CPS OKs new South Texas reactor agreement with NRG

[joshcryer]

The board of trustees of San Antonio's CPS Energy on Monday approved an agreement with Nuclear Innovation North America and NRG Energy Inc (NRG.N) on the ownership of the expansion of the South Texas nuclear project.

The companies have said they expect to spend about $10 billion to build two 1,350 megawatt reactors at South Texas. They expect the U.S. Nuclear Regulatory Commission to issue an operating license in 2012 and the units to enter service in 2016 and 2017.

(...)

Before CPS and NINA settled their differences, which were related in part to escalating construction cost estimates, NRG worried the DOE would give its limited loan guarantee funds to other projects.

Under the agreement, NINA's interest in the two new reactors would climb from 50 percent to 92.375 percent. CPS' stake would drop from 50 percent to just 7.625 percent, or about 200 MW of capacity.

NINA will pay for development costs after Jan. 31, 2010, contribute $10 million to REAP Inc, a non-profit partnership of CPS, Bexar County and the City of San Antonio, over the next four years and pay CPS $80 million, in two $40 million payments, after the DOE approves a loan guarantee.

http://www.reuters.com/article/idUSN0110149520100301

Next loan guarantee could go to Bay City nuke plant

The head of the group planning to add two nuclear reactors to the South Texas Project power plant near Bay City said Friday he believes it could be next to receive a federal loan guarantee.

“We have a good shot of being the next one,” said Steve Winn, CEO of Nuclear Innovation North America, a joint venture of NRG Energy and Toshiba Corp.

In February the Department of Energy gave out its first nuclear loan guarantee of $8.3 billion to Southern Co. to build a nuclear plant in Georgia.

The South Texas Project expansion had been widely considered the front-runner for that first loan, but a lengthy dispute with San Antonio utility CPS Energy, which owns a share of the project, put it in limbo for several months.

With the dispute settled last month, Nuclear Innovation is hoping to have other partners lined up.

http://www.chron.com/disp/story.mpl/business/energy/6911345.html

Given that certain dishonest persons kept bumping a month old article I felt inclined to look in to this "controversy" to see any updates. Clearly the older post is outdated, if not clear disinformation.

[bananas]

1. You mean this one: "CPS/NRG Settlement Shows Nuclear Power Too Costly, Too Risky"

There's no disinformation in this article - it is based on the facts:

CPS/NRG Settlement Shows Nuclear Power Too Costly, Too Risky

http://texasvox.org/2010/02/17/cpsnrg-settlement-shows-nuclear-power-too-costly-too-risky

CPS/NRG Settlement Shows Nuclear Power Too Costly, Too Risky
February 17, 2010 by citizensarah

Statement of Tom “Smitty” Smith, Director, Public Citizen’s Texas Office

Today’s announcement that as a part of a settlement with NRG Energy, CPS Energy will withdraw its application for a federal loan guarantee for the South Texas (Nuclear) Project (STP) expansion and end further investment in the project demonstrates nuclear plants are too costly and too risky to build.

CPS Energy and the San Antonio City Council have signaled their desire to stop throwing good money after bad at STP, a message we hope will tell the U.S. Department of Energy that this plant is a poor candidate for federal loan guarantees. This debacle should show the federal government that nuclear loan guarantees are a fundamentally flawed and wasteful use of taxpayer money.

At $18.2 billion, the cost of STP has already tripled in just a year. When STP 1 and 2 were built, they ended up being six times over-budget and eight years behind schedule, and STP 3 and 4 look like they are on track to beat out that poor performance record.

Today’s announcement is a victory for the many citizens of San Antonio that have worked so hard in the last year to bring openness and accountability to the city’s participation in this project. We applaud CPS for wisely seeing the futility of wasting more time and energy on this flawed nuclear endeavor. We hope that they will be satisfied with the deal they’ve gotten and avoid the temptation to increase their ownership in the project. CPS has finally reached a settlement that shields San Antonio ratepayers from the financial risks of yet another nuclear deal gone wrong. Any future investment would throw that protection to the wind.

On Thursday, the City Council will vote on a proposed rate increase for CPS. The City Council should put a firewall in that proposal to ensure that no unauthorized money will be siphoned off to buy a bigger stake in STP. San Antonio can’t afford to let this rate increase become a back door to continued nuclear investment.

