South Texas Project development to move forward
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After a two-month legal battle, NRG Energy Inc. and CPS Energy have come to an agreement that will allow the development of the two new units to proceed.
The agreement will allow Nuclear Innovation North America full management control of South Texas Project’s unit 3 and 4, allowing the expansion to move forward, this according to a news release from NINA.
CPS Energy will reduce its ownership in the two new units to 7.625 percent, said Jelynne LeBlanc Burley, CPS Energy Acting General Manager in an announcement made Wednesday.
With an increase ownership of 42.375 percent for NRG Energy and Toshiba Corporation, the ownership will increase to 92.375 percent.
The settlement is valued at $1 billion, according to a news release from CPS. CPS had sued NINA for $32 billion.
Final documentation and CPS Board approval will be finalized in a board meeting next week.
Both units are scheduled for construction in 2012, after the Nuclear Regulatory Commission grants licenses.
“This agreement is of tremendous importance for Texas, NINA, and for the American nuclear renaissance,” said Steve Winn, Chief Executive Officer of NINA in a press release.
This agreement will continue the development of one of the leading nuclear power projects in the country, he stated.
“The strengths of the STP 3 and 4 project—certified technology, turnkey contract with a proven EPC contractor, exceptional site and strong state support—will once again put us in contention for a Department of Energy loan guarantee and ensure we have no conflicts preventing new partners from joining the project,” he added.
Last month a San Antonio judge urged NRG Energy Inc. and CPS Energy to keep negotiating in a dispute over plans to build units 3 and 4 of South Texas Project.
Judge Larry Noll ruled CPS may withdraw its financial support from the $10 billion project, but it could not expect to retain its 50 percent ownership stake.
The judge directed both parties to return and negotiate a settlement to address questions not covered in existing contracts regarding project ownership and withdrawal.
The utility claimed that NINA, NRG and Toshiba lured CPS into the project through "fraudulent, defamatory and illegal conduct" and then tried to push out CPS by disseminating false information in the press, according to the lawsuit that was filed in Bexar County in early December.
South Texas Project is please that an agreement has been reached, said Buddy Eller, Director of Communications and Public Relations for South Texas Project.
"The agreement preserves the stability and momentum of the project,” Eller said.
"Throughout this process, our owners never wavered in their commitment to this project. We believe our site remains one of the best locations in the nation for expansion. When our facility was constructed 30 years ago, it was designed for four units and today has the land, water and transmission infrastructure to support Units 3 and 4. In addition, we have strong community support for this project," he added.
“With a project of this size and scope - spanning seven to nine years in length and involving significant investment -there are numerous milestones which must be successfully cleared. The resolution of these issues is a critical milestone in the lifecycle of this project,” he said.
Other terms agreed to in the settlement include:
• Upon receipt of a conditional Department of Energy loan guarantee, NINA will pay CPS Energy $80 million—half paid promptly after award receipt and the other half six months later.
• NINA will donate $10 million over four years to the Residential Energy Assistance Partnership in San Antonio.
• CPS Energy will work with the DOE to support NINA’s application.
• NINA will assume all management control of the project.
• CPS Energy will be responsible for all project development costs incurred through January 31, 2010, with NINA responsible for all project development costs incurred thereafter.
• All litigation will be dismissed with prejudice.