The fate of PPL Corp.'s tentative plan to build Pennsylvania's first new nuclear reactor in a quarter-century could rest on the fate of an un-debated provision in the recently passed Senate energy bill.

The one-sentence provision promises billions of dollars in government loan guarantees for the expansion of nuclear energy. Without the guarantees, PPL will be unable to secure the financing necessary to pursue its nuclear ambitions, according to company officials.

''That is something we absolutely require,'' PPL Chief Executive Officer James Miller told financial analysts during a conference call last week.

In June, PPL sent a letter informing the U.S. Nuclear Regulatory Commission it might apply for a license for a third reactor at its Susquehanna plant, about 75 miles northwest of the Lehigh Valley. Such an application would be the first from Pennsylvania since the state became, with the meltdown of a reactor at the Three Mile Island power plant in 1979, the place where the nation's rapid nuclear expansion came to a sudden halt.

News of PPL's Susquehanna plan was immediately met by opposition from several watchdog groups, which voiced concern about the disposal of radioactive waste, the impact on the Susquehanna River watershed and other issues.

The Senate provision for loan guarantees, first reported in The New York Times last week, creates yet another point of contention: Taxpayers could end up paying billions of dollars to cover the cost of bad loans.

''What I don't understand is why so many people who support free market principles espouse corporate socialism when it comes to nuclear power,'' said Eric Epstein, who heads Three Mile Island Alert, a Harrisburg watchdog group that monitors the three nuclear power plants on the Susquehanna River. ''If nuclear power is so profitable, then why do we need to insure it?

''It's time for nuclear power to stand on its own.''

Both Pennsylvania senators, Republican Arlen Specter and Democrat Bob Casey, voted for the energy bill.

A spokeswoman for Specter said the senator supports ''nuclear energy as a part of a diverse supply of domestic energy, and he is interested in reviewing plans to expand nuclear energy in the U.S.'' A spokeswoman for Casey said he is reviewing the bill's potential impact.

In recent years, as oil and natural gas prices have risen and the environmental costs of burning fossil fuel have become clear, nuclear power has been touted as an emissions-free, nearly-inexhaustible source of power. The message has found a receptive audience among members of both major political parties.

Sensing an opportunity, the energy industry has been quick to take action. The letter that PPL sent to the Nuclear Regulatory Commission in June was the 20th such notification of nuclear plans the agency has received since 2005; like the Susquehanna proposal, most involve building reactors at existing nuclear plants.

''We believe that nuclear power will play a role in the effort to address global climate change while ensuring that the U.S. economy has the power it needs for continued prosperity,'' PPL Chief Operating Officer William Spence said in a press release last week.

Each new reactor is expected to cost several billion dollars. Lobbyists have told lawmakers that the energy industry will need as much as $50 billion in government backing in the next two years, according to the Times.

In a telephone interview, PPL Vice President of External Affairs Joanne Raphael said would-be lenders have made it clear to the company that they will not finance a third Susquehanna reactor without loan guarantees.

Such guarantees -- also used to back student loans -- require the government to repay banks if borrowers default.

TMI Alert's Epstein said PPL's record is cause for alarm. He noted that the first two Susquehanna reactors, which are located in Salem Township, Luzerne County, ended up costing roughly twice as much PPL had projected when it applied for regulatory approval to start construction. By the time they were done, in the mid-1980s, the final cost was about $4 billion.

''If the past is any indicator of the future, nuclear operators will default on their loans,'' he said.

PPL blamed the cost over-run on a rise in interest rates and the expense of mid-course design changes necessitated by the Three Mile Island accident.

Advocates of nuclear energy, meanwhile, have cast loan guarantees as a necessity, not a choice.

The Edison Electric Institute, a trade association in Washington D.C., projects that U.S. energy demand will increase by more than 40 percent by 2030.

''It's just not feasible to think that we can take care of our energy demands going forward without nuclear energy,'' said Mark Singer, a spokesman for another Washington-based industry group, the Nuclear Energy Institute.

He cited other private-sector projects, such as the Transcontinental Railroad in the 1860s, that were launched with help of the government.

''[The government] has always acted as a venture capital firm -- or incentivizer -- for policies that are for the general welfare,'' he said.

TMI Alert's Epstein argued that public resources would be better spent elsewhere. He suggested promoting renewable solar and wind energy, or even finding a solution to the problem of nuclear waste disposal.

The Susquehanna facility alone produces 60 metric tons of radioactive waste annually.

For its part, the federal government has agreed to bury all the nation's nuclear waste under a 13-million-year-old volcanic ridge, called Yucca Mountain, in Nevada. But the plan has been stymied by a host of logistic and environmental concerns, not to mention fierce opposition from people who live in the vicinity of the mountain.

The impasse has left nuclear plants with no alternative to storing their radioactive waste on-site. The Susquehanna plant's used uranium awaits removal in either pools of water or huge steel containers, which are locked inside concrete bunkers.

''From and ethical and moral standpoint, we should cure the original problem before we exacerbate it,'' Epstein said.

The House of Representatives was expected to begin its own energy debate this weekend. Whether the loan guarantee provision makes it into law will depend on how the House and Senate reconcile their bills.

sam.kennedy@mcall.com

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