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Texas nuke plant deals gaining steam
Jun 4 - McClatchy-Tribune Regional News - Elizabeth Souder The Dallas Morning News In a private room at the back of a sumo wrestling-themed restaurant next to a busy Tokyo train station, a group of American and Japanese men in snappy business suits discuss the future of nuclear power in Texas. "We aren't in this as a science project. We want to build," said Steve Winn, head of development for NRG, a New Jersey company that's the second-largest power generation company in Texas. He leads the team that wants to spend about $5 billion to expand the South Texas Project. If the deal progresses without losing steam, NRG would be one of the first companies to build nuclear reactors in the U.S. in about 20 years, leading a revolution that could more than double the size of Texas' nuclear fleet in the next decade. The Electric Reliability Council of Texas is expecting new nuclear plants to keep the lights on, particularly after plans by TXU Corp. to build a huge fleet of coal plants were shot down by public protest about pollution and greenhouse gases. Expansion plans will test whether Texans unaccustomed to living near nuclear plants will accept a reactor in the neighborhood. So far, many anti-coal activists favor nuclear power because it doesn't pollute or contribute to global warming. But already the anti-nuclear camp is gathering support, complaining about nuclear waste and security. "When you're looking at coal plants vs. nukes, it's sort of like quitting cigarettes and taking up crack," said Tom "Smitty" Smith, head of the Austin office of Public Citizen. And the various proposals for new reactors will test whether investors can build such big, expensive, long-term projects in a deregulated environment, where regulators no longer ensure generation companies turn a profit. The negotiators at the sumo restaurant are counting on government loan guarantees to help with the giant cost and risk of building nuclear reactors in Texas. Big in Texas Texas dominates the Nuclear Energy Institute's list of nearly 30 proposed nuclear plants in the U.S. Six are planned in Texas. Currently the state has four reactors. Power companies want to build nuclear plants in Texas because the state will need more juice in the next few years to keep up with population and economic growth. Nuclear plants produce huge amounts of cheap power consistently and reliably. And a nuclear generation company can sell that power at a relatively high rate on the Texas wholesale power market, which follows expensive natural gas prices. Plus, nuclear plants don't pollute or poof carbon dioxide into the atmosphere. That puts nuclear companies in a nice position, should the U.S. government limit greenhouse gas emissions. NRG wants to build two reactors at the existing South Texas Project, co-owned by NRG, CPS and Austin Energy. STP has two existing reactors, and the new reactors, near Houston, could begin operating as early as 2015. Texas has two other reactors at Comanche Peak, near Glen Rose, owned by TXU. TXU would also like to double the size of its nuclear plant by adding two more reactors using Mitsubishi technology. Those reactors would begin operating between 2015 and 2020. Two companies, Amarillo Power and Exelon Energy, want to build nuclear plants at brand-new locations, known as "greenfield" sites. Exelon Corp., which operates the country's largest fleet of nuclear plants, plans to build one reactor in southeast Texas, south of Houston. The company hasn't named a site yet and hasn't decided on a technology. The plant would start operations in 2015 at the earliest, possibly a few years later. Amarillo Power, a private company started by developer George Chapman, plans a plant near Amarillo. The company is in talks with UniStar Nuclear, a partnership between Constellation Energy and French nuclear plant maker Areva Inc., to build and operate the plant. If the companies go ahead with the project, the plant could begin operating as early as 2016. The technologies Each company would probably use a slightly different technology made by a different vendor. But each technology follows the principle of using a standard plant design, pre-approved by federal regulators, to cut the time it takes to get an operating license and to build the plant. Only NRG has chosen a technology that the Nuclear Regulatory Commission has pre-certified. The other technologies await certification. To jump-start the U.S. nuclear industry, the Department of Energy is offering to guarantee loans and to insure the companies against the risk of regulatory delays. As the department sets up the details of those programs, Texas power companies are stumping for rules that would work for a deregulated, build-at-your-own-risk market. Most experts agree that Texas will get more new nuclear plants if the government guarantees the loans. Without the guarantees, the state might not get any. That's a hot topic for the group at the sumo restaurant. The Americans are responsible for lobbying their government to offer more money for loan guarantees and to limit the time that each loan is guaranteed to the construction period. And the Japanese are to ask the government-owned Japan Bank for International Cooperation to offer loans to the project, making an exception to a rule that the bank may only support Japanese exports to developing countries. Neither government has definitively granted the requests. The past Texas might represent the future of nuclear, and it certainly represents the past. The most recent nuclear