It appears the planned expansion of the South Texas Project nuclear facility is close to getting the necessary federal loan guarantees that would put the two-reactor project back on track.
San Antonio hit the freeze button on payments into the project — and socked 50-50 partner NRG Energy with a $32 billion lawsuit — after it came to light that unofficial cost estimates from Toshiba had grown from $8.5 billion to $12.7 billion before financing costs for the project.
NRG CEO David Crane said other people's money, including limited federal loans, was the key to making STP happen.
As reported in Forbes late last year:
[Crane is] first seeking loan guarantees from the Department of Energy and the Japanese government (read: taxpayers) that would cover 80% of the project. That leaves $2 billion. Then there are a pair of partners -- the city of San Antonio, which will end up with 40% of the equity, and another partner to be named by the end of this year, which will take another 20%.
After the first nuclear loan guarantee went to Southern Company back in February, it appears the federal government's next payment may be on the way to South Texas.
E&E Publishing reported last week:
The competition for a second multibillion-dollar federal loan guarantee for nuclear projects has narrowed to two contenders, the Calvert Cliffs 3 reactor in southern Maryland and South Texas Project 3 and 4, southwest of Houston, said George Vanderheyden, CEO of UniStar Nuclear Energy, the U.S.-French venture that hopes to build the Maryland plant.
Vanderheyden confirmed speculation in the industry, saying, "it is really is down to the two of us. These two plants are neck and neck," as the projects' developers negotiate separately with the Energy Department over terms of a possible construction cost guarantee.
It is clear only one will win, he added. DOE's award of $8.3 billion in guarantees to Southern Co. and its partners in February for the construction of two new units at Southern's Vogtle plant in Georgia leaves about $10 billion remaining in the loan program approved by Congress in 2005. That's not enough for both Calvert Cliffs 3 and the Texas projects.
Nor would there be funds for a fourth contender, SCANA Corp.
and Santee Cooper, which have applied for a loan guarantee for the proposed
V.C. Summer 2 and 3 reactors in South Carolina. This bid reportedly trails the
other two in DOE's evaluation process.