It signs on to manage Ft. Calhoun and signs off on plans for a new build in Texas
Exelon (NYSE:EXE) took over the management of the Ft. Calhoun Station which is owned by the Omaha Public Power District (OPPD). The troubled plant hasn’t generated electricity since last Spring when it was safely shut down in response to flooding along the Missouri River. (right)
OPPD has been working through a long list of safety issues raised by enhanced inspections carried out the by the NRC. John Green, a member of the OPPD Board of Directors, told the Omaha news media he is convinced the NRC had lost confidence in the utility’s ability address the safety issues raised by the agency. He said that the NRC was looking for a solution in the form of an outside management effort and that Exelon fits the bill.
It didn't help that Ft. Calhoun was the subject of a bizarre Internet conspiracy theory that it has blown up and that the U.S. government was covering up the alleged disaster. OPPD was slow to address the need to spike the conspiracy theory perhaps on the grounds it was too fantastic to take seriously. Then NRC Chairman Gregory Jaczko personally inspected the plant in June 2011.
Exelon’s ability to matrix in subject matter experts from its huge U.S. fleet of reactors will help address the technical and safety issues. OPPD has hopes of restarting the reactor late this year. Last winter OPPD also cancelled a planned power uprate tell the NRC there were too many technical and safety issues to see the plan through to completion.
OPPD executives have said they are pretty happy about the operational management change. Exelon began working with the utility earlier this year. The new operating services agreement was signed in August.
Bye Bye Victoria
Separately, Exelon told the NRC it is withdrawing its application for an Early Site Permit for up to two new nuclear reactors. The site for the proposed twin 1,350 MW GE-Hitachi ABWRs is near Victoria, TX. Exelon said cheap natural gas and market conditions made the project “uneconomical for the foreseeable future.”
Exelon originally tossed its hat into the Texas market in 2007 with plans to build two 1,500 MW GE-Hitachi ESBWR reactors. However, the Department of Energy (DOE) told the utility, at the time, that the time to market for the uncertified reactor design was too indefinite to qualify it for a federal loan guarantee. Exelon switched horses in November 2008 referencing the ABWR, but by then DOE had already named four other firms to its short list including expansion of NRG’s South Texas Project which included plans for two ABWRs as well.
Exelon isn’t alone in being thrown from its horse in less than eight seconds. The South Texas Project expansion bit the dust in April 2011 when TEPCO, a pre-license investor, pulled out due to the Fukushima crisis taking with it Japanese government export credits. Exelon tried to acquire NRG with an all stock hostile takeover, but NRG’s major investors said the deal was under-valued and rejected it in July 2009.
Luminant’s open-ended future
Elsewhere in Texas, the NRC has scheduled completion of the design certification of the giant 1700 MW Mitsubishi USAPR for 2016, and along with it the combined construction and operating licenses for two of them to be built at Luminant’s Comanche Peak Station.
For Luminant to proceed with the project two things must happen. The first is that natural gas prices move north of $6-8/MBtu and show evidence they will stay there for quite some time, e.g., long enough to finance and build two new nuclear reactors. Second, Luminant’s financial condition, especially its debt load, needs to change for the better. One scenario, possibly akin to a wildcatter’s pipe dream, is that a new group of investors interested in building the Mitsubishi reactors would buy Comanche Peak from the privately-held holding company.
In 2007 Texas was the leading light of the U.S. nuclear renaissance. Now the state is back to its fossil fuel roots with natural gas riding high as the king of the road.
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