NRG stops investing in South Texas Project Units 3 and 4
OF $481 MILLION INVESTED:
$331 million came from NRG through Nuclear Innovation North America
$150 million were contributed by Toshiba American Nuclear Energy Corp. to NRG.
Read the NRG presentation to SP employees online by clicking on the story.
BAY CITY - NRG Energy announced on Tuesday it has dropped its investment in the South Texas Project development of Units 3 and 4.
NRG, the plant's main investor, had invested $481 million into the development of units 3 and 4.
This retreat by NRG comes as a result of the ongoing nuclear incident in Japan, after the earthquake and tsunami brought down the Fukushima Nuclear Power Plant in March.
"The tragic nuclear incident in Japan has introduced multiple uncertainties around new nuclear development in the United States, which have had the effect of dramatically reducing the probability that STP 3 and 4 can be successfully developed in a timely fashion," said David Crane, president and chief operating officer of NRG.
Ed Halpin, president and chief operating officer for STP, said STP remains committed to operating the plant as safely as possible.
"Our team's commitment and focus remain unchanged - the continued safe and reliable operation of our existing units," he said.
STP employs about 1,200 people.
Crane said NRG continues to believe in the necessity of a U.S. nuclear renaissance and that STP is the best new nuclear development project in the country.
However, the challenges facing U.S. nuclear development now and the large financial resources spent by NRG on the project over the past five years make it impossible for the company to continue financial participation in the development of the STP project, he said.
NRG will cooperate with and support its current partners and any future prospective partners in attempt to develop units 3 and 4 successfully, he said.
In order for the project to get back on track, the following would have to happen:
The Nuclear Regulatory Commission gives STP a clean bill of health, ending current regulatory uncertainty.
The Department of Energy awards a conditional loan guarantee;
STP finds an investor to replace NRG.
STP finds energy companies to purchase future power.
"Despite today's announcement, project activity continues on obtaining a combined construction and operating license and in securing a federal loan guarantee," said Buddy Eller, director of communication for STP.
Last month, Nuclear Innovation North America, the company's nuclear development joint venture with Toshiba American Nuclear Energy Corp., suspended indefinitely all detailed engineering work and pre-construction activities, including reducing the project work force at STP.
Crane said NINA will continue its focus in securing a combined operating license from the Nuclear Regulatory Commission and on obtaining a loan guarantee from the U.S. Department of Energy.
The news was not good for Bay City officials who have worked with STP to benefit from the expansion.
"The expectations of job and community growth through the expansion of units 3 and 4 were something that we were looking forward to although we have known for years that this was a complicated process with many things that could go wrong, " said Mitch Thames, Bay City Chamber of Commerce president.