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NRG Slows Expansion As Feds Review Nuclear Regulations

NRG announcedthis week it will slow an expansion to add two units to the South Texas Project nuclear power plant in Matagorda County. NRG is waiting to see how federal regulators at the Nuclear Regulator Commission react to the nuclear crisis in Japan.
The NRC is assembling a task force of former NRC experts and current senior managers to review what can be learned from the Japan crisis. The task force will update the NRC within 30 days to determine whether there are any short-term, immediate changes that need to be made to U.S. nuclear power plants. By the end of the year, the task force is supposed to report back with a long-term review.

In an NRG press release announcing the STP expansion slow down, the company said it would focus on licensing and securing the federal loan guarantee that will make or break the expansion. Here's a pressrelasese quote from NRG's President and CEO, David Crane.

Since STPis very differently situated from the stricken nuclear plant in Japan – ten miles from the Gulf of Mexico, in a non-seismic area with hardened watertight protection around both its backup generation and its spent fuel storage facilities – it is not obvious to us that any modifications are necessary to regulatory requirements applicable to either our existing or planned nuclear facilities. However, as we unreservedly support our government’s proposed nuclear safety review, the prudent thing for us to do is to await the outcome of that review before committing more of our own or our partners’ capital.

Tokyo Electric Power Co. owns 10 percent of the STP expansion project and could be in for another 10 percent if the federal loan guarantee comes through. But TEPCO is still struggling with the Fukushima Daiichi nuclear power plant damaged by the earthquake and tsunami.

NRG could find itself in a search for another partner or a way to make up for for $155 million TEPCO investment. NRG Energy officials also hoped to bank on Toshbia Corp. for financial and technical support. Toshibia helped build reactors at the Fukushima plant.

The dominos seem to keep falling. CPS Energy, the San Antonio electric utility, said in a press release it is "indefinitely suspending all discussions with NRG regarding a purchase power agreement for nuclear power."

As I reported last week, NRG was looking for customers to buy power from the South Texas nuclear expansion. It was a way to secure financing to build the additional reactors.

At the beginning of this year,NRG officials began lobbying Austin Energy to buy power from the future STP reactors 3 and 4, but no formal discussion had begun.

After a messy lawsuit, CPS Energy found itself owning 7.6 percent of the yet-to-be-built STP expansion. It already owns 40 percent of the existing power plant. Austin Energy owns 16 percent.

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