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Constellation, officials working to keep CC3 project going

Wednesday, Oct. 20, 2010

By Meghan Russell,
Staff writer
Southern Maryland Newspapers Online

The nuclear ball is now in EDF’s court.

A letter from Constellation Energy to its UniStar Nuclear Energy partner went public on Friday as the company announced its proposal to sell its 50 percent investment of its nuclear venture in the hopes that Calvert Cliffs Nuclear Power Plant’s third reactor can move forward.

In the letter to Constellation’s partner, Electricite de France (EDF) SA, company vice Chairman Michael J. Wallace proposed transferring its 50 percent interest in UniStar, including the land where the third reactor is set to be built, for just $1. The company requested reimbursement of $117 million in generic development costs for the U.S. Evolutionary Power Reactor (EPR), just a fraction of the two companies’ joint investment of $817 million in the Calvert Cliffs 3 venture.

In addition, Constellation pledged its full support and cooperation in seeing through the transfer’s terms and assisting EDF however it can in bringing the reactor to Calvert.

"Having invested considerable time and resources into our partnership, we agree with you that there is significant market value in UniStar," Wallace’s letter states. "Our proposal provides a solution by which our companies can quickly resolve UniStar’s ownership structure, so that EDF can preserve and maximize UniStar’s value and advance the prospects of CC3 with confidence."

In the terms listed at the letter’s end, Wallace said that Constellation will continue to provide administrative services for a period of up to one year after the deal’s closing, when new terms will be discussed.

Furthermore, the option to sell $2 billion of fossil fuel energy to EDF — an issue that has raised concerns over their partnership’s future — is a separate issue altogether, Wallace continued, and Constellation will address it as such: "That commercial dispute should not be used to hold the prospect of CC3 hostage."

But even if EDF agreed to take the project under its wing, many skeptics, like the Nuclear Information and Resource Service, doubt the conditions are right for a "nuclear renaissance" and believe Calvert Cliffs 3 was doomed from the start.

"Calvert Cliffs’ demise was a result of several factors, the most important of which were: soaring construction cost estimates; increased and aggressive competition from other generation sources; falling electrical demand coupled with increased energy efficiency programs; serious reactor design deficiencies; and overreliance on government handouts," NIRS Executive Director Michael Marriotte said in a press release Thursday. "The Office of Management and Budget and the Department of Energy are responsible for none of these factors. In fact, their loan offer for Calvert Cliffs 3 was overly generous considering the overwhelming array of market forces and roadblocks facing this project."

Marriotte said the "simple reality" is that a nuclear renaissance in the U.S. will be impossible if new reactors remain too expensive to build and natural gas remains "dirt cheap" while renewable energy costs continue to decline and consumer demand remains on a downward spiral. The same forces acting against Calvert Cliffs will most likely cause the remaining nuclear reactor loan guarantees to fall through for the South Texas Project and Virgil C. Summer Nuclear Station reactor project in South Carolina as well.

Peter Bradford, a commissioner with the Nuclear Regulatory Commission and the former chairman of the New York State Public Service Commission, added, "The four pillars of the nuclear revival — underestimated costs, ignored risks, political ballyhoo and prodigious but inadequate subsidies — now make clear that we are dealing not with a renaissance but with a bubble. The main remaining question is just how much taxpayer money will go into keeping it inflated."

Constellation addressed the unfavorable conditions in its letter to EDF but also acknowledged a herd of Calvert Cliffs 3 supporters, hoping they might continue to fight for the project.

"We have had the firm support of the Maryland Congressional delegation, the Governor, our allies in labor and the public officials and the people of Calvert County," Wallace wrote. "House Majority Leader Steny Hoyer (D-Md., 5th), in particular, has been a stalwart supporter of the project and has done and will continue to do all he can to improve conditions for the renaissance of new nuclear. And for this we are very grateful."

Hoyer said he is also optimistic about the third reactor. He, along with Gov. Martin O’Malley and Sens. Barbara A. Mikulski (D-Md.) and Benjamin L. Cardin (D-Md.), sent a letter to Mayo A. Shattuck III, president and CEO of Constellation, and Henri Proglio, chairman and CEO of EDF, on Friday.

The letter urged the two companies to engage in active negations immediately regarding Calvert Cliffs 3.

"The [third reactor] is extremely important to the State of Maryland, and especially the Fifth District, for its promise to create jobs and invest in the next generation of nuclear energy," Hoyer said in a press release.

