Austin will not join nuclear expansion
Too little information, too much risk, consultant finds

By Kate Alexander
Friday, February 08, 2008

Austin will not invest in a proposed expansion of the South Texas Project nuclear plant despite the city's long-term need for additional electricity, several Austin City Council members said.

As a minority owner of the nuclear plant, Austin could have joined NRG Energy Inc. and San Antonio's CPS Energy in their proposal to build two new reactors at the Matagorda County facility. Austin currently owns 16 percent of the plant.

Austin Energy will recommend to the City Council next week that Austin not participate in the expansion, based on a consultant's analysis of NRG's proposal. Five members of the council reached this week said they will support the Austin Energy recommendation.

Mayor Will Wynn said the consultant found that NRG's cost estimates and time line were "overly optimistic" and Austin would be assuming too much risk based on too little information. NRG estimates the expansion will cost $6 billion and take seven to eight years to complete.

Wynn added that deciding not to invest in the expansion does not preclude Austin from getting electricity from the expanded plant in the future.

"I don't see how we can arbitrarily and unilaterally take nuclear off the table as we struggle with electricity generation for the next 25 to 50 years," Wynn said.

NRG and CPS Energy filed an application with the Nuclear Regulatory Commission in September to build two new reactors at the South Texas Project, doubling the amount of electricity from the plant.

It was the first such application filed in the nation since 1978, a year before the Three Mile Island disaster in 1979.

Austin Energy has not determined precisely how much it would have to chip in at this point, if the council elected to participate. CPS Energy, which owns a 40 percent stake in the South Texas Project, has committed $206 million to pay for preliminary studies for the expansion.

Council Member Lee Leffingwell said it would have been premature to invest in the expansion before Austin Energy could even begin a long-planned public discussion about future power sources.

And he could not support the proposal because there is too much economic uncertainty in addition to the continuing concerns about safety and nuclear waste disposal.

Council Member Mike Martinez said Austin would need a lot more time than the 90 days it was given to respond on an issue of this magnitude.

"There are a lot of questions and a lot more deliberation that will have to take place before we're forced to make this decision," Martinez said.

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