Wednesday, April 20, 2011

Ashley Furness
Austin Business Journal

NRG Energy Inc. has pulled funding to expand a massive nuclear plant in South Texas, officials announced on Tuesday citing events from Japan’s recent tsunami and earthquakes.

A press release said recent nuclear meltdown threats in Japan have “diminished prospects for the South Texas Project nuclear development,” and the company will write down its investment in the Texas project. The move comes just after affiliate Nuclear Innovation North America LLC (NINA) made a similar announcement, and just a few months since NRG began courting Austin Energy to start buying new nuclear power.

"The tragic nuclear incident in Japan has introduced multiple uncertainties around new nuclear development in the United States which have had the effect of dramatically reducing the probability that STP 3&4 can be successfully developed in a timely fashion," NRG President and CEO David Crane said.

NINA is jointly owned by NRG and Toshiba American Nuclear Energy Corp., and was leading development of the two, 1,350-megawatt nuclear reactors at the South Texas Project near Bay City. The companies said while they will not spend any more on the project right now, they will cooperate with partners wanting to continue work.

The decision will cost NRG and Toshiba about $481 million for all of NINA’s net assets. The expansion was slated to cost between $10 billion and $13 billion.

CPS Energy was also a partner. Officials released in March a statement that San Antonio’s municipally owned utility decided to suspend discussions indefinitely with NRG Energy, regarding buying additional supplies of nuclear power from the South Texas Project. CPS Energy owns a 40 percent interest in South Texas Project and a 7.625 percent minority ownership in two units that have yet to be constructed.