Cardin, who also sees merit in the new nuclear future, said, "The quality jobs and economic opportunities for communities in Maryland are undeniable, but the benefits that next-generation nuclear facilities like this will bring to our nation are even greater. Nuclear energy is an essential component of a new, clean-energy economy and an energy-independent United States. Projects like [Calvert Cliffs 3] will strengthen our national security, economic security and our environment."

Former Republican governor and gubernatorial candidate Robert L. Ehrlich, Jr. has touted the project during campaign stops in Southern Maryland and has used its deterioration as further fuel in his run against O’Malley.

Ehrlich met last Thursday with several local business owners, mostly from the Lusby and Solomons area, who had been anticipating the arrival of 4,000 new workers and made plans to either expand or hire new employees. Now, along with Unit 3, those plans are on hold.

"Just last week, Martin O’Malley had the ear of the President of the United States – an extraordinary opportunity to make a personal appeal in support of this project," Ehrlich said in a statement released last Friday. "Instead, he put his reelection campaign ahead of the interests of everyday Marylanders who would benefit from the thousands of new jobs associated with this project."

Del. Anthony J. O’Donnell (R-Calvert, St. Mary’s), congressional candidate Charles Lollar and Calvert County Commissioner Jerry Clark (R) joined Ehrlich at the roundtable discussion in Solomons.

"We’re in desperate need of new revenues," O’Donnell said Monday night following a candidate forum in Leonardtown. "The business community is afraid they’ll need to pick up the slack through their taxes."

O’Donnell placed the blame of the project’s downfall on O’Malley, saying the governor’s attempts to extract rate relief from Constellation while the Maryland Public Service Commission reviewed the company’s merger with EDF delayed the project eight months. "We shouldn’t be here," O’Donnell said. "My assessment is this patient is on life support, but there’s a faint pulse."

mrussell(at)somdnews.com

October 20, 2010

Media Release

Oral Argument Oct. 21 In Bay City, Texas

Download this press release in pdf format for printing

Bay City, Texas Opponents of two proposed South Texas Project nuclear reactors will present their case at an Atomic Safety and Licensing Board (ASLB) panel on Oct. 21st in Bay City, Texas. The hearing will begin at 9 a.m. in the Bay City Civic Center, 201 7th St. in Bay City.

Attorney Bob Eye will represent SEED Coalition, Public Citizen and the South Texas Association for Responsible Energy. Among the concerns that will be raised in the South Texas Project Combined License (COL) proceeding is the co-location issue -would other reactors at the site be able to operate safely if a fire or a serious accident damaged one or more reactors? Another issue at the hearing will be the failure of the license applicant, NRG, to analyze cleaner, cheaper and safer energy alternatives.

New contentions have been filed based on the Draft Environmental Impact Statement for the proposed reactors. Twenty new contentions focus on the inadequate analysis of the need for power (14 subparts), alternatives to nuclear power to meet the stated purpose and need, and the effects of global warming on plant water use and water availability.

"Nuclear power is the most expensive way to generate electricity. Costs for proposed South Texas Project nuclear reactors have already tripled. The $18.2 billion estimate doesn’t include cost overruns from delay and construction problems, costs of radioactive waste disposal or decommissioning reactors. Nuclear reactors simply don’t make sense financially," said Karen Hadden, Director of the Sustainable Energy and Economic Development (SEED) Coalition. "In fact, Constellation Energy just withdrew their license application for a Maryland nuclear reactor due to high costs."

The Electric Reliability Council of Texas (ERCOT) 2009 State of the Market report says "Estimated net revenues for nuclear and coal resources were also insufficient to support new entry in 2009."

The Associated Press recently reported, "Even companies that are finalists for federal loan guarantees, NRG Energy and Constellation Energy, announced recently that they have nearly stopped spending on their projects… Analysts say low natural gas prices are making the project uneconomic. NRG chief executive David Crane said he will not pursue the company’s two-reactor project in South Texas if gas prices stay low, even if his project is offered a loan guarantee."

"Austin decided not to participate in the reactor project due to expected delay and cost overruns. San Antonio’s CPS Energy got a good look at the return on investment and pulled way back. The Atomic Safety and Licensing Board needs to realize that there are safer, more affordable ways to supply our power," said David Power, an expert in the case.

