Archive for the ‘CPS’ Category

Events in Japan cast a long shadow

March 18, 2011

By Nora Ankrum
Austin Chronicle

A week before the earthquake in Japan triggered the world’s worst nuclear emergency in 25 years, the nuclear industry had cause for celebration: The U.S. Nuclear Regulatory Commission announced March 2 that two proposed reactors at the South Texas Project had passed a final environmental impact assessment, bringing the project an important step closer to obtaining a construction and operating license. It was a milestone for the project, which in 2007 was the first in almost 30 years to file an application with the federal agency; nonetheless, it still has a way to go, and hopes for its success – which have hinged on whether utilities like Austin Energy would choose to take part – have now been eclipsed by events on the other side of the world.

Austin Energy owns 16% of the nuclear power plant’s two reactors, which have operated at Matagorda Bay since the late Eighties. NRG Energy owns 40% and is behind the proposal to double the site’s number of reactors, in partnership with Toshiba. NRG hopes to bring the first reactor online in 2016. First, however, the project needs the license, which is dependent on last week’s environmental impact statement as well as completion of a safety evaluation report and a ruling from the federal regulatory commission. NRG Energy also needs customers willing to buy the power. According to Juan Garza, NRG’s president of advanced technology, "It’s important to us that we get [power purchase agreements] … to show the federal government that there is a market for what we’re trying to do." Now, the crisis in Japan – where engineers at several reactors have been struggling to prevent nuclear meltdowns – could make that task difficult. As Reuters reported Monday, both Standard & Poor’s and Moody’s bond rating houses are now making gloomy predictions for U.S. nuclear projects like STP, suggesting they are at risk of rising costs, delays, and even cancellation.

While Austin Energy General Manager Larry Weis said Monday that the crisis in Japan is not affecting his outlook on STP specifically, he acknowledged it is a likely setback for the entire industry. NRG proposed last month that Austin Energy enter into a power purchase agreement for energy expected to eventually come from the new reactors. Such a contract would theoretically shield AE from unknowns by allowing it to pay a fixed price – particularly important given the energy utilities’ rocky past with the South Texas Project, which for many years was plagued with cost overruns and delays. Over time, however, the nuclear power plant has become one of Austin Energy’s lowest-cost resources, and as NRG officials point out, the plant was named one of "America’s Safest Companies" last year. Garza also says that the new units – advanced boiling water reactors – would show vast improvements over the older ones because they’d feature the same modular design as four reactors already built within budget and on time in Japan.

According to NRG spokesman David Knox, none of those four reactors are among those making headlines right now; those units sit farther from the earthquake’s epicenter and are younger, as well. Nonetheless, the events unfolding across the Pacific – the mass evacuation of residents around the affected power plants and the actions of those risking their lives to cool the reactors – make plain the dangers both of living near and of working in a nuclear plant. As pointed out over the weekend by Karen Hadden, executive director of the Sustainable Energy and Economic Development Coalition, "Any reactor can have a meltdown."

The SEED Coalition has joined with other environmental and public interest groups to oppose any Austin Energy involvement with the new reactors, citing both safety and financial concerns. The nuclear commission’s Atomic Safety and Licensing Board has granted hearings on three of the SEED Coalition’s contentions: "fire safety" (asking if the power plant can adequately manage a fire emergency); "co-location" (asking how an emergency at one reactor might affect three others); and "need for power" (the South Texas Project must explain the need for adding 2,700 megawatts of power when new building codes are likely to save nearly as much simply through energy efficiency). The first hearing is likely to take place this fall, says Hadden.

The SEED Coalition is also opposing efforts to extend the operating licenses for the two existing reactors by 20 years (to 2047 and 2048, respectively), citing concerns about a cooling reservoir leak and tritium, a radioactive isotope, found in nearby wells and the Colorado River. The Nuclear Regulatory Commission is accepting public comment on the renewal through April 1. The licensing effort could also be yet another potential casualty of the events in Japan. According to a weekend statement from Moody’s, "issuers that recently filed for a 20-year operating license extension with the NRC are likely to receive additional scrutiny."

While environmental concerns loom large in arguments against the South Texas Project, NRG cites environmental reasons in its favor. "To me, there’s an element of emergency," says Garza, "in that it’s an opportunity to build 2,700 megawatts of capacity that essentially are carbon-free." With Austin Energy’s climate protection goals in mind, NRG has also offered to buy the utility’s share of the coal-burning Fayette Power Project.
So far, AE isn’t biting. While the utility remains open to a nuclear power purchasing agreement, says Weis, it simply isn’t in the position to be "shopping" for baseload resources. With a goal of beginning construction in 2012, NRG officials have expressed hope of securing a deal with AE this summer. Weis, however, says the utility feels no such urgency. Right now, he says, Austin Energy is prioritizing its renewable energy goals, an effort made possible by the recent passage of an affordability forecast allowing the utility to move forward with its generation plan, several years in the making. "It’s kind of a timing thing," says Weis. "We can’t add all these things at the same time."

