Decision time on South Texas Project
San Antonio utility CPS Energy is reviewing its participation in the expansion of a Texas nuclear power plant amid legal warfare between project partners.
San Antonio utility CPS Energy is reviewing its participation in the expansion of a Texas nuclear power plant amid legal warfare between project partners.
The company has been partnering with Nuclear Innovation North America (Nina) in the early stages of a project to build two new large reactors at the South Texas Project (STP) site, but their partnership soured in recent weeks as project costs grew. Nina itself is a joint venture between Toshiba, which would supply the reactors, and NRG Energy which like CPS has a stake in current STP reactors.
CPS said yesterday that it was conducting a "rigourous analysis of price and methodology" on a "contractually mandated" cost estimate delivered by Toshiba. In June 2009 the cost for the two Advanced Boiling Water Reactors (ABWRs) was put at $10 billion excluding financing costs but this rose to $14 billion, causing alarm at CPS, triggering internal investigations, meetings with Toshiba and promises to lower the cost.
In December last year CPS filed a lawsuit to find its responsibilities should it decide to leave the joint venture, in which it has already invested heavily. Nina was surprised by this and responded with lawsuits of its own accusing CPS of improperly delaying the project and requiring it to either officially withdraw or continue to pay ongoing project costs. An application for a restraining order to force CPS Energy to pay project costs for this month was denied by a judge, while CPS said it will continue to honour contractual obligations as well as "vigorously seek to protect its ownership value."
Relations seemed to have hit rock bottom in yesterday's statement from CPS, which accused NRG of escalating the litigation by claiming CPS "should forfeit its $300 million investment thus far and lose all value in the project." The company added that it had "amended its petition and raised significant issues concerning misconduct by Toshiba and NRG Energy."
The new estimate "is structured in a range, and it will take CPS staff several days to analyse the methodology behind the numbers and perform the necessary due diligence," said CPS head Jelynne LeBlanc-Burley. Meanwhile, the next court appearance for the firms will be towards the end of this month.
"Time is of the essence in making the determination of whether CPS is in or out of the project," said Nina CEO Steve Winn, "The Department of Energy is only going to select two projects for loan guarantees. STP was number one and is now second with another project close behind."
Researched and written
by World Nuclear News
