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Posts Tagged ‘Constellation Energy’

IS OBAMA ADMINISTRATION HOLDING UP NRG LOAN GUARANTEE IN FAVOR OF CALVERT CLIFFS?

Friday, December 31st, 2010

Nuclear Townhall
December 31, 2010

 

An unidentified source in a French news story says the Obama Administration may be holding back from awarding a federal loan guarantee to NRG’s South Texas project because it is in the Lone Star State. 

"According to one source, the Obama administration would prefer the loan guarantee to go to the Calvert Cliffs project in Maryland, which is a Democratic state, rather than to NRG’s project in largely Republican Texas," says this report from Agence France-Presse.  "According to the same source the DoE would also prefer the money go to EDF to avoid the risk of making the US nuclear sector over-reliant on Japanese technology."

The story is a boilerplate review for French readers spelling out Electricite de France’s difficulties in reviving Calvert Cliffs after its partner, Constellation Energy, dropped off the project two month ago. The comment comes far down near the end of the story.  Still, it has a ring of plausibility, since the Obama Administration is about to square off with Texas over the authority to issue air quality permits regulating carbon, beginning January 2.  On the other hand, it’s hard to see why relying on Japanese technology is any different from relying on French technology.  The real problem is that there is very little American technology remaining since the roadblocks to nuclear development erected in the past 30 years have driven most of the industry offshore.

Constellation walked away from Calvert Cliffs after the Congressional Budget Office estimated the chances of a loan default at 50 percent and asked a $700 million fee in compensation.  EDF has tried to revive the project but must find an American partner to satisfy a 1950s law saying non-American companies cannot own more than half of a commercial reactor.  NRG’s South Texas project has had its own troubles, with the City of San Antonio pulling out of the project when it became too expensive.  NRG is attempting to build two Westinghouse Advanced Boiling Water Reactors, a technology that is not the most advanced but has an old approval from the Nuclear Regulatory Commission.  The more advanced technology, the Westinghouse-Toshiba AP1000, now under construction at four sites in China, is still under review at the NRC after six years.   EDF’s Calvert Cliffs project would be an Areva’s U.S. Evolutionary Power Reactor (EPR), a duplicate of the European Power Reactor that Areva is constructing in France and Finland.  The only remaining U.S. design, General Electric’s Advanced Boiling Water Reactor, is now being marketed in conjunction with Hitachi.

If the Obama Administration wants to promote American nuclear technology, it will have to do more than block loan guarantees at South Texas.

 

Read more at Agence France Presse

 

DOE/OMB SHOCK: Feds try to get Constellation Back to the Loan Guarantee Table

Tuesday, October 12th, 2010

Platts is reporting via agency spokespeople that the U.S. Department of Energy and Office of Management and Budget feel hornswoggled by Constellation Energy’s late Friday afternoon withdrawal by letter from the Obama Administration’s loan guarantee sweepstakes for a new nuclear reactor at Maryland’s Calvert Cliffs nuclear site.

The White House and the US Department of Energy were purportedly "on the verge of
offering UniStar a new set of loan-guarantee terms," Platts says.

"On Friday, as DOE received this letter, literally, almost simultaneously, DOE and OMB had a whole new set of modified terms to go back to them with," OMB spokesman Kenneth Baer told Platts. "This was very surprising to us, because we were in the middle of a dialogue with them, and they seemed to cut it off."

"We hope that Constellation, or their other business partners in this project, will consider moving forward and working with us in [continuing to find] terms which are good for them and good for the taxpayer," Baer said.

Baer’s DOE counterpart, spokeswoman Stephanie Mueller echoed the sentiment to Platts. "We were surprised to get the letter about Constellation dropping out of this process since DOE has been working closely with them on this complex transaction and even on the day they sent this news had a modified set of loan terms that responded to the concerns they had," Mueller said.

In another development Platts is reporting via Senator Jeff Bingaman’s spokesman, Bill Wicker, that "although DOE has made great strides in improving the process in the last year, there still are too many steps of review with OMB and Treasury; those two agencies simply are not coordinating well enough."

Read more at Platts


TAPS FOR SENATE ENERGY EFFORT

Wednesday, August 4th, 2010

The Obama Administration’s 18-month effort to pass significant climate and energy legislation effectively ended yesterday as Senate Majority Leader Harry Reid made it official that he will not introduce a truncated energy bill for a vote before the scheduled Senate August recess.

The anticipated bill had limited climate-related  aspects.  Its main concern was the BP oil spill — removing liability caps and tightening permitting for offshore drilling. The effect, according to Senators from the Gulf states, would be to turn the Administration’s temporary moratorium on drilling in the Gulf into a permanent state of affairs. Opposition from Republicans and Gulf State Senators convinced Reid he could not get the 60 votes needed to advance the bill.

