for Vogtle to $12 billion, some of which was provided in 2014 and 2015, during the administration of President Barack Obama.

Up to $1.67 billion will go to Georgia Power Co, a subsidiary of Southern Co; up to $1.6 billion will go to Oglethorpe Power Corp; and up to $415 million will go to three subsidiaries of the Municipal Electric Authority of Georgia.

"This is the real new green deal, that's what we're looking at here folks," Energy Secretary Rick Perry told workers and politicians at a ceremony at the plant. Perry was apparently referencing the Green New Deal, a non-binding resolution in Congress introduced by Democrats that aims to spark ways to cut greenhouse gas emissions and boost investments in renewable energy, but leaves the door open for nuclear power.

Perry conceded that the U.S. nuclear industry has suffered recent challenges, but declared that nuclear power was back and said the world would be looking to the United States for nuclear technology and workers for the supply chain.

U.S. nuclear power has struggled amid rising costs for safety upgrades and in the face of competition from solar and wind power and plants that burn cheap and abundant natural gas. In 2017 utilities abandoned two unfinished reactors called V.C. Summer in South Carolina that were once hailed as the start of a U.S. nuclear power renaissance.

The reactors at Vogtle are years behind schedule, and the construction cost has soared to $20 billion or more.

Trump's budgets, including the one submitted earlier this month to Congress, have called for axing the Department of Energy's loan guarantee program that has supported numerous renewable energy and energy efficiency projects. But the previous requests never became law and this one has less of a chance with the takeover of the House of Representatives by Democrats in last year's elections.

Critics of subsidies slammed the loan guarantees, saying that taxpayers would foot the bill if Vogtle fails. (Reporting by Timothy Gardner; Editing by Leslie Adler)

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