"Today Texas has excess energy capacity and leads the nation in wind generation. Solar costs are plummeting and cheap gas can be used to back up renewable solar and wind power. The proposed reactors are a hazard to our health, safety and our pocketbooks," said Power.

The ASLB is the independent body within the NRC that presides over proceedings involving the licensing of civilian nuclear facilities, such as nuclear power plants.

The session is open for public observation, but participation will be limited to the parties admitted to the proceeding, the public interest groups, the applicant – STP Nuclear Operating Company – and NRC staff. Early arrival is suggested to allow for security screening for all members of the public interested in attending.

STP Nuclear Operating Company submitted a COL application Sept. 20, 2007, seeking permission to construct and operate two new nuclear reactors at the South Texas Project site near Bay City. The ASLB granted intervenor status and an opportunity for a hearing to the Sustainable Energy and Economic Development SEED Coalition, the South Texas Association for Responsible Energy, and Public Citizen.

The groups have submitted objections, or contentions, challenging the COL application. The ASLB panel will hear oral argument on several matters: two motions to dismiss the groups’ admitted contention; the groups’ request to file additional contentions based on the NRC staff’s draft Environmental Impact Statement; and the groups’ request for access to a draft NRC document regarding new reactor reviews.

February 6, 2008
FuelFix

When the South Texas Project (the nuclear plant near Bay City) was being built in the 1970s and 1980s one of its most persistent opponents was San Antonio lawyer Lanny Sinkin.

As the voice for groups like Citizens Concerned About Nuclear Power Inc. and South Texas Cancellation Campaign he badgered regulators and the plant owners at every chance, getting the Nuclear Regulatory Commission to allow arguments in its formal hearings on the competence of the owner, HL&P, and its contractors, Bechtel and Ebasco.

Tom "Smitty" Smith, the current head of the Texas office of Public Citizen, says Sinkin played a big part in getting reports on the poor quality of construction at the plant to see the light of day. That led to a number of improvements at the plant.

Sinkin’s would put it another way. They accused him of unleashing "a blizzard of paper" in a mischievous and groundless attempt to thwart the project.

"He is just in the wrong forum with the wrong material and the wrong information," said Maurice Axelrad of Washington, D.C. in a May 1985 Chronicle article.

Sinkin now lives in Hawaii but he was back in Texas this week to help activists fire up their campaign against the planned expansion at the plant. He attended the public hearings in Bay City on Tuesday, sitting in a corner of the room typing away on a laptop.

Sinkin said the Nuclear Regulatory Commission’s application process has changed significantly from the 1970s and 1980s. The process allowing the public to intervene in the process is much more difficult he said, with a shorter time window for groups to sign up as interested parties (Feb. 25) and greater specificity required in their complaints.

"There’s no way I could do today what we did back then," Sinkin said Tuesday.

He heads back to Hawaii soon but, likely to the chagrin of the plant operators, will be back later this year.

Our colleagues at the San Antonio Express-News (a fellow Hearst newspaper) also covered the event.

October 6, 2010

By Tracy Idell Hamilton
San Antonio Express-News

CPS Energy today will announce a solar partnership with SunEdison that will result in three 10-megawatt installations being built in the utility’s service area, the Express-News has learned.

The three separate ground-mounted solar photovoltaic arrays are to in use by 2012, and CPS has agreed to buy all the power they generate for the next 25 years, the utility confirmed. Locations have not been determined.

Sources say CPS will pay 15 cents per kilowatt hour for the energy — less than the utility’s other major solar agreement for 14 megawatts from the Blue Wing Solar Farm in southeast Bexar County. That project, owned by Duke Energy, is in the testing phase and should be fully operational by year’s end.

A CPS spokeswoman would not confirm the price, but CEO Doyle Beneby called the deal a good one for the utility.

"The market for solar energy continues to improve, and this agreement takes advantage of that," he said.

The average cost to customers for all the power CPS produces — from coal, natural gas, nuclear and renewables — is about 9.5 cents per kilowatt hour.

SunEdison is the country’s largest solar energy services provider, managing more than 108 megawatts of solar power plants in the U.S. and Europe.

It was founded in 2003 by Jigar Shah, who has spoken at forums in San Antonio several times. Shah subsequently sold the company.

As part of its latest solar deal, CPS has asked the company to collaborate on research and development, likely with the newly formed Texas Sustainable Energy Research Institute. CPS has committed $50 million to Texas SERI over the next decade for research on issues facing the utility, such as carbon capture and energy storage.