Representatives of the offshore oil industry breathed a sigh of relief but said that the six-month moratorium on drilling imposed by the Obama Administration is already having a devastating impact. "This is a very competitive international market," said Jack Victory, a spokesman for Transocean, the Swiss company whose rig blew up at Deepwater Horizon. "These rigs are in demand all over the world.  Several have already left the Gulf for Egypt, Brazil and West Africa.  It’ll be a long time before they come back."

Although the drilling slowdown will not have any immediate impact, it could start to show up in diminishing production within a few years.  One-third of domestic oil production now comes from the Gulf and domestic production only provides one-third of the U.S.’s oil consumption.

Nuclear energy sources generally conclude that the demise of an energy bill with carbon pricing put more more pressure on a policy lift from federal loan guarantees, which also seem to be grinding to a halt as well. This week both NRG and Constellation Energy slashed plans for spending on new projects in anticipation that the Department of Energy would not be making any more awards in the near future.

TWO MAJOR PROJECTS CUT BACK AS LOAN GUARANTEES STALL

Wednesday, August 4th, 2010

Two of the most promising new build projects announced severe cutbacks this week as hope that the Department of Energy will soon announce any new loan guarantees begins to fade.

NRG, of Princeton, N.J., announced it would reduce monthly spending to $1.5 million a month, down 95 percent from two months ago, at its South Texas project near San Antonio. Total spending for the year will drop from an anticipated $302 million to $186 million. Although CEO David Crane said he is still confident the project will go forward, NRG is obviously pulling back on its commitment. NRG stock rose 3 percent after the announcement.

Constellation Energy in Maryland made virtually the same announcement last week when it said it is suspending all new spending on Calvert Cliffs III until the loan guarantee issue is resolved. Constellation even suggested it might drop the project altogether if a decision from the Department of Energy is not forthcoming by the end of the year.

EDF, the French national utility that is Constellation’s partner on the project, reported a big drop in earnings last week, mainly because of losses on Calvert Cliffs. The two companies have already spent $600 million on the project.

Hopes that any new loan guarantees may be forthcoming from DOE are guarded. The Department has committed about $9 billion of its authorized $18.5 billion to the Vogtle Plant in Georgia, being build by Southern Nuclear Company.  The remaining loan guarantee pool is not sufficient to fund both South Texas and Calvert Cliffs — forcing DOE to chose between the two projects or further delay any announcement until FY2011 budgets are finalized with fresh funding. 

In February President Obama proposed raising the loan guarantee fund to $54 billion but Congress has not yet fully acted on his suggestion. The Senate nixed an additional $9 billion in loan guarantee funding from a proposed FY2010 supplemental funding bill.

Read more at the WSJ…

…and the Baltimore Sun

NEWSPAPER FINDS ONE AFRICAN-AMERICAN WHO QUESTIONS NUCLEAR

Tuesday, May 4th, 2010

In a typical bit of journalistic malpractice, the Washington Informer has found one African-American who worries about nuclear power and decided it must be bad for all African-Americans.

The article features Dr. Robert Bullard, referred to as the “Father of Environmental Justice,” who “sees the red flags waving when it comes to the nuclear reactors President Obama has pledged government aid to construct in the town of Shell Bluff which is located in Burke County, Ga.”  The surrounding country is 51 percent Africa-American.

What the article does not mention is that African-Americans form a majority in many areas of the South. (The overall population in Georgia is 28 percent.)  And although the article quotes Ann Lauvergeon of Areva saying the company will be sensitive and Patrick Moore saying reactors are safe, no one ever points out the economic benefits of having a nuclear plant in your community.

Calvert County, Maryland was the second-poorest country in the state until construction of the Calvert Cliffs Reactor. Now it is one of the richest, with low taxes and lavish public facilities, all paid for by the reactor. That is why the entire political establishment of the county favors Constellation Energy’s plans for a new reactor and why county commissioner Wilson Parran – who happens to be African-American – regularly testifies in its favor. Bisconti Research has shown that support for nuclear is almost 20 percent higher in communities with reactors than in those without them. In 2007, the New York State NAACP supported Entergy’s efforts to relicense Indian Point.

 Dr. Bullard began his efforts opposing toxic waste dumps, which certainly tend to be located in poorer neighborhoods. But it would be mistaken to apply this logic automatically to nuclear reactors. And it would be a mistake to report his ideas as broadly representative.

Read more at the Washington Informer

William Tucker