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March 14, 2011

By Tracy Idell Hamilton, Staff Writer
Houston Chronicle

The ongoing nuclear disaster in Japan may signal the death knell for the long-planned addition of two nuclear reactors at the South Texas Project.

CPS Energy CEO Doyle Beneby announced Monday that the utility and NRG Energy, the majority partner in the expansion, have mutually agreed to suspend talks over CPS possibly buying power from the two proposed reactors, which were scheduled to be licensed and begin construction in 2012.

Tokyo Electric Power Co., which owns the crippled Fukushima Daiichi plant, was expected to invest in the STP expansion if the project was awarded a federal loan guarantee. In addition, NRG has said it would also rely on loan guarantees from the Japanese government to build the new reactors.

It now seems unlikely that either entity will be in a position to invest in the U.S. nuclear industry any time soon.

CPS’ recent renewed interest in buying additional power from the plant was seen as an important step forward for a project that, while wounded, had continued to lumber forward.

After a nasty lawsuit and war of words between the once-equal partners, NRG has had a difficult time finding new investors and selling the 2,700 megawatts the new units would produce, in part because of the reduced demand for power and the persistent low price of natural gas.

NRG said earlier this year that it would make a final decision about whether to continue investing in the project near the Texas Gulf Coast by the third quarter of this year.

Recent events seemed to buoy the expansion’s chances. Loan guarantees had moved forward within the Department of Energy. The Nuclear Regulatory Commission’s environmental review found no impacts that would preclude it from issuing a license for construction and operation. Talks with CPS spurred hope that small utilities and municipalities might also buy power from the units.

CPS is a 6.7 percent owner in the proposed expansion and spent about $400 million before it broke off its partnership with NRG, an investor-owned utility. CPS would get $80 million from NRG if the project is awarded a federal loan guarantee.

But as the grim news from Fukushima Daiichi continued, calls intensified from U.S. lawmakers and others to slow down the much vaunted, but long troubled nuclear renaissance.

Neither Beneby nor a spokesman for NRG would assess the likelihood that the project is dead.

"Until more information is available, it makes sense to put our discussions on hold," Beneby said. "My first thoughts are for the people of Japan ….. and also to the Tepco workforce that is struggling to maintain control of the … nuclear facilities in such extreme conditions."

David Knox of NRG said for now the company is focused "on our friends and partners in Japan right now. … Our thoughts and prayers go out to them."
There will be plenty of time, in the days and weeks to come, he said, "to assess the impact on nuclear development in America."

Some industry analysts, however, have already begun predicting the expansion’s demise — and are describing it as a favorable financial prospect for NRG.
Others say the Japanese disaster is practically irrelevant. "This almost doesn’t change the fact that new nuclear looks to be a bad investment," said Paul Fremont, a managing director at Jeffries and Company, an industry analyst. "Constellation (Energy) walked away and said keep your loan guarantee, it’s not economic to build."

STP, outside of Bay City in Matagorda County, just a few miles from the coast, is the only such plant in the country with three safety backup systems rather than two, a spokesman said Monday.

STP 1 and 2 are Westinghouse-designed pressurized water reactors that came online in 1987 and ’88, respectively, making them two of the most recent commercial units in the country, said spokesman Buddy Eller. The six units at Fukushima Daiichi are GE and Toshiba-designed boiling water reactors, circa 1971-79.

Eller, while shying away from direct comparisons between the designs, noted that unlike the Fukushima plant’s backup generators, which were destroyed by the tsunami, all of STP’s emergency power sources are in separate, water-tight concrete buildings designed to withstand a category one hurricane, storm surges and earthquakes.

He said the two proposed reactors, Toshiba-designed, would have similar safety features built in.

thamilton(at)express-news

Backers, foes exchange dueling talking points

March 15, 2011

By Tom Fowler
Houston Chronicle

Japan’s ongoing nuclear power disaster may be giving the industry a Chernobyl-sized black eye, but to those in the business not all power plant projects are the same.

Advocates for the South Texas Project nuclear plant about 90 miles southwest of Houston near Bay City point to differences between it and the troubled units at Tokyo Electric Power Co.’s Fukushima Daiichi plant.

The first is location. Fukushima is on the coast in one of the most active seismic zones in the world, while STP is about 11 miles inland from Matagorda Bay in a seismic zone rated 0 — signifying the lowest earthquake probability.

Fukushima’s coastal location probably contributed to the catastrophe there. Officials reported that diesel generators responsible for providing backup power to cooling pumps were swamped by tsunamis that followed last Friday’s massive earthquake.

Fukushima’s coastal location probably contributed to the catastrophe there. Officials reported that diesel generators responsible for providing backup power to cooling pumps were swamped by tsunamis that followed last Friday’s massive earthquake.

3 redundant systems

The South Texas Project is about 29 feet above sea level, spokesman Buddy Eller said, and appears capable of withstanding extreme storm events that are most likely for the region.

A study looking at the possible impacts of a combined Category 5 hurricane storm surge and a 100-year flood on the Colorado River that runs adjacent to the plant site found water levels would rise to just under 28 feet.

