Japanese company planned to invest in plant’s expansion.
Monday, March 14, 2011
By Asher Price
Austin American-Statesman Staff
The repercussions from an earthquake that has rocked nuclear facilities in Japan threaten to shake up the financial grounding of a proposed power plant expansion in Texas.
A Japanese company that owns the distressed Fukushima Daiichi power plant had figured to own as much as 20 percent of two proposed reactors at the South Texas Project . But with the company, Tokyo Electric Power Co. , reeling from reports of radiation leaks, financial analysts on Monday called the deal uncertain.
Some of the South Texas Project electricity is shipped to Austin, which is a part-owner of the two current reactors. The city is considering whether to buy more power from the two proposed reactors.
Tokyo Electric had agreed to spend $155 million to become a 10 percent owner of two proposed reactors at the South Texas Project.
That money, which included an option to spend an additional $125 million for another 10 percent stake, was contingent on potential federal loan guarantees. With Washington now reconsidering nuclear power, those loan guarantees have become a very open question.
Funding questions aside, environmentalists seized on the disaster in Japan to oppose the South Texas Project expansion.
"The impending disaster at the Fukushima reactor is evidence for why we don’t want to expand (South Texas Project) on Matagorda Bay near Bay City," Donna Hoffman , a spokeswoman for the Lone Star Chapter of the Sierra Club, wrote in an e-mail Friday. "We don’t call them tsunamis, but we experience huge storm surges — you remember the deadly force of Hurricane Katrina — and we really shouldn’t expose ourselves to this kind of risk of an enormous nuclear disaster on top of the wake of a huge, catastrophic weather event."
NRG, the chief owner of the South Texas Project, wants to double its reactors from two to four, drawing opposition from some environmentalists.
But such a quake is highly unlikely in Texas, geophysicists said.
"Just the geological environment here is not one you’d expect to get huge earthquakes," said Cliff Frohlich , a senior research scientist at the University of Texas’ Institute for Geophysics.
"Little earthquakes" shake Texas all the time, Frohlich said. Quakes of magnitude 3 strike in the Panhandle occasionally but are a million times weaker than the earthquakes that hit Japan.
With no major plate boundaries in Texas, it’s "about as safe as it could get," he said.
The federal government requires plant licensees "to design, operate and maintain safety-significant structures, systems and components to withstand the effects of earthquakes and to maintain the capability to perform their intended safety functions," said Lara Uselding , a spokeswoman for the Nuclear Regulatory Commission.
Buddy Eller, a spokesman for the STP Nuclear Operating Company, said the company had estimated that the maximum hurricane surge in the Gulf of Mexico, coupled with a 100-year flood on the Colorado River, which runs next to the plant, would raise water levels to 26.7 feet above sea level, still below the plant, which sits 29 feet above sea level.
The plant would be "fully functional in any type of flooding event," he said.
The nuclear problems in Japan come as some environmental activists in Austin have renewed their efforts to keep the city from reaching a deal with NRG, which wants Austin to buy power from the expanded plant. The City of Austin has a 16 percent ownership stake in the current plant.
At a press conference last week, several environmental groups announced a new coalition — Solar Si, Nuclear No — and pointed to nuclear waste, the large amounts of water consumed by plants and the cost overruns that plagued the last round of nuclear construction.
Obstacles laid down by environmental groups to the South Texas Project’s expansion are likely to be dwarfed by financial repercussions to the nuclear industry. Standard & Poor’s has warned clients that nuclear projects face delays or cancellations as a result of the situation in Japan, and analysts at Moody’s said the Japanese nuclear problems create "uncertainty" for the NRG expansion project, Reuters reported Monday.
In another sign of how the Japan disaster has shaken the future of the South Texas Project, CPS Energy of San Antonio and NRG have agreed to suspend talks about CPS possibly buying power from the proposed nuclear expansion, the San Antonio Express-News reported.
Additional information from staff writer Marty Toohey.
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