Wall Street Journal ace energy reporter Rebecca Smith discloses on today’s front page, June 17, that DOE is getting set to issue $18.5 billion in loan guarantees to four companies that will own and operate the first new nuclear power plants to be started afresh since Three Mile Island. Strikingly absent from the list are the two companies that have operated plants most profitably and effectively in the last decade, Exelon and Entergy. Instead, the Department of Energy opted for two traditional vertically integrated utilities, Southern Company and Scana Corp., and two "merchant" companies that specialize in selling electricity into competitive markets, NRG Energy and UniStar Nuclear Energy, a joint venture of Constellation and Electricité de France.
In choosing among 17 companies that had filed applications for 21 reactor projects, eyeing a total of $122 billion in Federal loan guarantees, the government “sought companies with strong development teams and plans that could be implemented quickly," reports Smith. Scana and Southern will use a pre-approved design developed by Toshiba subsidiary Westinghouse, while NRG will go for the General Electric pre-approved design. UniStar will use more or less the blueprint for the plant that France’s Areva is currently building in Finland.
The Energy Department is shooting to have construction of the first plants started by 2011 and plants operating by 2015 or 2016, says Smith. "The first round of building would add about seven new reactors to the U.S.'s existing fleet of 104 at a likely cost of more than $40 billion. But the new plants cost so much -- estimates range from $5 billion to $12 billion -- that power companies could have trouble coming up with the equity they must put into the projects, typically 20% to 50% of the total. In addition, technical or regulatory problems could arise, and it isn't certain the plants can be run profitably."
NOTE: as long as you're reading today's Wall Street Journal, you might want to also check out the news story by Jake Sherman, who reports that several members of Congress who are highly influential in energy and climate policy own significant stakes in companies affected by such policy. You might wonder how it is that the president and Cabinet members have to put stocks into blind trusts when they assume office, whereas legislators evidently do not. Could it have something to do with the fact that lawmakers make the laws?