updated 6/23/2006 11:30:56 AM ET 2006-06-23T15:30:56

Hitachi Ltd. and General Electric have been tapped to build two nuclear reactors in the U.S. in a $5.2 billion project that underlines how soaring oil prices are boosting global interest in nuclear power.

The deal, confirmed by Hitachi on Friday for reactors outside Houston, for American power supplier NRG Energy Inc., is also likely to help the Japanese electronics and power plant manufacturer compete better against rivals.

Japanese electronics maker Toshiba Corp. recently purchased Westinghouse Electric Co. of the United States, striving to become the world’s No. 1 nuclear power company.

Hitachi said details were being worked out with Fairfield, Conn.-based General Electric Co., a conglomerate whose businesses span energy, jet engines and financial services. A final contract is expected in 2007 or 2008, and the reactors are to start operating by 2014.

Surging oil prices have been adding to the appeal of nuclear power despite safety concerns. Proponents have been trying to improve the negative image of nuclear power created by accidents such as the partial meltdown of the Three Mile Island nuclear plant in Pennsylvania in 1979.

The world’s nuclear power giants are counting on growing demand not only in the United States but also in China, where the power market is expected to balloon.

Last year, President Bush signed an energy bill that provides incentives to build new nuclear power plants in the U.S.

There are 100 nuclear power plants scattered across 31 states, but an order has not been placed for a new reactor since 1973. The United States now gets about 20 percent of its electricity from nuclear reactors.

In the fiscal year that ended in March, Hitachi’s sales in its electric power facilities and equipment business totaled 558 billion yen ($4.8 billion). Sales from its nuclear power business accounted for about 30 percent of that.

The reactors are part of a $16 billion outlay announced Wednesday by NRG Energy. Together, the projects will add 10,500 megawatts of new generating capacity to the company.

NRG generates more than 24,700 megawatts, mostly in Texas and the Northeast, South Central and Western regions of the United States. It also owns stakes in Australian and German plants. A megawatt is enough power to serve between 700 and 1,000 homes.

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