Nyse Order Imbalance 291333.0 Shares On Buy Side

By Avi Salzman

The top federal official in charge of giving loans to nuclear plants had some harsh words this week for nuclear industry officials who want the government to invest more taxpayer funds into building reactors.

"At a certain point, it's just greedy," said Julie Kozeracki, the acting chief investment officer for President Donald Trump's Office of Energy Dominance Financing.

Kozeracki was speaking in front of hundreds of nuclear industry CEOs and financiers on a panel at the Nuclear Energy Institute's finance conference in New York on Tuesday. She told them the industry needs to stop asking for new funding streams from the government and start building reactors. "The tools are there, and it's time to deliver," she said.

Trump has called for the U.S. to start construction on 10 large nuclear reactors by 2030, to produce enough electricity to meet growing American energy demands, including the power needed by artificial intelligence data centers. That goal is likely to cost well over $100 billion, almost all of it paid by private companies.

As of yet, no reactors are under construction.

One reason that industry officials say that reactors are not being built is that developers don't want to take the risk that the project will go way over budget and end up costing ratepayers and investors.

The last nuclear project in the U.S. consisted of two reactors in Georgia owned by publicly traded utility Southern Company, and it has become a cautionary tale. When construction started in 2009, the reactors were expected to cost $14 billion and be complete by 2016 and 2017. They finally came online in 2023 and 2024, and cost more than $30 billion. Electricity customers in Georgia are paying off much of that cost overrun in their monthly bills.

Since then, no other utilities have been willing to take the risk of building reactors, despite efforts by both the Biden and Trump administrations to ease the process. Some utilities have said they're unlikely to move forward without more assurances.

"We're also going to have to have overrun protection from the federal government or others to be able to protect our customers and our investors from any overruns on these projects," said Harry Sideris, the CEO of Duke Energy, on an earnings call last year. Duke Energy owns one of the largest nuclear fleets in the country, and has begun to take modest steps toward expanding it, starting in the 2030s.

The Nuclear Energy Institute, an industry group, has been advocating for federal cost-overrun insurance that would pay nuclear developers back if their projects went way over budget. Sen. Jim Risch, a Republican from Idaho, introduced a bill in 2024 that would do just that, but it failed to advance. John Kotek, a vice president at the Nuclear Energy Institute, says the bill can "mitigate potential construction cost overruns" and "enhance confidence and stability for investors, helping subsequent projects move more efficiently from design to operation."

Kozeracki, the Energy Department official, said in her comments at the conference that she believes the government has already provided a financial framework that essentially acts as cost overrun insurance.

Trump's tax bill that passed last year extended subsidies that were introduced in Biden's Inflation Reduction Act in 2022, giving nuclear developers tax credits for constructing or operating plants. Under the right circumstances, a developer could receive credits for as much as 50% of the project value. Kozeracki called it a "buy one reactor, get one free" deal.

Kozeracki's department, which was formerly called the Loan Programs Office, also has other tools to help developers. She oversees more than $250 billion in funds meant for loans to energy projects. Under Biden, much of that money went to renewable energy, though some also was dedicated to nuclear projects. Energy Secretary Chris Wright has cut the renewable funding but reiterated his support for nuclear projects. Already, money has begun to flow to some nuclear projects, including the restart of a reactor in Michigan.

At the conference, Kozeracki said that her office can finance up to 80% of the eligible costs of a project at interest rates that are much better than a developer could get on the private market. The loan's duration can be as long as 30 years.

Those two programs essentially act as cost overrun insurance, she argued, because they give developers like utilities financial cushions on their projects.

"We just have to believe that we can do hard things," she said. "I think the tools are there. The government has put an unprecedented level of focus and priority on this, and I think it just takes a level of courage and creativity and commitment from the partners we've just named and the tools we already have on the table."

Some industry executives at the conference disagreed with Kozeracki, though they did not want to do so publicly, so as not to upset the administration. Many of the government tax credits she mentioned are difficult to claim for logistical reasons, one said after the speech.

One panelist on stage with Kozeracki said that the fact that no reactors are being built is a sign that the current financial incentives aren't enough.

"This is the greatest capitalist system in the history of mankind," said Mike Scott, founder of private-equity firm Pelican Energy Partners. "We have so many greedy people who want to make money, and if they could make money today building a nuclear plant, they'd be doing it."

Nuclear investors also say there's confusion within the industry about the Trump administration's other plans for nuclear development, which could conflict with investment made by private entities. The Commerce Department announced a partnership in October with nuclear designer Westinghouse to build new nuclear plants as part of a trade deal with Japan. "As part of the partnership, at least $80 billion of nuclear reactors will be constructed using Westinghouse technology," Westinghouse said. Japan is expected to spend $550 billion on U.S.-related investments as part of the deal, which resulted in lower tariffs for Japan.

The U.S. federal government would own the reactors and utilities would operate them, according to a person familiar with the deal. An investment committee with U.S. and Japanese officials is meeting to decide on projects, and President Trump will have the final say, the person said. Announcements could come "in the next few weeks," they added.

Uncertainty about the Japan deal has caused private sector investors to "pause," said Allen Otto, a managing director at Guggenheim Securities, who was also on stage with Kozeracki. "I think there's a moment now where we needs to quickly hopefully have clarity on what that either is or isn't," he said.

The next move for the nuclear industry will almost certainly depend on the government — one way or another.

Write to Avi Salzman at avi.salzman@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.