Nuclear cost estimate rises by as much as $4 billion
October 27, 2009
By Tracy Idell Hamilton and Anton Caputo
San Antonio- Express-News
The estimated cost of two new nuclear reactors proposed by CPS Energy has gone up as much as $4 billion, prompting the San Antonio City Council to postpone its vote scheduled for Thursday on the project's financing, the Express-News has learned.
Mayor Julián Castro and CPS Energy have scheduled an emergency press conference on the issue today at 3:30 p.m.
The Express-News learned that the higher cost estimate came out during negotiations between contractor Toshiba Inc. and CPS Energy and its partner NRG Energy. At issue is the cost for the two boilers - the plants will be Advanced Boiling Water Reactors, which Toshiba has built in Japan.
CPS Energy's previous estimate for the expansion of the nuclear South Texas Project was $13 billion. That includes the cost of financing. That's up from $5.4 billion, including financing, when NRG Energy applied to the federal government in 2007 for the license to build the reactors.
CPS Energy has already spent roughly $280 million on the projects planning and engineering.
The council was set to vote on $400 million in new debt to continue financing the proposed expansion, which would add an additional 2,700 megawatts of power generation to the South Texas Project, which already supplies about 30 percent of San Antonio's energy needs.
That meeting has now been postponed. CPS has told the mayor's office it believes the increase is a negotiating tactic on the part of contractor Toshiba, and officials say they are flying to Japan in two weeks to negotiate further.
CPS officials have told Castro that the higher figure is simply a negotiating tactic, said Councilman John Clamp, who said the news puts the council in a "precarious situation."
"You don't play poker with billions," he said.
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