(Updates with confirmation from source, additional details and background throughout.)
By Christine Buurma and Mark Peters
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Duke Energy Corp. (DUK) and France's Areva S.A. (CEI.FR) will announce plans Thursday to build a 1,650-megawatt nuclear power plant in southern Ohio, according to a person familiar with the matter.
The proposed plant would be built on federally owned land in Piketon that houses a former uranium enrichment facility owned by USEC Inc. (USU). Spokespeople for Duke and Areva wouldn't confirm the plans, first reported by The Plain Dealer newspaper of Cleveland on its Web site Tuesday. Ohio Gov. Ted Strickland and other state politicians, along with Duke and Areva, are expected to announce the plans during a press conference at 10 a.m. EDT on Thursday.
The nuclear power plant at Piketon, if approved by federal regulators, would be the third in Ohio and the first since FirstEnergy Corp.'s (FE) Perry plant was completed in 1987. USEC, of Bethesda, Md., has already announced plans to build a new uranium enrichment plant at the Piketon site.
Duke is one of several U.S. power companies hoping to be on the leading edge of a nuclear renaissance in the country, as safety fears are supplanted by a big push for energy sources that emit little or no greenhouse gases. Until recently, nuclear power had found little support in the U.S. since a near-meltdown at the Three Mile Island plant in Pennsylvania in 1979.
The last U.S. nuclear power plant to be constructed was the Tennessee Valley Authority's Watts Bar Unit 1, which began commercial operations in 1996.
In 2007, Duke announced plans to build a two-unit nuclear power plant in South Carolina. The company is awaiting approval from regulators for a combined operating and construction license for the plant, but the project isn't on a short list of proposed plants vying for federal loan guarantees. Such guarantees are considered important because nuclear power plants cost multiple billions of dollars to build, and financing can be difficult to obtain.
In a presentation to analysts earlier this month, Duke expressed interest in seeking a partner on additional nuclear power projects beyond the one in South Carolina, but didn't provide details.
Adding nuclear power to the company's fleet would help Duke reduce carbon dioxide emissions in Ohio, where it relies on coal-fired power plants to supply its utility customers. Congress is currently debating federal limits on carbon dioxide and other heat-trapping gases linked to climate change.
At the same time, state regulations are expected to play a crucial role in many nuclear-reactor proposals. Because of the massive expense and lengthy construction timetable for nuclear power plants, utilities need state laws that allow them to start recovering costs from ratepayers before the plants are actually built. In April, Ameren Corp. (AEE) said it was suspending efforts to build a new nuclear power plant in Missouri because of a lack of support from the state legislature.
-By Christine Buurma and Mark Peters, Dow Jones Newswires; 212-416-2143; christine.buurma@dowjones.com