We also have to wonder how NRG will move forward, without another clearly delineated partner in the project. Less than a month ago, NRG announced that if CPS “does not meet future obligations representative of its ownership interest in the site”, they “will wind down the project as quickly and as economically as possible.” We certainly hope that NRG CEO David Crane will remain true to that expressed intent to protect his shareholders from the next financial failure in a long historic line of overly expensive, poorly executed nuclear projects.

[bananas]

2. Funny how the cost estimate

dropped to $10B now that there's only $10B in loan guarantees left.
Sounds like they're just pulling numbers out of their ass to get the loan guarantee.
You can't trust the nuclear industry.

[kristopher]

3. timeline

2006: NRG Energy partners with CPS Energy (San Antonio’s municipal utility)and they begin planning two new reactors at South Texas Nuclear Site. Cost of the reactors is projected to be $5.4 billion.

2007: NRG Energy and CPS Energy submit the first combined construction and operating license application for South Texas Project to the Nuclear Regulatory Commission since 1978.

2008: CPS’s Board of Trustees (headed by San Antonio mayor Julian Castro) approves $276 million investment in preliminary site work, and proposes a 5% rate increase for ratepayers. Public opposition forces the increase down to 3.5%.

February 2009: City of Austin, TX rejects partnership in South Texas Project, citing financial risks, lack of waste disposal, and lack of overall electricity demand sufficient to merit investment.

June 2009: New cost estimate for South Texas project is at $10 billion without financing, $13 billion with financing. This is a 40% increase since 2006 estimate.

Late June 2009: City of San Antonio agrees to pay 40% of the investment and proposes 5% rate increases every other year.

August 2009: Julian Castro, mayor of San Antonio and head of CPS Board of Trustees, backs away from 40% and instead suggests San Antonio should invest only 20% in the project, citing concerns about rising costs and lack of electricity demand.

October 2009: San Antonio City Council holds hearings to decide whether to invest an additional $400 million for the license application. It is revealed in these hearings that the estimated cost of the project has increased by $4 billion to $17 billion. Castro suspends vote on $400 million bonds.

November 2009: Castro urges NRG to go back to Toshiba (the reactor manufacturer) to try negotiating the price down. Negotiations are not yet resolved.

December 6, 2009: CPS files a lawsuit against NRG seeking to get out of the contract, and accuses NRG of forcing them out of the contract. CPS seeks $32 billion in damages.

December 7,2009: It is discovered that CPS staff knew about the $4 billion estimated price increase, potentially since November 2008.

December 23, 2009: Cost estimates go up again to $18.2 billion, $5 billion more than CPS said is affordable for San Antonio.

January 11, 2010: Castro calls meeting between CPS and NRG to sort out differences before court hearings. CPS’s general manager walks out.

January 29, 2010: CPS is granted permission from state district court to withdraw from South Texas Project. NRG states that it may pull out of South Texas Project.

February 17, 2010: CPS Energy reaches a final settlement with NRG, taking only a 7% stake in the project, down from 50%. NRG must find investors to cover the remaining stake in the project—a difficult prospect given the competitive Texas wholesale power market, where South Texas will have to compete with lower cost alternatives.

www.citizen.org/documents/STNP%20Chronology.pdf

[joshcryer]

6. City of Austin is behind the dishonest cost estimates and NINA is going forward with the project.

[joshcryer]

4. I trust Reuters over some anti-nuke "environmental" site.

[joshcryer]

5. If NINA didn't trust their cost estimate they wouldn't be taking the vast brunt of the costs.

They were doing CPS a favor by letting them have half of the pie, now all controlling interests will be out of citizen's hands.

[joshcryer]

7. The facts are that CPS no longer has any big risk so their made up cost estimates...

...are irrelevant. They wanted out because special interests made numbers up. Likely because nuclear is a threat to gas and wind in Texas.

[joshcryer]

8. Kick for truth.

[joshcryer]

9. Kick.

[joshcryer]

10. Kick because of the misleading post.

[joshcryer]

11. The silence is deafening.

[joshcryer]

12. Kick.