The plant also has three separate, redundant diesel back-up systems to run all of its onsite systems, including the reactor cooling. They’re located in steel-reinforced concrete buildings designed to withstand hurricanes and storm surges, said Eller.

There’s also an age difference. The Fukushima units are 30 to 40 years old. South Texas Project Unit 1 went online in 1988 and Unit 2 in 1989, making them the sixth- and fourth-youngest units in the U.S.

The Japanese and Texas plants also use different reactor designs.

In Fukushima’s Advanced Boiling Water Reactors (ABWR), water runs through the nuclear reactor and boils into steam that turns power generation turbines.
In STP’s Pressurized Water Reactor, reactor water is heated under pressure but does not boil, and moves in a closed loop. The hot water in the loop boils water in a separate vessel into steam that runs the electric turbines.

In both designs, steam flows from the turbines to a condenser that cools it into a liquid to repeat cycle.

‘Lessons … the hard way’

South Texas Project operators want to add two new reactors, using an updated version of the ABWR design. Eller noted they would include the same triple-redundant power backup systems and have the same location advantages.

But opponents object to the expansion of the South Texas Project, and asked regulators in a filing this week not to extend the licenses for its existing units.

"We are learning the lessons of nuclear disaster the hard way right now, as the world watches in horror the meltdown of nuclear reactors in Japan," said Karen Hadden, executive director of the Sustainable Energy and Economic Development Coalition.

SEED contends the license extension fails to address adequately the plants’ ability to deal with serious fires and explosions, and fails to justify the extension in light of increased efficiency options.

Also raising concern in some quarters is the involvement in the proposed South Texas expansion of Tokyo Electric – operator of the Fukushima plants.

tom.fowler(at)chron.com

Media Release:
For Immediate Release

March 15, 2011

Contact:
Karen Hadden, SEED Coalition 512-797-8481

Download this release in pdf format for printing.

Austin, Tx The Sustainable Energy and Economic Development (SEED) Coalition filed a petition yesterday with the Nuclear Regulatory Commission (NRC) to intervene in the relicensing of South Texas Project nuclear reactors – Units 1 & 2. The petition asks for a hearing regarding the issues that were raised in the contentions. Citizen comments to the NRC on re-licensing can be submitted until April 1st.

"We are learning the lessons of nuclear disaster the hard way right now, watching the meltdown of nuclear reactors in Japan unfold. Protecting public health and safety and the environment must be prioritized in the U.S. and reactor accidents must be prevented," said Karen Hadden, Executive Director of the SEED Coalition. "No existing U.S. reactors should be relicensed at this time, since metal becomes fatigued over time and aging reactors are more at increasing risk for accidents."

"The NRC should deny relicensing of the South Texas Project reactors, which would allow them to operate an additional 20 years after their retirement dates of 2027 and 2028. The aging reactors were originally meant to run for about 40 years. Running them another 20 years was not in the original plan and may not be safe," said Hadden. The troubled reactors now melting down in Japan are aging reactors, commissioned in the 1970’s. Between 1979, the year of the Three Mile Island accident, until 2006, thirty-eight U.S. nuclear power reactors were shut down for at least a year for safety reasons, according to a Union of Concerned Scientists report. The two existing South Texas Project reactors both had year-long outages in 1993-1994.

SEED Coalition contends that the applicant failed to prove in its relicensing application that it meets the needed safety requirements and failed to take into account the energy savings likely to occur as a result of energy efficiency when they examined the need for power and alternative options.
Summary of Contentions – The license renewal application is inadequate because it:

• Fails to adequately address the Applicant’s capacity to deal with fires and explosions that cause a loss of large areas of the plant. The mitigative strategies for addressing fires and explosions are inadequate to address the consequences of events such as the impacts of large commercial aircraft crashing into the reactors or related facilities.

• Fails to describe the means that would be used to determine radiation exposures to fire and explosion responders.

• Fails to describe the means that would be used to protect fire and explosion responders from excessive radiation exposures.

• Fails to determine the projected decline in demand for electricity attributable to adoption of energy efficient building code in Texas. According to a study by the American Council for an Energy Efficient Economy, building codes that increase energy efficiency may result in an energy savings of approximately 2362 MW by 2023. Such savings would nearly offset the net electrical output of 2500 MW from STP Units 1 & 2.

The applicant for license renewal is STPNOC – the South Texas Nuclear Operating Company. The Matagorda County nuclear reactors are owned by NRG South Texas LP, CPS Energy and the City of Austin. Austin gets 16% of its power from the two units.

For information on how citizens can comment on re-licensing of the reactors call Carmen Fells at 1-800-368-5642, ext. 6337.

Related documents are online at www.nrc.gov/reactors/operating/licensing/renewal/applications/south-texas-project.html.

Download and read SEED’s Petition to Intervene Filed With the NRC

Tuesday, March 15, 2011

Japan nuclear crisis might be death knell for proposed STP expansion.

