Energy
11:40 am
Tue March 15, 2011

Japan Disaster Puts Texas Nuclear Deal on Hold

CPS Energy of San Antonio announced today that negotiations over buying power from the South Texas Project [STP] expansion have been put on hold.

NRG Energy is in the process of adding two more units to the South Texas Project nuclear facility in Matagorda Bay.  CPS Energy, NRG and the Japanese company Tokyo Electric Power Co. would be the owners of the expansion, but Tokyo Electric's participation is now in question after a massive tsunami  damaged one of its nuclear plants in Japan.

"The decision was made to just kind of suspend the talks on nuclear for a little while so we can see what happens over there and be able to make better decisions going forward," said CPS spokesperson, Christine Patmon.

Tokyo Electric owns about 10 percent of the expansion project. It could buy another 10 percent if federal loans from the Department of Energy come through. The STP expansion is also dependent on some Japanese loan agreements as well.  But considering what has happened in Japan, financing for the expansion could be in  limbo.

NRG Energy released this statement concerning the Japan disaster and nuclear projects:

Our most immediate concern is for the safety of our friends and partners and all the people of
Japan. Our thoughts and prayers are with them. There will be time to assess any impact on nuclear
development in the US in the days and weeks to come.

CPS Energy, which owns about 7 percent of the STP expansion, was also considering buying power from the two future units.  Austin Energy is also considering buying power from the expansion. In January 2011, Juan Garza, a former Austin Energy staffer who is  now working for NRG, came to Austin  Energy to pitch a purchasing power agreement. It was presented as a way for the City of Austin to cut its carbon footprint and keep energy rates low.

"They weren't formal discussions," said Austin Energy spokesperson Ed Clark. "They had made general indications of pricing. That's what we had to start with (...) we had intended to have some  additional talks."