If nuclear power is such a good idea, why does it need financial help from U.S. taxpayers?

This week, Energy Secretary Ernest Moniz announced that the Obama administration would extend a $6.5 billion federal loan guarantee to cover part of the cost of building two new reactors at Southern Co.’s Alvin W. Vogtle site. Thursday he went to Waynesboro, Ga. to finalize the deal. Another $1.8 billion in guarantees could come soon.

The impact: Southern’s Georgia Power subsidiary, which owns 46 percent of the project, will save $225 million to $250 million because the loan guarantee will reduce interest costs. Instead of borrowing from a commercial bank, Southern can now borrow at rock bottom rates from the government’s Federal Financing Bank. And you, gentle reader, the taxpayer, take on all the risk if the project goes bust. Does the name Solyndra ring a bell?

If that’s not enough, Southern is also getting help from the federal production tax credit and other federal incentives that will ultimately save the company an additional $2 billion or so, Southern’s chief executive Tom Fanning said on a Jan. 29 conference call about earnings.

“This is a deeply subsidized project that will cost the taxpayers a lot,” said Ken Glozer, a former Office of Management and Budget senior official who is president of a consulting firm OMB Professionals.

Southern has said it didn’t need the loan guarantee to finish the project. But the guarantee doesn’t hurt.

The company also says that it will pass along the savings in financing costs to Georgia electricity ratepayers, but those ratepayers are already footing a large chunk of the reactors’ construction costs. Usually ratepayers only pay such costs once a generating station is in operation, not while it’s being built. In December, the Georgia Public Service Commission approved a three-year plan to spread out $465 million in rate increases, according to Wells Fargo Securities analysts. Southern said customer rates once the units are in service would rise between 6 and 8 percent, less than the 12 percent increase originally projected for capital costs.

This is all part of a bigger picture. Less than a decade ago, the nuclear industry was anticipating a renaissance, fueled by hopes that climate concerns about fossil fuels would trump safety worries and would help rally support beyond the industry’s usual allies. Congress tried to do its part by approving in the 2005 Energy Policy Act a $17.5 billion program of nuclear loan guarantees.

But even with that help, building a nuclear plant is extremely expensive, and for a single utility, even a large one, to undertake such a project means betting the farm, as former Duke Energy chief executive Jim Rogers once put it. Moreover, costs rose since 2005. While Congress envisioned helping half a dozen reactors or more, the program is now expected to cover only three or four.

Then, if those challenges weren’t enough, the industry was hit by the recession, competition from low natural gas prices, and the Japanese earthquake and tsunami that destroyed three reactors at the Fukushima plant and fanned safety concerns worldwide.

It wasn’t just a perfect storm. It was three perfect storms.

Moniz said the Vogtle project was “not only a major milestone in the Administration’s commitment to jumpstart the U.S. nuclear power industry, it is also an important part of our all-of-the-above approach to American energy as we move toward a low-carbon energy future.”

Many experts say it’s not the sort of milestone Congress and the industry once had in mind. The nuclear industry is nearly halfway through a more than $30 billion construction program, with the two new reactors being built in Georgia, and three others in South Carolina and Tennessee. Like the ones in Georgia, a pair under construction in South Carolina can rely on a state law allowing costs to be passed along to customers while construction is in progress. The fifth is being built by the Tennessee Valley Authority.

But while five reactors are under construction, four others have closed down or announced plans to close down. Two cited competition from natural gas plants and two others faced large repair and upgrading costs. The renaissance seems to be stillborn.

Proponents of nuclear power are still trying, though, and they say that the loan guarantee and production tax credits aren’t any different from what wind and solar projects get. Level playing field and all that. Besides, Southern says, Solyndra was a new company with a new technology whereas Southern has been around for roughly a century and nuclear power plants have been in operation for decades.

“Loan guarantees have been in place for years and are a successful vehicle used by the federal government to ensure investment in critical infrastructure projects,” Marvin Fertel, president of the Nuclear Energy Institute, said.

The Vogtle loan guarantee had been conditionally approved by the Obama administration four years ago, and Southern is already well into construction — although it’s running about 21 months behind schedule according to the anti-nuclear group Public Citizen. (You can see photos of the project’s progress here.) The reactors are Westinghouse AP1000 models, a new generation reactor.

Wells Fargo last month lowered its earnings outlook for Southern, citing “construction risk” from the nuclear reactors as well as a modern coal plant under construction — and over budget — in Mississippi. Now that risk belongs to all of us.

“No doubt, this is a bad deal for the American people who have been put on the hook for a project that is both embroiled in delays and cost overruns and to a company that has publicly stated that it does not need federal loans to complete the project,” Allison Fisher, Outreach Director, Public Citizen’s Energy Program said. “This is a classic case of throwing good money after bad – an unnecessary and unconscionable decision to make with taxpayer money.”

Bonus fact: The reactor site in Georgia is named after the late Alvin Ward Vogtle Jr., former chairman of Southern. Vogtle was an Army Air Force pilot in World War II, and flew more than 30 missions before crash-landing in North Africa and being taken to a prisoner of war camp in Germany. On his fifth attempt, he escaped by scaling a 14-foot barbed-wire border fence and crossing to Switzerland. The character Steve McQueen played in the 1963 film “The Great Escape” was based on recollections of several veterans, including Vogtle.