By Eileen O'Grady

HOUSTON, Jan 9 (Reuters) - Entergy Corp's nuclear unit said on Friday it will suspend activity on two applications to build new nuclear reactors, one in Mississippi and one in Louisiana.

In a release, New Orleans-based Entergy said it asked the U.S. Nuclear Regulatory Commission to halt review of its applications to build two reactors based on GE Hitachi's Economic Simplified Boiling Water Reactor (ESBWR) design, citing "unsuccessful attempts" to come to terms with GE Hitachi.

Entergy said it still supports development of new nuclear plants in the United States and will explore alternate nuclear technology.

While suspending its effort based on the ESBWR design, Entergy said the licensing work will be used for any alternative technology selected.

"The licensing efforts completed to date will be beneficial as we pursue other alternatives, and our work will be useful with respect to other reactor designs we are evaluating," said Paul Hinnenkamp, vice president of Entergy Nuclear.

Hinnenkamp said the suspension "is not a criticism" of the ESBWR design.

"This action simply reflects the fact that we have not been able to come to mutually agreeable terms and conditions with GEH for the potential deployment of an ESBWR," Hinnenkamp said.

In November, Exelon Corp, the country's largest operator of nuclear plants, said it would drop the ESWBR design in favor of another technology for its proposed Texas nuclear project.

While calling the design promising, Exelon blamed the design's uncertain timing for putting Exelon's Victoria project in the bottom of two tiers in an initial ranking by the U.S. Department of Energy which was prioritizing requests for federal loan guarantees for 14 nuclear projects, many more than the $18.5 billion program can support.

Last year Entergy filed construction and operating license applications with the NRC to build a single 1,550-megawatt ESBWR reactor at its Grand Gulf nuclear station near Port Gibson in Claiborne County, Mississippi, about 130 miles north of Baton Rouge, and at its River Bend nuclear station near St. Francisville in West Feliciana Parish, Louisiana, about 24 miles north-northwest of Baton Rouge.

Two other companies have selected the ESBWR design as U.S. utilities consider a revival of nuclear-plant construction:

Dominion for a proposed plant in Virginia and DTE Energy for a new plant in Michigan.

(Editing by David Gregorio)

((eileen.ogrady@thomsonreuters.com; +1 713 210 8522; Reuters Messaging: eileen.ogrady.reuters.com@reuters.net)) Keywords: UTILITIES ENTERGY/NUCLEAR

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