Sunday, March 23, 2008

Hobbs, NM, places its bet for Areva's plant

Industrial revenue bonds are a key feature
Update 05/06/08 Areva chose Idaho Falls for its new plant

Efforts in New Mexico to secure Areva's $2 billion uranium enrichment plant hinge on the use of industrial revenue bonds. According to a report in the Las Cruces Sun, Lea County Commissioners have approved economic incentives that local officials hope will help them as they prepare to make a final pitch next week to Areva.

According to the newspaper all five commissioners voted in favor of issuing industrial revenue bonds for the project, which would basically make the building exempt from property taxes. Even though the county would be issuing the bonds, the company would be held responsible to pay back the bond money.

Commission Chairman Gary Schubert said the bonds are contingent on Areva picking a specific location between Hobbs and Carlsbad. The county also agreed to pay its share in purchasing the property which located at the border of Lea and Eddy counties. The expected purchase price and necessary improvements would run about $2.5 million according to media reports.

A New Mexico State Senator told the newspaper a stable construction workforce with experience would be a key incentive. Currently, Louisiana Energy Services (LES) is building a uranium enrichment plant in Eunice, NM. The deal here is that about the time that plant is done, Areva would be ready to break ground.

Sen. Carroll Leavell, R-Jal, said LES and Areva could prosper in the area together.

"It would take Areva three years to get the [NRC] license, and that will give LES time to finish construction," he said. "Areva would be able to use the same contractors, and after they finish at LES they could move over to the Areva job if it works the way we see it working."

Leavell may have a logical approach to the situation, but when Areva briefed the NRC on its plans in May 2007, it was looking at a much faster path to getting a license from the agency by mid-2010. Meeting notes on NRC's web site indicate the agency realized it would be pushed to speed up the licensing process.

The workforce angle doesn't look good if two plants are competing for the same people. If LES is still under construction when Areva breaks ground, it is likely costs will go up for both plants.

Is Andrews in or Out?

The Las Cruces Sun reports that Economic Development Corporation of Lea County executive director Bethe Cunningham and three others presented a proposal to the commission that mirrored tax breaks given to Louisiana Energy Services.,

At one time there were reports Hobbs, NM, would work with Andrews County, TX, to jointly seek to secure the Areva plant at a location that would benefit both communities. However, there is nothing in the most recent press report that confirms this is still the case.

Meanwhile back in Andrews a television news report on its status as a potential site for the Areva plant generated 400 inquires about jobs according to the local economic development agency.

Other sites waiting for Areva's next move

The other three sites in Idaho, Washington, and Ohio are now waiting for Areva to make its next move. According to statements by Areva's executives a corporate committee will make a decision to select a site by the end of the month.

In Washington Sen. Patty Murray offered an endorsement of the Richland site for the plant. In Idaho two bills passed in record time by the legislature are awaiting signature by Idaho Gov. C.L. "Butch" Otter. In Ohio despite an state government endorsement of Piketon as a site for the Areva plant, a coalition of civic and environmental groups lashed out at Gov. Ted Strickland and the Department of Energy for failure to make progress in cleaning up the site.

For its part Areva has said it will not go where it is not wanted which may take Piketon out of the running. In Idaho community leaders pointed to the outpouring of community support for two proposed GNEP sites at hearings held in Idaho Falls in 2007. In Richalnd, WA, local support was strong, but green groups opposed to the GNEP site there traveled to testify against it from as far away as Portland, OR, and Seattle, WA.

While New Mexico is playing a card that offers an experienced construction workforce, Idaho is looking at how it will support the plant over it's 30-year operational life. With a long history of providing a workforce and community support for nuclear facilities, economic groups in Idaho Falls feel they are as much in the running as any of the other four sites. Richland's strength is similar to Idaho's with regard to workforce qualities and the proposed site is a stone's throw from a nuclear fuel fabrication plant.

Areva has to make a $2 billion decision soon. Which one will it be?

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