plant built in the U.S. is Comanche Peak, finished in 1993. The plant, owned by TXU, took 20 years to build and cost $11 billion, 12 times the initial estimate. The problem with the last generation of nuclear is that each plant was a custom design, made especially for the site and the operator. And often engineers changed the design during construction, further lengthening the projects. Since the U.S. took a break from starting work on new nuclear plants after an accident at Pennsylvania's Three Mile Island nuclear plant in 1979, the industry has changed. Now vendors have cookie-cutter designs that they can erect much more quickly. And that means a better prediction of project costs. Consider the world's largest nuclear power plant, the Kashiwazaki Kariwa Nuclear Power Station on the shore of the Sea of Japan, northwest of Tokyo. The most recent of the seven reactors at the plant was completed in 1997 and took about five years to build. That reactor uses the same technology that NRG wants to use, the advanced boiling water reactor technology supplied by Hitachi. The Japanese technology conglomerate has developed a method of building nuclear plants by making big modules in a factory, shipping them to the plant site and bolting them together, sort of like a prefab building. The method has shaved years off the building time, and Hitachi engineers think they can build a plant even faster now. Several of the negotiators with NRG and CPS Energy at the sumo restaurant said they'd spent a day touring the giant nuclear facility, operated by Tokyo Electric Power Co. They laughed about the weird safety jumpsuits they had to wear to crawl around some inner areas of the plant -- this wasn't the kind of plant tour given to schoolchildren on field trips. (The usual plant tour takes about an hour, and tour guides only ask people to change their shoes and wear plastic-soled slippers to go inside the reactor building. Most people only get to see the deep, spooky pool where long rods of spent fuel are stored and the platform on top of the reactor, which looks like a brightly lit roller rink that shakes a bit as the plant operates.) CPS, the San Antonio city-owned power company, hasn't yet decided whether to invest in the deal. Neither has Austin Energy, which owns part of the South Texas Project. But the Austin municipal utility hasn't sent any officials to Japan. "We're in the process of looking at that project. We have not made a final decision," said Austin Energy spokesman Ed Clark. He acknowledged that nuclear power is controversial among the power company's customers. "Let me say this," he added: "This is Austin." In my back yard? Nuclear power executives like to cite polls that show most Americans support nuclear power plants. But off the record, they question whether people would accept a nuclear reactor in their own neighborhood. So the real test of Texans' sentiment about nuclear power will come when Exelon announces a location for its plant. The company is considering sites south of Houston, where no nuclear plant exists, though people there are accustomed to refineries and other heavy industry. "We're also interested in Texas because the acceptance of nuclear in Texas, at least at this point, appears to be favorable, at least based on research we've done," said Thomas S. O'Neill, vice president of new development for Exelon. The companies point out that nuclear plants bring jobs to a community -- and not just jobs to operate the plants themselves. Hitachi is looking for a plant to make parts for the South Texas Project expansion. NRG said it will need a place to train plant operators and is considering a partnership with a Texas university. Executives with each of the companies say they expect the government to have a solution for storing nuclear waste by the time their plants start creating it. These days, nuclear plants store spent fuel on site as Nevada lawmakers continue to block development of the Yucca Mountain Repository. So far, some of the most influential people who opposed the TXU coal plants are publicly supporting nuclear. "The issues of dealing with the spent fuel now appear, for most scientists and many environmentalists, to be less substantial than additional greenhouse gas emissions," said Houston Mayor Bill White, who along with Dallas Mayor Laura Miller campaigned against building traditional coal-fired plants. In speeches against coal pollution, Ms. Miller often suggested TXU consider nuclear. She liked to point out that she wears her Comanche Peak baseball cap while jogging each morning. And Container Store founder Garrett Boone supports nuclear. He's one of the founders of Texas Business for Clean Air, a group of high-profile business leaders that opposed the coal plants. "We very much feel that nuclear has to be a significant part of the energy mix. If one is truly serious about global warming, it is the only carbon-free alternative we have right now," he said. They've diverged from consumer advocate Public Citizen, a fellow anti-coal-pollution group. Mr. Smith, head of Public Citizen's Texas office, said nuclear waste is dangerous and the reactors are vulnerable to terrorists. "The dangers of nuclear power are so long-lived that it is not a risk that we should take when there are far cheaper alternatives that don't have the risks associated," he said. He added that each week, his office takes more calls from people worried about new nuclear plants in Texas. Now they're getting three or four calls a week. "It's reminiscent of the coal fight. First it was a trickle, then it was a torrent," he said. |