U.S. nuclear-power developers are increasingly looking for new partners to share the massive costs and risks of building new reactors.

Some companies already have inked agreements, while others including Progress Energy Inc. (PGN), NRG Energy Inc. (NRG) and Duke Energy Corp. (DUK) are looking. Utilities and nuclear-technology companies are the most likely partners for projects, but industrial companies and sovereign wealth funds also may take ownership stakes.

Driving the interest in partnerships is the sheer size of a nuclear project. Duke estimates the cost of its proposed two-reactor plant in South Carolina at $11 billion, plus financing costs. Signing up partners also can assure that the massive amounts of electricity a new reactor would generate has customers to use it.

The need for partnerships rises from the fractured nature of the U.S. power industry, which is spread out over dozens of generation and utility companies. Some companies are looking at reactor costs that rival their market capitalization unless they find a partner.

"That almost requires these kinds of alliances," said James Connaughton, executive vice president of corporate affairs and public and environmental policy at Constellation Energy Group Inc. (CEG).

Even as developers entertain possible partnerships, it remains unclear how many plants actually will be built. The U.S. Nuclear Regulatory Commission expects nearly two dozen project applications, while climate change legislation advancing in Congress would limit greenhouse-gas emission, providing a boost to the nuclear power industry. Nuclear plants, unlike coal and natural gas-fired plants, are nearly emissions free. But high costs and lingering safety concerns have plagued new nuclear projects, with no new reactors coming online in the U.S. in two decades.

 
   Possible Partnerships; Companies Search

The form partnerships take depends on the project. Plants built by utilities in regulated states likely will team up with other investor-owned utilities, electric cooperatives and state and municipal utilities, said Dan Krueger, managing director of the generation and energy markets practice at consultancy Accenture Ltd. (ACN).

These types of arrangements already are being seen, with Scana Corp. (SCG) set to share ownership of its proposed plant in South Carolina with state-owned utility Santee Cooper. Similar agreements are in place at existing nuclear plants.

In deregulated states where power is sold at market prices, the ownership of new reactors could include nuclear-technology companies, large industrial companies that may have power-purchase agreements with a new nuclear plant or sovereign wealth funds, Krueger said.

Partnerships are being formed for plant construction as well. Nuclear-technology companies and contractors share the risks associated with costs and timing with developers, but aren't owners. One such consortium is UniStar Nuclear, which is made up of Constellation Energy, Electricite de France SA (EDF.FR), and technology and construction companies.

Several companies are currently looking at new partnerships. Progress Energy said it's in talks with possible partners for a nuclear plant it has proposed in Florida. NRG Energy said it's looking for equity investors for two reactors it's planning at an existing nuclear plant in Texas. One potential arrangement the company has discussed is partnering with another power company with which NRG would then develop additional reactor projects.

Duke executives said during a recent meeting with analysts that the company is looking at a range of partnership options. This could include partnering on a project besides its own nuclear project in South Carolina.

"We think partnering is the right thing to do, whether it is partnering in something we build, or something that someone else is building," said David Hauser, Duke's chief financial officer, during the meeting last week.

Analysts have speculated Duke may be interested in investing in the Scana project. Duke declined to comment, while a spokesman for Scana said the company isn't looking for additional partners since its utility and Santee Cooper will need all of the power the reactors generate to meet customer demand.

(Mark Peters covers power, coal and emissions, and can be reached at 201-938-4604 or mark.peters@dowjones.com.)

(TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAmericas@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.)