STP plant expansion loses NRG as investor

www.CHron.com (San Antonio Express News): STP plant expansion loses NRG as investor

NRG Energy will no longer invest in the South Texas Project nuclear expansion near Bay City and will write down its investment in the face of deeply diminished prospects for the project since Japan's worst-ever nuclear accident.

"The project is not dead," CEO David Crane said Tuesday, "but it's not moving forward at this point, and to be frank, under the current circumstances, the reality of it moving forward in the foreseeable future is not high."

The company plans to record a first-quarter pretax charge of roughly $481 million from Nuclear Innovation North America, its joint venture with Toshiba Corp., NRG said.

NINA will continue to seek an operating license from the Nuclear Regulatory Commission, Crane said, as well as federal loan guarantee from the Department of Energy.

Crane said he can envision a time when the project, with a license and loan guarantee in hand, will be attractive to new investors.

Toshiba, which holds a 12 percent stake in NINA, will take over the costs to continue to pursue the NRC license. But Crane acknowledged that any roadblocks in that process could cause Toshiba to drop its funding.

CPS Energy, which retains a 7.6 percent stake in the expansion, said it will continue to support efforts to secure the federal loan guarantee and operating license. It stopped its investment, which totaled about $386 million, more than a year ago.

The municipal-owned utility would receive $80 million from NRG if the project receives the loan guarantee.

Spokeswoman Lisa Lewis said it's too soon to tell whether CPS will ultimately lose its investment. She noted that there were times during the development of STP's original two reactors when the project looked dead, only to be revived by new partners and new circumstances.

CPS is a 40 percent owner in STP 1 and 2; Austin Energy owns 16 percent and NRG has 44 percent.

Foes still fighting license
Anti-nuclear activists cheered Tuesday's announcement, but expressed dismay that NRG didn't pull the plug entirely.

Karen Hadden of the SEED Coalition, an Austin-based environmental group, said her organization and others would continue to fight the project's licensing efforts.

NRG recognized last month that it likely lost a major investor in the expansion after Tokyo Electric Power Co.'s Fukushima Daiichi plant was crippled by a tsunami spawned by an earthquake. NRG indefinitely suspended all detailed engineering work and other pre-construction activities.

That reduced the workforce on the project from 1,000 to about 350.

Crane said many of those were engineers working for other partners, and so he did not know how many would be retained after Tuesday's announcement.

NINA will keep three employees on the project, he said.

The South Texas Project Nuclear Operating Co. had about 120 workers assigned to the expansion at its peak; the number is now 24.

Tokyo Electric Power's president confirmed Monday, according to a story on Nikkei.com, that the company will reconsider its overseas business strategy as it focuses on bringing the damaged reactors under control.