(Adds CEO comments, other details)
HOUSTON, Sept 19 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
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)