UPDATE 1-Luminant seeks new reactor, 3rd Texas filing
(Adds CEO comments, other details)
HOUSTON, Sept 19 (Reuters) - Dallas-based Luminant said on Friday it would submit an application with the U.S. Nuclear Regulatory Commission to build two new nuclear reactors in Texas, becoming the third company to seek approval for additional nuclear power in the state.
Luminant seeks a combined operating license (COL) to expand its Comanche Peak Nuclear Power Plant in north Texas by 3,400 megawatts, the company said in a release.
David Campbell, Luminant's chief executive, said additional nuclear power is needed to meet the state's need for electricity which grows by 1 to 2 percent a year.
"Given the market we are in and the importance of fuel diversity and the potential nuclear has in Texas is why we are pursuing it at this stage," Campbell said.
Earlier this month, Exelon Corp (EXC.N), the largest U.S nuclear operator, filed an application to build a two-reactor plant in Victoria County Texas, southwest of Houston.
Last year, NRG Energy (NRG.N), the second-largest Texas power company, was the U.S. first company to submit a license application at the NRC in nearly three decades, to add two units at its South Texas Project nuclear station.
Texas Public Utility Commission Chairman Barry Smitherman said the nuclear proposals affirm the strength of Texas' deregulated market structure.
The state is expected to need 50,000 MW of new generation over the next 20 years, Smitherman said. "We need more zero carbon nuclear generation providing baseload power to consumers," he said.
Luminant gave no cost estimate for the expansion. Campbell said the price tag will depend on future construction costs once the license to build is obtained.
He said Luminant would try to build its new reactors at the low end of current industry estimates which he said range from $2,500 to $6,000 a kilowatt, or roughly $8.5 billion to more than $20 billion for a 3,400 MW plant.
Federal incentives allowed under the Energy Policy Act of 2005 "will be a very important piece of the puzzle," Campbell said.
Luminant selected the US-Advanced Pressurized Water Reactor technology designed by Mitsubishi Heavy Industries (7011.T) and currently used in Japan. Mitsubishi is seeking NCR certification to use the design in the U.S.
"It's an advanced design that also has a track record so it's a good combination for nuclear." Campbell said.
Luminant will form a joint venture with Mitsubishi Nuclear Energy Systems to develop Comanche Peak units 3 and 4. Luminant will own an 88 percent of the joint venture which is expected to close before year end.
Nuclear opponents criticized the application as "premature" and costly given that Luminant's reactor design is not certified by the NRC and requires government subsidy.
Luminant, NRG and Exelon all want "unlimited taxpayer-backed loan guarantees that Congress might provide," said Tyson Slocum of Public Citizen, a consumer advocate.
Luminant, a subsidiary of privately held Energy Future Holdings Corp, the former TXU Corp, is the largest generating company in Texas with 18,000 MW.
A investor group led by Kohlberg Kravis Roberts and Co KKR.UL, TPG TPG.UL and Goldman Sachs Capital Partners owns Energy Future Holdings.
Comanche Peak, one of two existing nuclear plants in the state, is located near Glen Rose, Texas, 80 miles (128 km) southwest of Dallas. (Reporting by Eileen O'Grady)
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