In February, the $14.5 billion Vogtle project became the first new nuclear reactors in the U.S. to be awarded a loan guarantee by the Department of Energy. Under the loan guarantee program, the government pledges to cover a company's debt obligations
– By April Murelio –
According to a report in The Wall Street Journal, Southern Company is "on track" to meet today's deadline for accepting a conditional loan guarantee from the federal government for two new nuclear reactors at the Vogtle plant in Georgia, a Southern spokesman said.
"We are on track to meet the deadline and expect to have an agreement," Southern spokesman Jason Cuevas said earlier this week.
Southern Company's share of the guarantee would permit the company to borrow up to $3.4 billion. The company expects the new reactors to be completed in 2016 and 2017. Southern Company's partners in the Vogtle project, municipal electric utility MEAG Power and public power cooperative Oglethorpe Power, have already accepted their portions of the $8.3 billion loan guarantee.
Last February, the $14.5 billion Vogtle project launched the first new nuclear reactors in the U.S. to be awarded a loan guarantee by the Department of Energy. Under the loan guarantee program, the U.S. government pledges to cover debt obligations if a company defaults on loans used to finance a new nuclear power plant. Congress has appropriated a total of $18.5 billion for the nuclear loan guarantee program, but the Obama administration asked Congress to approve another $9 billion in may.
Southern Company was given 90 days to accept the guarantee, but the company was granted a 30-day extension in May. Southern Company has not disclosed why an extension was needed.
While the company can't draw on the loan guarantee until the Vogtle project gets a combined construction and operating license COL from the NRC, the company expects to get the COL license by the end of next year.
As a large, regulated electric utility with a strong balance sheet, Southern Compsany is likely to have a lower credit fee than some of the other companies trying to land nuclear loan guarantees. NRG Energy Inc. (NRG) and UniStar Nuclear Energy, a joint venture between Constellation Energy Group (CEG) and French energy giant EDF (EDF.FR), plan to develop new nuclear reactors on a "merchant" basis.