Sponsored by Tennessee Republican Lamar Alexander and Virginia Democrat Jim Webb, the bill would provide $100 billion in loan guarantees for carbon-free electricity projects, adding to the existing $47 billion loan guarantee program.
Although the additional loan guarantees would not be limited to nuclear power, the nuclear industry would likely be the major recipient of the extra money because it is one of the most established low carbon energy sources.
The legislation comes as Senate Democrats work to draw more support for controversial climate legislation by crafting measures that would increase support for nuclear power and offshore drilling.
This bill is separate from the climate legislation currently making its way through the Senate, said Alexander and Webb.
Alexander said senators working to advance the climate bill may try to incorporate some provisions from his legislation, but that was not his intention.
Alexander does not support establishing an economy-wide, cap-and-trade system to lower carbon emissions.
"I do believe that climate change is an issue and we need to deal with carbon in the air," Alexander told reporters at an American Nuclear Society conference.
"I think the most effective way to do it is to double nuclear production and to do heavy (research and development) on alternative energy," he added.
The lawmakers' energy bill would cost up to $20 billion over 10 years.
In addition to the loan guarantees, the bill would provide $750 million annually for 10 years to research and development of: carbon capture and storage, advanced biofuels, batteries for electric cars, solar power and recycling used nuclear fuel.
After narrowly passing the House earlier this year, climate legislation that would limit greenhouse gas emissions has run into opposition in the Senate even from some moderate Democrats.
Webb raised concerns about the effectiveness of the climate legislation in Congress and said he does not back the Senate bill in its current form.
"I have a lot of reservations about cap and trade as a concept," Webb said. "And I have very strong reservations about the notion that we should apply different standards to ourselves in terms of global warming than other countries such as China."
The United States is headed to international negotiations on climate change in Copenhagen next month. U.S. President Barack Obama and other world leaders signaled over the weekend that a legally binding deal for reducing global carbon emissions will not be reached at the meeting.
Instead, the leaders expect to develop a framework for an international climate agreement.
U.S. lawmakers have raised concerns about that setting targets to limit the nation's carbon emissions would make U.S. industries less competitive, if major emitters such as China do not agree to similar cuts.