Austin backs out, billions in loans are yanked, adding pressure to San Anto's nuke daydreaming.
Greg Harman
[email protected]
Austin made it official yesterday: Our 16-percent nuclear sweetheart ain't coming along for this nuclear expansion. That leaves the city of San Antonio and NRG Energy essentially 50-50 partners on a proposed doubling of the South Texas Nuclear Project (more recently renamed South Texas Project for some obscuring reason).
Can't blame our Capitol kin. Years of delays and millions in cost overruns for Units One and Two nearly bankrupted them before the energy finally started to flow in 1988.
SA-owned CPS Energy largely credits the nukes for keeping our rates low. Of course, they have their fiscal critics, mining victims, and disposal quandaries latched on like lampreys.
"Hip-hip-HOORAY!," blogged citizensarah at Public Citizen's Texocentric blogspot.
The big news, however, is the removal of $50 billion attached to Obama's stimulus package during the final hours of negotiation as Senate and House versions were rectified and billions were stripped away to appease Republican detractors.
That move is going to make it much harder for many of the 17 pending applications to move forward. But it will bring a small boom to the green-building sector.
Writes Kate Sheppard at Grist:
The $789 billion economic-recovery bill looks good in terms of green spending, according to preliminary analysis from the Center for American Progress. The House and Senate reached agreement on the bill on Wednesday and are expected to approve it by the end of the week; President Obama hopes to sign it into law by Presidents' Day.
The bill contains at least $62.2 billion in direct spending on green initiatives and $20 billion in green tax incentives, while funding for nuclear and coal projects was dropped from the final version.
The bill contains at least $62.2 billion in direct spending on green initiatives and $20 billion in green tax incentives, while funding for nuclear and coal projects was dropped from the final version.
In their press release, Austin leaders state they are not opposed to the project, it's just for them the risks outweigh potential benefits.
Here's the meat on that:
Austin Energy retained the services of WorleyParsons to evaluate the NRG proposal. WorleyParsons has extensive experience in the nuclear industry and is strongly supportive of the resurgence of nuclear energy in the United States. It is further supportive of the overall proposal to expand STP and has concluded that the proposed expansion project is financially viable as a whole. However, it was the conclusion of both WorleyParsons and Austin Energy that the utility should not participate in this particular project.
A detailed risk assessment and financial analysis indicates that the potential return to the City would not be sufficient given the potential risk. Austin, as a minority shareholder in the STP, would have no control over construction costs, schedule delays, and future fuel and energy prices. The analysis indicates that investment in the proposed project could require cash outlays by the City of $2 billion or more over at least the next seven years.
Such a sum would require the issuance of significant debt relative to Austin Energy's size that could result in a downgrade of its credit rating, leading to higher future borrowing costs. The addition of 432 MW of additional baseload nuclear generation within the projected time frame is almost double the amount of additional generation Austin Energy expects to require by 2020. There also remains the additional long-term risk associated with waste disposal.
Austin Energy has developed a proposed generation plan through 2020. That proposed plan includes about 900 MW of additional capacity, including a 200 MW expansion of the utility's natural gas-fueled Sand Hill Energy Center, an additional 100 MW biomas plant, a doubling of the utility's wind-generation portfolio to about 1,000 MW as well as 100 MW of solar capacity. The plan is under review through a public participation process that began last November. The utility expects to make final recommendations on the plan to the Austin City Council by mid to late summer.
A detailed risk assessment and financial analysis indicates that the potential return to the City would not be sufficient given the potential risk. Austin, as a minority shareholder in the STP, would have no control over construction costs, schedule delays, and future fuel and energy prices. The analysis indicates that investment in the proposed project could require cash outlays by the City of $2 billion or more over at least the next seven years.
Such a sum would require the issuance of significant debt relative to Austin Energy's size that could result in a downgrade of its credit rating, leading to higher future borrowing costs. The addition of 432 MW of additional baseload nuclear generation within the projected time frame is almost double the amount of additional generation Austin Energy expects to require by 2020. There also remains the additional long-term risk associated with waste disposal.
Austin Energy has developed a proposed generation plan through 2020. That proposed plan includes about 900 MW of additional capacity, including a 200 MW expansion of the utility's natural gas-fueled Sand Hill Energy Center, an additional 100 MW biomas plant, a doubling of the utility's wind-generation portfolio to about 1,000 MW as well as 100 MW of solar capacity. The plan is under review through a public participation process that began last November. The utility expects to make final recommendations on the plan to the Austin City Council by mid to late summer.
It would seem that the more local residents and Hardberger's Mission Verde can twist CPS Energy into oversized renewable commitments, the more our emphasis on nukes would diminish here at home.
Can we forgo nuclear even if the worst-case migration-influx predictions prove out? Some have said so.