For more on the South Texas Project’s license renewal, or to make comments, call the Nuclear Regulatory Commission at 301/415-6337 or see austinchronicle.com/s/?e=1162263.

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.

March 9, 2011

The QueQue
San Antonio Current

As city-owned CPS Energy re-enters talks with NRG Energy about possibly buying more deeply into the proposed nuclear power plant expansion they only recently largely extracted themselves from, local and Austin-based activists are fighting a sense of regret and déjà vu. "We wish CPS would have learned the lesson that it should have learned a year ago. I wish we didn’t have to go through this again," Cindy Weehler, of the anti-nuclear group Energía Mía, said at a Tuesday press conference in front of City Hall.

After getting clearance from the CPS Energy Board of Trustees last week, CEO Doyle Beneby is planning to entertain proposals that could once again throw CPS and NRG into deeper partnership, priming the city to either further invest in the group’s two proposed South Texas Project reactors or agree to a long-term power purchasing deal.

Just a year ago, CPS and NRG’s equal partnership in the proposed nukes imploded in a $32-billion lawsuit amid allegations of fraud and manipulation on the part of NRG. quot;The history is so messy, so why would this even be considered again?quot; Weehler asked.

Karen Hadden, director for Texas clean-energy group SEED Coalition, said she has approached city council members and found "no excitementquot; about Beneby’s move. quot;Our concern is these talks just came up so quickly. We’re worried that serious arm-twisting could occur to push this thing through,quot; Hadden said.

March 9, 2011

By Tracy Idell Hamilton
San Antonio Express-News

Anti-nuclear activists gathered in front of City Hall on Tuesday to object to CPS Energy’s recent decision to discuss buying more power from the two reactors that might be add to the South Texas Project.

Two dozen people held banners and signs like "Solar Sí, Nuclear No" as speakers described their disbelief that CPS Energy once again is talking to erstwhile partner NRG Energy about buying more power from the reactors, presuming they’re built.

"We’re outraged," said Amanda Haas of the Esperanza Peace and Justice Center. "Why are we back in the same place we were two years ago?"

Opponents ticked off a litany of reasons CPS should not buy more power, including the specter of increased costs, more nuclear waste and the risk to American taxpayers who would be on the hook if the project defaults after getting federal loan guarantees.

"Nuclear was a bad idea then, and it’s a bad idea now," said Maria Berriozábal, a former city councilwoman and social justice activist. "CPS Energy can expect an angry citizen outcry if they decide to seriously consider NRG’s offer."

NRG hasn’t made an offer just yet.

On Monday, a team of CPS executives met with representatives from the investor-owned utility for the first time since CEO Doyle Beneby received board approval to hear NRG’s pitch to either increase the utility’s investment in the project or buy more power for an agreed-on price for a certain number of years.

CPS owns 7.6 percent of the project, or about 200 megawatts.

Beneby has said he’s more inclined toward a purchase power agreement than an increased share of the project, because it affords the utility more protections.

Beneby says he’s listening to NRG because he needs 851 megawatts to replace those lost when he shutters the Deely coal plants, likely by 2018. He wants those megawatts to be cheap and have lower emissions than coal, and is looking at nuclear, natural gas and other options.

Opponents Tuesday also focused on the messy divorce between CPS and NRG last year, asking why CPS would even consider talking to a group it accused of malfeasance and fraud in a $32 billion lawsuit.

That lawsuit never was fought. Instead, the parties agreed to litigate an earlier suit that sought to clarify CPS’ rights if it chose to pull out of the crumbling nuclear deal. But CPS must now live with the negative portrait it painted of its former partner.

Beneby, who wasn’t with CPS at the time, said the utility has "400 million reasons" to listen to NRG, referring to the roughly $400 million the utility has invested in the expansion.

"That’s a huge amount of money to get nothing for," he said.

He’s been meeting with community groups of all stripes since he arrived last summer; he met with several nuclear opponents Monday and a group of business people last week.

He said their concerns were almost the exact opposite: The business people "wanted to know why I was retiring a coal plant that is producing cheap power, and why CPS entered into solar and wind deals with no public input."

Beneby said he will bring any proposed deal to the Board of Trustees for approval.

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."