An education center at one of the installations also is planned, along with a community outreach program.

The investment in local facilities and research "will provide a great energy and economic benefit to San Antonio," said Mayor Julián Castro, who sits on the utility’s board and has been a tireless proponent of bringing more clean energy investment to the city.

"It’s innovative, forward-thinking and helps put San Antonio further on the map in the new energy economy," Castro said.

The additional 30 megawatts essentially will replace the 27 megawatts CPS planned to buy from Tessera Solar, which recently was forced to delay its project for lack of funding. The solar thermal plant, which uses mirrors to concentrate the sun’s power, was to be built outside of Marfa.

When CPS signed a 20-year agreement to buy Tessera’s power in June 2009, it was the utility’s first purchase of solar energy, and the first step toward its goal of acquiring 100 megawatts of solar capacity.

That’s part of the utility’s effort to secure 1,500 megawatts of renewable energy capacity by 2020. CPS already has agreements in place for 850 megawatts of wind power, in West Texas and along the coast.

"We’re very excited about the presence of a major solar company and the size of the installation," said Lanny Sinkin, executive director of Solar San Antonio. "Their commitment to an energy center and additional research and development is very encouraging."

Beneby is bullish on CPS’ continued investment in solar energy, which also includes rebates for up to 50 percent of the cost of home solar systems.

"With 300 days of sunshine here each year," he said, "it just makes sense that San Antonio becomes a hub for solar energy in the U.S."

Thursday, Oct. 7, 2010

Tom ‘Smitty’ Smith, LOCAL CONTRIBUTOR
Austin American-Statesman

As the Texas population booms, residents worry about where the water will come from to provide for all of our needs. What many don’t realize is that power plants together are the single largest user of water in America, and adding plants is the single greatest threat to our dwindling water supply.

Three proposed power plants — two in Matagorda County and one in Corpus Christi — threaten to drain as much as 26 billion gallons of water each year from the Colorado River. Doing so will threaten levels in Lake Travis and other Highland Lakes.

The LCRA board is considering a contract for water for one of these proposed units in the next several months and now is the time to call the board and ask them to plug the drain on Lake Travis by denying this contract.

A little background: In 1942, the LCRA constructed Mansfield Dam and created Lake Travis to serve as a reservoir supplying freshwater for communities along the Colorado. When it was created, Lake Travis and some of the other Highland Lakes were designated “variable level” lakes. This means that they can be partially or fully drained when communities or industries located downstream need water.

Residents and businesses on Lake Travis have long understood that relationship, and though they don’t always like it, they have mostly learned to live with it. In 2009, that relationship was put to the test when an extended drought required lake levels to drop by over 50 feet, bringing them to the third lowest they’ve ever been. Businesses on Lake Travis were hurt badly, and LCRA staff called for a moratorium on new water contracts.

Now the relationship between lake users and downstream industries is being tested again. Three proposed plants in southeast Texas — one petcoke, one coal and petcoke, and a pair of nuclear reactors — could suck up the dwindling water supply, leaving local businesses and homeowners with sour investments.

What makes the situation truly intolerable is not only what it could do to local businesses and homeowners, but that it may be entirely unnecessary.

Each year the Public Utility Commission performs a "State of the Market" assessment which discusses electricity supply and demand in the state. In the report for 2009, the agency clearly stated that there was no room in the electricity market for new coal, gas or nuclear power plants. Those plants are generally large-scale and the truth is that Texas produces more electricity than it needs.

What’s more, energy efficiency and renewable technologies do not require significant quantities of water. While coal, petcoke and nuclear plants all need to be cooled, wind turbines and solar panels do not. Those technologies keep getting cheaper, and they create far more jobs for every dollar invested than do power plants.

With renewable energy technologies declining in price, Texas producing more electricity than it needs and the state unemployment rate beginning to climb, doesn’t it make sense for us to avoid unneeded and water-intensive power plants and instead continue to develop clean energy technologies that could help us solve problems with air pollution, water scarcity and an uncertain economic future?

Of course it does. Businesses and individuals who rely on, live on and play on Lake Travis are coming together for a benefit event at the Iguana Grill on Sunday. Attendees will learn what we can do to protect lake levels which generate so much revenue for our local economy while helping to make Austin and Central Texas one of the best places to live.

Smith is the Texas director of Public Citizen. To learn about Sunday’s event, visit PowerPlantsSuck.org.