Last month, the Trump administration announced a deal to spend at least $80 billion to build at least 10 new large-scale Westinghouse reactors, a move that seemed to anoint a “national champion” in nuclear power. On its face, the agreement appeared to offer these new U.S. AP1000s — the type of reactor built at Southern Company’s Plant Vogtle in Georgia — with a guarantee of financing akin to direct funding from the Department of Energy’s Loan Programs Office.
But exactly how the $80 billion will be spent and when remains an open question.
The details are unusual. Rather than coming from the Energy Department, the Department of Commerce brokered the deal in what one Republican source described as an example of the administration’s internal “chaos.” Rather than coming from the federal budget, the $80 billion appears to be contingent upon Japan fulfilling its $550 billion investment in the U.S. that President Donald Trump negotiated in Tokyo last month. Rather than funneling the money through an entity such as the LPO, the disbursement process remains unclear.
“Without a sense of how this $80 billion is going to be used for nuclear in the U.S., it’s not going to give actual developers or owner-operators a chance to structure their own finances in response,” Advait Arun, a former Treasury Department analyst who now researches capital markets and energy finance at the Center for Public Enterprise think tank, told Latitude Media. “Is $80 billion going to go through LPO? Will it go through the White House? Are there other costs? There [are] all these different ways to imagine how the $80 billion will flow.”
Adding to the uncertainty, a top Energy Department official said this week the federal government may take ownership of the new reactors outright.
“The role of having the government involved in private markets is sacrosanct; you just don’t do it,” Carl Coe, the Energy Department’s chief of staff, said at a conference hosted by the Tennessee Advanced Energy Business Council. “But this is a national emergency.”
In a statement, Cameco, the Canadian uranium giant that owns a 49% stake in Westinghouse, said the initial agreement with the Trump administration set the stage to “negotiate and enter into definitive” contracts. Brookfield Asset Management, the private equity firm that owns the 51% share of the nuclear giant, told Latitude Media it expected to broker a binding contract by early next year.
Road to an IPO?
One thing is clear from the framework agreement: The Trump administration would like Westinghouse to go public, and it wants a share for the American taxpayer.
Under the agreement, the Commerce Department will help facilitate construction of the new reactors across the U.S. with a minimum of $80 billion. If the administration follows through with a final investment decision by January 2029 and Westinghouse’s total value increases to at least $30 billion, then the government has the right to request that the company’s owners sell shares of the business on the stock market. As part of the deal, the U.S. government could then convert part of its investment into an equity right equivalent to a certain sum of shares. The total stake could be as high as 20%.
Since it’s privately held, Westinghouse has not released its estimated internal value. But when Cameco bought into the business in 2022, the valuation was at about $4 billion.
The vast majority of nuclear companies around the world are government owned. Whether it’s the United Arab Emirates, Japan, Russia, South Korea, or France, the most successful model for handling geopolitically sensitive radioactive materials and building giant plants that cost billions and last longer than most electrical infrastructure has been government ownership.
The U.S. has been the exception to that rule. But even so, the federally owned Tennessee Valley Authority has long served as one of the nation’s leading nuclear utilities. TVA is now fashioning itself as a testing ground to bring down the cost of new reactor models in the U.S., including small modular reactors.
While North America’s first small modular reactor may end up being GE Hitachi Nuclear Energy’s 300-megawatt design at the government-owned Ontario Power Generation plant, TVA is slated to build the second project with those models. As Latitude Media previously reported, TVA also became the first utility in the U.S. to sign a deal for power from a fourth-generation reactor design — the Google-backed Kairos Power project in Oak Ridge, Tennessee — in August.
TVA declined to comment on whether it’s considering building any of the 10 AP1000s the Trump administration is targeting with the Westinghouse deal. “We continue to evaluate multiple technologies including both large and small reactors,” Scott Fiedler, a spokesperson, told Latitude Media by email.
The big investor-owned utilities — Exelon, Duke, or Southern Company, for example — are arguably the ones with the resources to pursue a new nuclear deal. But so far, they have resisted building the plants themselves.
“I wouldn’t build a nuclear plant,” Calvin Butler, CEO of utility giant Exelon, told CNBC last week. “What I could do is lean in on combined-cycle gas turbines. What I could do is build community solar. What I could do is own battery storage.”
In an earnings call earlier this month, Duke CEO Harry Sideris said North Carolina’s biggest utility would need to sort out some insurance policy to manage cost overruns before embarking on its loose plans to build more than a gigawatt of new nuclear power by 2037.
“We still need to figure out what we’re going to do with cost overrun protection and how we’re going to protect our investors and our customers from overruns,” Sideris told investors on the call. “Nothing going forward until we have those other items resolved.”
Westinghouse is pursuing alternative ways to bring down the cost of new reactors. Earlier this week, the company debuted new artificial intelligence software it’s developing with Google to streamline construction and reduce the enormous cost of interest payments on loans from slow buildouts.
In one example, the company showed how the software found ways to optimize the $3.8 million it would cost to pull off 345 different tasks, reducing the estimated total price to $2.8 million.
‘A shiny toy’
That the landmark Westinghouse agreement came through the Commerce Department rather than the Energy Department is a sign of the lack of coordination between agencies under the Trump administration, a Republican source with direct knowledge of the White House’s nuclear plans told Latitude Media.
“Everyone is running around the globe trying to make deals to bring a shiny toy back to the president,” said the source, who spoke on condition of anonymity.
The source said it was a situation of “the left hand not knowing what the right is doing,” and expressed doubt that the Japanese would direct that much funding toward a non-Japanese company in the U.S.
But that might be about to change. In late October, hard-right stalwart Sanae Takaichi took office as prime minister, pushing her plans to rebuild her country’s nuclear sector. More than half of Japan’s operable reactors are still offline as part of a nationwide shutdown that occurred after the 2011 Fukushima-Daiichi accident, but the new Takaichi administration is aiming to restart those reactors and build new ones.
Under the deal Trump brokered, some funding will go to GE Hitachi, which is a joint venture between the U.S.-based energy giant GE Vernova and the Japanese industrial behemoth Hitachi. Westinghouse itself was owned by the Japanese giant Toshiba from 2006 until its sale to Brookfield in 2018. But as Takaichi and Trump seek an advantage over China and Russia on nuclear power, the Japanese may have an incentive to come through on backing the American national champion.
Referring to the various deals administration officials are seeking to broker around the world, the GOP source said, optimistically: “If 20% happen, then we’ll regain an edge over China.”
