Federal loan guarantees for new nuclear power plant construction should be at least doubled to allow construction of four to five additional plants, U.S. Energy Secretary Steven Chu said late Thursday.

If Congress were to approve this, companies such as Duke Energy Corp. (DUK) and Progress Energy Inc. (PGN) could be among the beneficiaries of the new loan guarantees.

Chu, in an interview with Dow Jones Newswires, said additional nuclear power plant loan guarantees would help rejuvenate a domestic industry and cut greenhouse gas emissions.

Although companies have submitted 18 new nuclear power plant license applications to the Nuclear Regulatory Commission, the Department of Energy only has authority for $18.5 billion, enough for four to five plants.

"If you really want to restart the American nuclear energy industry in a serious way...we [need to] send signals to the industry that the U.S. is serious about investing in nuclear power plants," Chu said on the sidelines of a conference here.

Chu didn't say when he would formally propose such an expansion.

Republicans have urged construction of 100 new nuclear power plants. While not going that far, Chu said "there's real interest out there [for] another four to five or more, we could easily do."

"It's part of how we're going to get to the carbon reductions we need in order to avoid the worst of climate change," Chu said.

Earlier this year, the DOE narrowed the list of proposed new nuclear power plants it's considering for the limited loan guarantees, pointing to the ones farthest along in the license application process.

New reactors at Southern Co.'s (SO) Vogtle plant in Georgia, SCANA Corp.'s (SCG) Summer plant in South Carolina, Constellation Energy Group Inc.'s (CEG) Calvert Cliffs plant in Maryland and NRG Energy Inc.'s (NRG) South Texas plant are among the projects still in the running for federal loan backing. Constellation is developing the Calvert Cliffs reactors as part of UniStar Nuclear Energy, a joint venture between Constellation and Electricite de France SA (EDF.FR).

"We definitely welcome it unconditionally," said Mitchell Singer, a spokesman for the Nuclear Energy Institute. "We've said for a long time now the loan guarantee program is remarkably unfunded."

Under the loan guarantee program, the government promises to assume the companies' debt obligations if they default on loans for the nuclear projects. Given rising construction costs exacerbated by a growing supply crunch for qualified engineers and specialized nuclear power plant parts, industry officials say new projects are unlikely to be able to move forward without government assistance.

Pressing for new nuclear power may help the administration win over a handful of Republican Senators needed to help pass a landmark climate bill into law. Sen. John McCain, R-Ariz., for example, supports a cap on emissions in principle, but said government support for nuclear power is essential for him to consider backing a bill that would cut greenhouse gases.

The Energy Secretary said the loan guarantees would help revitalize a U.S.-based nuclear industry, given that most of the major companies that build reactors are now owned by international companies.

"It's also an American leadership issue," the Secretary said. "We were the pioneers in the nuclear industry...We are no longer the world leaders," he said.

Several companies, such as Exelon Corp. (EXC), have suspended their reactor license applications, citing difficult market conditions, including the dearth of loan guarantees and unresolved long-term waste liabilities.

New nuclear power plants are estimated to cost $5 billion to $8 billion to build. With such high upfront capital expenditures compared to the firms' market capitalization, financing is extremely difficult.

Marshall Murphy, Exelon's director of nuclear communications, said additional loan guarantees would be encouraging. "It would certainly make...it one factor that would be trending positively."

Other companies that have applied include a joint venture between TXU Corp. (TXU) and Energy Futures Holdings Corp., Dominion Resources Inc. (D) and PPL Corp. (PPL).

Earlier this week, Chairman of the Nuclear Regulatory Commission Gregory Jaczko said on the sidelines of a Platts Energy briefing that the agency was revising its license application schedule. Several applications would likely be delayed because more technical work from the companies was required, he said. Jaczko declined to elaborate.

-By Ian Talley, Dow Jones Newswires; (202) 862 9285; ian.talley@dowjones.com

(Christine Buurma in New York contributed to this article)