By Tracy Idell Hamilton
San Antonio Express-News

CPS Energy CEO Doyle Beneby announced Monday that the utility and NRG Energy, the majority partner in the expansion, have mutually agreed to suspend talks over CPS possibly buying power from the two proposed reactors, which were scheduled to be licensed and begin construction in 2012.

Tokyo Electric Power Co., which owns the crippled Fukushima Daiichi plant in Japan, was expected to invest in the STP expansion if the project was awarded a federal loan guarantee.

In addition, NRG has said it would also rely on loan guarantees from the Japanese government to build the new reactors.

It now seems unlikely that either entity will be in a position to invest in the U.S. nuclear industry anytime soon.

CPS’ recent renewed interest in buying additional power from the plant was seen as an important step forward for a project that, while wounded, had continued to lumber forward.

After a nasty lawsuit and war of words between the once-equal partners, NRG has had a difficult time finding new investors and selling the 2,700 megawatts the new units would produce, in part because of the reduced demand for power and the persistent low price of natural gas.

NRG said earlier this year that it would make a final decision about whether to continue investing in the project near the Texas Gulf Coast by the third quarter of this year.

Recent events seemed to buoy the expansion’s chances.

Loan guarantees had moved forward within the Department of Energy. The Nuclear Regulatory Commission’s environmental review found no impacts that would preclude it from issuing a license for construction and operation. Talks with CPS spurred hope that small utilities and municipalities might also buy power from the units.

CPS is a 7.6 percent owner in the proposed expansion and spent about $400 million before it broke off its partnership with NRG, an investor-owned utility. CPS would get $80 million from NRG if the project is awarded a federal loan guarantee.

But as the grim news from Fukushima Daiichi continued on day four of the crisis, calls intensified from U.S. lawmakers and others to slow down the much vaunted, but long troubled nuclear renaissance.

Neither Beneby nor a spokesman for NRG would assess the likelihood that the project is dead.

"Until more information is available, it makes sense to put our discussions on hold," Beneby said. "My first thoughts are for the people of Japan … and also to the Tepco work force that is struggling to maintain control of the Fukushima nuclear facilities in such extreme conditions."

David Knox of NRG said for now the company is focused "on our friends and partners in Japan right now. We work with them quite closely and our thoughts and prayers go out to them."

There will be plenty of time "to assess the impact on nuclear development in America," he said.

Better off financially

Some industry analysts, however, have already begun predicting the expansion’s demise — and are describing it as a favorable financial prospect for NRG.

"Given the lower overall probability of STP (expansion)," UBS Utilities said in an analyst report Monday, "we see positive implications for NRG shares."

Others think ongoing efforts to stop the expansion from being licensed could prevail.

One contention that the anti-nuclear group SEED Coalition has raised, and which was recently accepted for a full hearing by the Atomic Safety and Licensing Board, is that of "co-location."

"We’re seeing now the nightmare that can result from locating plants so close together," said Karen Hadden, SEED’s executive director. "It’s time we wake up and recognize the inherent dangers of nuclear power."

Others say the Japanese crisis is practically irrelevant.

"This almost doesn’t change the fact that new nuclear looks to be a bad investment," said Paul Fremont, a managing director at Jeffries and Company, an industry analyst. "Constellation (Energy) walked away and said keep your loan guarantee, it’s not economic to build."

Ellen Vancko, the Union of Concerned Scientists’ nuclear energy and climate change project manager, wouldn’t speculate on STP specifically, but she reiterated Fremont’s assessment of the industry as a whole.

"The nuclear industry has been in trouble long before last week," she said, citing declining energy demands, low natural gas prices and Congress’ failure to put a tax on carbon.

Even if the U.S. nuclear industry moves forward, Fremont said, "I would still say the future of (STP) is seriously in doubt."

CPS owns 40 percent of the two existing reactors at STP; NRG owns 44 percent and Austin Energy 16 percent.

Beneby said Monday he’s been in close contact with the nuclear operating company that runs the site and that he is comfortable with the existing plant’s safety systems.

STP, which is outside of Bay City in Matagorda County, just a few miles from the coast, is the only one in the country with three safety backup systems rather than two, a spokesman said Monday.

STP 1 and 2 are Westinghouse-designed pressurized water reactors that came online in 1987 and ’88, respectively, making them two of the most recent commercial units in the country, spokesman Buddy Eller said.

The six units at Fukushima Daiichi are GE and Toshiba-designed boiling water reactors, circa 1971-79.

Eller, while shying away from direct comparisons between the designs, noted that, unlike the Fukushima plant’s backup generators, which were destroyed by the tsunami, all of STP’s emergency power sources are in separate, water-tight concrete buildings designed to withstand a Category 1 hurricane, storm surges and earthquakes.

A Category 1 hurricane has wind speeds of 74-95 mph.

"For us, safety is always our highest priority," Eller said. "I can’t get into every level of detail, but we have redundant safety features built in, plus a very integrated, very coordinated emergency response, with multiple drills on all types of disasters."

He said the two proposed reactors, Toshiba-designed advanced boiling water reactors, would have similar safety features.

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.

asherprice(at)statesman.com; 445-3643

Additional information from staff writer Marty Toohey.