Foreign Ownership Could Halt Licensing of Proposed South Texas Project Nuclear Reactors

The expansion of the South Texas Nuclear Project (STP) from 2 units to 4 units has had an interesting financing history.  Initially Austin Energy chose to not pursue a financial partnership with NRG, Toshiba and San Antonio’s municipally owned utility – CPS.  That left CPS with a 50% ownership, which they later dropped to 40% and then, during an upset at the utility when the city of San Antonio discovered that CPS had withheld information about a 4 billion dollar increase in the estimated cost of building the new plant just before the City Council was to vote on a bond issue for the plant, the city and CPS backpedaled and in a final settlement became 7.6% owners with the understanding that they would put no further funding into the project.

CPS’s substantial exit from the NRG/NINA partnership left the project  searching for additional partners and power purchase agreements (PPAs) to keep its expansion alive.  Opponents of the plant were focusing efforts on preventing central Texas public power providers from signing PPAs and had made some progress when the Japanese earthquake and subsequent tsunami triggered the nuclear disaster at Fukushima.

Within two days after the Japanese earthquake, Public Citizen was linking the financial death of the STP expansion project with NRG’s remaining financial partners – Japanese companies Toshiba, TEPCO (the operators of the doomed Fukushima plant) and the Bank of Japan. On May 1, NRG announced it was writing off its financial investment in the STP expansion, effectively killing the project for the foreseeable future.

Most people thought this was the end of this expansion move, but Toshiba, the sole remaining financial partner did not pull the application and at the end of August, Public Citizen, the SEED Coalition and the local opposition group went before an Atomic Safety and Licensing Board (ASLB) panel–an independent body within the Nuclear Regulatory Commission (NRC)–to present oral arguments.

These opponents of two proposed South Texas Project nuclear reactors received a favorable order from ASLB judges allowing a full hearing to proceed regarding the project’s foreign ownership. Licensing efforts may be impacted as a result. In April, the Nuclear Regulatory Commission told Unistar Nuclear Energy it could not get an operating license for its planned reactor at Calvert Cliffs in Maryland because it was fully owned by France’s electricite de France (EDF)—a foreign entity.

“Federal law is clear that foreign controlled corporations are not eligible to apply for a license to build and operate nuclear power plants. The evidence is that Toshiba is in control of the project and this precludes obtaining an NRC license for South Texas Project 3 & 4,” said Brett Jarmer, a lawyer for the Intervenors; SEED Coalition, Public Citizen and South Texas Association for Responsible Energy. “Foreign investment in U.S. nuclear projects is not per se prohibited; but Toshiba is paying all the bills for the STP 3 & 4 project. This makes it difficult to accept that Toshiba doesn’t control the project,” said attorney Robert Eye. “National security and safety concerns justify NRC’s limits on foreign ownership and control of nuclear reactors,” said Karen Hadden, Director of the Sustainable Energy and Economic Development (SEED) Coalition. “What if a foreign company runs a U.S. reactor carelessly? What if a nation that’s friendly today becomes hostile toward the U.S. in the future and tries threaten us with our own reactors?” “Even if the reactors are operated by the South Texas Nuclear Operating Company, they will get their orders from foreign owners. What if their concerns are more about costcutting and less about safety?” asked Susan Dancer, President of South Texas Association for Responsible Energy. “Japanese investors would have us believe that they can come to America and safely build, own and operate nuclear plants, and that we should not concern ourselves with passe laws and regulations, but the Fukushima disaster has demonstrated the flawed Japanese model of nuclear safety. Our nuclear reactors should be controlled by the people most concerned about our country: fellow Americans.” The judges’ order is online at www.NukeFreeTexas.org.

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