Loans encourage more power plants

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Bill Radke: Later this morning, President Obama is expected to announce the go-ahead for more than $8 billion in government loan guarantees to build two nuclear power plants in Georgia. These would be the nation’s first new reactors in decades. From Washington, Marketplace’s John Dimsdale has the story.

John Dimsdale: The government will guarantee the repayment of private bank loans to the Southern Company, which hopes to have licensing approval to start building two nuclear reactors in 2012. The industry hopes the government seal of approval will jumpstart new construction around the country.

Baltimore’s Constellation Energy is awaiting its own government loan guarantee. Mike Wallace is Constellation’s chief operating officer:

Mike Wallace: Getting a loan guarantee is absolutely critical to moving forward. Commercial banks simply will not lend the money when no nuclear plant’s been built in this country in 30 years.

But nuclear power skeptics, like Vermont Law School’s Mark Cooper, say if other investors won’t guarantee the loans, why should taxpayers?

Mark Cooper: It’s quite clear that the industry is unable to move forward in private markets, and the industry wants essentially a bailout — a commitment from taxpayers to guarantee very risky projects.

Congress has already approved $18 billion worth of loan guarantees for new nuclear plant construction. President Obama has asked for three times that amount in next year’s budget.

In Washington, I’m John Dimsdale for Marketplace.