CPS lays groundwork for expansion of nuclear power

CPS Energy held their quarterly board meeting yesterday, amidst much glad-handing and fanfare. (Do all Texas companies have a group prayer and a pledge of allegiance to the flag before their board meetings?) Yet beneath all the gloss, a potentially disturbing truth emerged. While ultimately delaying the decision for another year, CPS clearly laid the groundwork for making expansive use of nuclear power in South Texas.

Of course, the company didn't come right out and open up the meeting with such a pronouncement. The nuclear option was deceptively camouflaged by preceding it with lots of happy talk about “aggressive” action to help reduce consumer energy usage and costs. But in the end, it was all building up toward a nuclear-power pitch that failed to include environment health concerns as one of its “risk factors” and which wouldn't save residential consumers any money for at least 34 years.

On the plus side, CPS is moving forward with a $685-million energy efficiency plan that aims to curb San Antonio's power usage enough over the next 12 years to avoid building a new power plant. But they're trying to greenwash the nuclear option by juxtaposing it with plans to get a solar power plant going by 2010 or 2011. If a nuclear disaster or major contamination occurs in South Texas some day, it will likely be traced back to this moment.

The beating around the nuclear bush began with an extensive report on the company's energy-efficiency study by Nexant, a San Francisco-based energy consulting company that was spun off from a technology consultant group of multinational corporate titan Bechtel in January 2000. Readers of John Perkins' Confessions of an Economic Hit Man will recall Bechtel being described as one of the world's most powerful engineering and construction companies, “a prime example of the cozy relationship between private companies and the U.S. government,” with an executive staff populated by Reagan-Bush cronies. Perkins places Bechtel near the center of his expose about a “corporatocracy” that exploits resources and people around the world. One example includes Bechtel receiving the first major contract in the reconstruction plan for Iraq in 2003.

Terry Fry, Nexant's Senior Vice President of Energy and Carbon Management, reported on the “Demand Side Management Potential Study” for CPS, in which he cheerily revealed that CPS could cut 569 megawatts by 2020 with “energy-efficiency technology,” resulting in “a good-sized power plant that could be avoided.” One of the CPS folks then declared that the company will “aggressively pursue” the megawatt reduction potential offered by the Nexant study. Specifics were not discussed, but it was hinted that the plan is likely to include programs to help customers retrofit their homes and businesses to be more energy efficient. This could include things like insulating older homes and changing out windows.

After some more glad-handing and a short break, CPS's Paul Barham — Senior Director for Generation Research & Planning — then stepped in to lower the nuclear boom in his report on the company's “Strategic Energy Plan” update for FY 2009-10. The update began with talk of a plan to “increase renewable energy supply” and “maintain environmental commitment.” It then moved into discussion of power-generation options — natural gas, coal and expansion of the STP (South Texas Project) nuclear plant.

Barham touted the company's goal of reducing carbon-dioxide emissions as part of its environmental commitment and then revealed that the STP expansion would help the company cut 127 million tons of C02 emissions by 2033, as opposed to only 32 million tons through renewables or 49 million tons through the Save for Tomorrow Energy Plan (STEP). The expansion of STP would involve building two new nuclear plants in Bay City.

Barham then presented a “Risk Summary” comparison of nuclear power with that of natural gas and coal. The four risk factors considered in the spiffy graph were capital, technology, carbon, and fuel cost. This understandably left some in the audience scratching their heads. There had been some nebulous talk earlier about a “fifth fuel,” but there was no fifth column for environmental risks? Nuclear only got a red light for capital, with yellow for technology and green for carbon and fuel cost, while natural gas received green for capital and technology but yellow for carbon and red for fuel cost. Coal got two reds and two yellows.

“Nuclear is the only one of these options that has no CO2 emissions,” said Barham. He also noted that “solar and wind don't look very cost-effective â?¦ but we do have a big place in our plan for renewables.”

The report continued through analysis of capacities and fuel-price volatility, before reaching Jerry Maguire's “show me the money” moment with a projected monthly residential electric bill chart. While nuclear would cost consumers a little more than gas or coal for the first 19 years, Barham noted how it would become cheaper than coal after 24 years and cheaper than natural gas after 29. This calculation excludes the 8-10 years that it would take to get the nuclear option up and running in the first place. So CPS apparently plans to sell consumers on the nuclear plan by saying that it will save us some money on our electric bills sometime in the 2040s - woo!

The summary concludes that expansion of STP should remain an option for future energy generation due to this “most affordable long term cost,” the lack of carbon emissions and how it presents mainly a “construction cost risk” versus natural gas's “fuel cost risk.” (Still no mention of the environmental and health risks from the toxic radioactive waste that can take millions of years to decay.)

San Antonio will have a full year to debate the matter however, as Barham recommended that final Board and Council decisions be delayed until fall 2009 for further analysis. This will include factors such as public input and “community involvement,” financial market uncertainty, a new presidential administration with new energy priorities, additional clarity on federal incentives (potentially the most critical factor from CPS's perspective), updated information on carbon policy, Congressional action on natural gas supply, and ongoing developments with project partners NRG Energy and Exelon.

There was no further detail on the latter, but Cindy Weehler of the Consumers' Energy Coalition was on hand to point out that it may have to do with how Exelon is currently being sued by the state of Illinois for taking over nine years to inform a local community about leakage of millions of gallons of radioactive water from its Braidwood nuclear plant into groundwater, drinking wells, and a forest preserve. The continuing lack of a definitive plan for properly disposing of the nuclear waste already created over the past few decades is another factor that never seems to enter the discussion when the big power companies and John McCains of the world pontificate on the subject.

“All of that is code for nuclear,” said Weehler of Barham's report. Stay tuned, as the Current will be following this story every step of the wayâ?¦


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