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NRG Energy slows down plans to expand in Bay City

By Dianna Wray
March 23, 2011 at 11:02 p.m.
Updated March 22, 2011 at 10:23 p.m.


The South Texas Project nuclear expansion in Bay City has been slowed down in the wake of the nuclear disaster in Japan.

The entire nuclear power industry gave a shudder as the disaster at the Fukushima Daiichi unfolded two weeks ago, and the Nuclear Regulatory Commission has been looking at safety regulations at nuclear power plants across the country.

Nuclear Innovation of North America LLC, a nuclear development company jointly owned by NRG Energy Inc. and Toshiba Corporation, announced that the planned expansion of the plant has been slowed while they wait for the NRC to come back with any regulatory changes, NRG Energy communications director David Knox said.

"Basically, we know the Nuclear Regulatory Commission is going to be doing a review of what the lessons of Fukushima are, and how we can make our plants even stronger," Knox said. "They're going to be doing this review, and the review could cause the requirements on how the plants are permitted to change."

Knox said the NRC review may change how they will construct the additional two units in Bay City.

Plans call for construction to start in 2012, with the new units operational by 2016.

"As we're moving forward to where we're doing this detailed engineering, if the requirements are going to change, why not wait until this is settled?"

Knox noted that this an attitude being adopted by the entire U.S. nuclear industry, but that he had faith in the NRC.

"The NRC is very interested in having the safest possible plants, but they know the capabilities of the industry, and they know how well it has performed, and we are anticipating that," Knox said.

Knox said the NRC review shouldn't slow down the progress on the expansion, unless it is a drawn-out review.

"If this is a two-week or two-month review, that's something the project can take, but if this is a six-month review this could impact the project," Knox said.

The STP expansion project is also waiting to see if Tokyo Electric Power Company, the owners of Fukushima Daiichi, still plan to invest in the project.

The company has an agreement to buy 10 to 20 percent of NRG's stake in the investment, Knox said.

"Our goal is to own 40 to 50 percent of the project. If they don't buy it, then we need to revisit investors before we make motions to proceed," Knox said.

While there's been no indication that the company would withdraw from the agreement, Knox said, it seems prudent to make sure TEPC still plans to invest.

To make the project happen, they need to be certain of the NRC's regulatory process and that they will get the loan guarantees and that the expansion will actually cost $10 billion, as estimated.

"We must have that certainty, and that's what we're slowing down to make sure of," he said.

Either way, Knox said the project is on a timetable and that the decision of whether to move forward will be made, as promised in September.

"We're on timeline, we've made a commitment to our shareholders that we would make a decision on the status of the expansion by the third quarter, and we are going to stand by that," Knox said.

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