June 30, 2009

Victoria Advocate

Exelon Nuclear won’t decide whether to build a Victoria County plant for at least three years – and possibly as many 20.

The company bought itself a two-decade window to weigh its options by announcing Tuesday it will seek an early site permit instead of a construction and operating license.

Exelon planned to decide by early next year whether to build locally. Unforeseen U.S. economic woes, unpredictable energy prices and a lack of ample federal loan guarantees threw a reactor-sized wrench into those plans, Exelon spokespeople said.

The decision to file the early site permit, though, gives nuclear supporters hope. The move shows Exelon hasn’t given up wholly on building locally, they say.

"The fact they’re willing to move forward with this early site permit means they still have strong confidence in Victoria and in this site," said Dale Fowler, president of the Victoria Economic Development Corp. "I view that as very positive."

Even so, Fowler and Mayor Will Armstrong said the move disappoints. The economic boom of breaking ground on hundreds of new jobs and homegrown energy is delayed for years.

An early site permit, if granted, gives a federal stamp of approval to the proposed Victoria County location. The Nuclear Regulatory Commission will evaluate factors such as site safety, environmental impact and emergency planning.

"Once they get the early site permit, then they could apply for a license to build and operate a nuclear power plant," said Victor Dricks, a Nuclear Regulatory Commission spokesman.

The early site permit, and construction and operating license, each require about three years of federal study. If Exelon one day chooses to build the plant, some data from the early site permit can be used toward the construction and operating license.

"It could expedite that second licensing process," Dricks said.

Exelon spokespeople said Tuesday’s announcement does not reflect disinterest in this region.

"Victoria is a great site for a nuclear power plant," said Bill Harris, Exelon’s Victoria-based spokesman. "Economically speaking, now’s not the time."

Craig Nesbit, another spokesman, added, "We are not walking away from Victoria. We are simply extending the decision time, giving ourselves more time to let things settle out a bit."

The company renewed recently its water reservation agreement with the Guadalupe-Blanco River Authority.

Exelon extended its agreement – a reservation of 75,000-acre-feet of water per year – for another year, said Bill West, the river authority’s general manager. The one-year agreement costs Exelon $1.1 million.

Exelon won’t likely reserve the costly river water for extended periods beyond its one-year agreement, Nesbit said.

"In order to do an early site permit, we have to have a fairly competent water supply," the Exelon spokesman said. "We’re going to continue talking with the Guadalupe-Blanco River Authority. We have water reservations through next June. If the river authority has other uses for that water after that, they’ll use it elsewhere."

Exelon could turn to other river authorities or the Gulf of Mexico for needed water, Nesbit said. The Guadalupe River, however, is the company’s best option.

West would not speculate about other water customers the river authority could sell to, or how Exelon’s decision will affect regional water planning.

"We’ve got some time to work on it," West said.

In the meantime, Exelon continues its hostile bid to take over NRG Energy, which proposes to build two new reactors in Bay City. The city is home to the South Texas Project, an operational nuclear power plant.

NRG Energy is one of four likely recipients of $18.5 billion in federal loan guarantees, the Energy Department announced in May.

NRG stockholders meet in mid July to further discuss the takeover attempts.

Nuclear opponents say that while the economic sky fell on Exelon’s attempts to build locally, problems bubble in other areas.

"There are major water issues regarding the Victoria site," said Jim Blackburn, Goliad County’s Houston-based environmental lawyer. "The decision gives Exelon time that frankly does not surprise me they need. I think they’re aware of the serious concerns at the Victoria site, specifically as they relate to water."