French-American Venture Plans New Reactors in U.S.
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By MATTHEW L. WALD
Published: July 21, 2007
WASHINGTON, July 20 â€” The French national electric utility has signed a partnership agreement to build and own nuclear plants in the United States and Canada with an American company, Constellation Energy, the two companies announced on Friday.
If they do build, Ã‰lectricitÃ© de France, the worldâ€™s largest nuclear operator, would become the first foreign company to build plants in the United States.
Constellation Energy, which will lead and manage the joint venture, says it intends to file a license application before the end of the first quarter of 2008 to build a plant about 60 miles south of Washington. The last time a company ordered a plant in this country without later canceling it was in 1973.
The new joint venture will absorb a previous partnership with Constellation and a European company. In September 2005, Constellation formed an alliance called UniStar Nuclear with Areva, a French-German company, to market a new reactor design in the United States that is already being used in Europe. Bechtel, the engineering firm, is also part of that partnership. But neither Bechtel nor Areva would be an owner of the plants.
E.D.F., as the French company is known, will put $350 million in cash into the venture, UniStar Nuclear Energy, and will eventually invest $625 million, E.D.F. and Constellation said.
United States law limits foreign participation in nuclear power, under rules that were intended in part to keep a vital new technology secure. At this point, however, E.D.F.â€™s expertise in power plant construction is far more current.
â€œTo bring about the nuclear renaissance in the United States, it really is going to take the global nuclear industry,â€ said Michael J. Wallace, a Constellation executive who will be chairman of the new entity. â€œVendors, suppliers, operators and investors like E.D.F. who understand and are comfortable with the technology â€” we need them all.â€
UniStarâ€™s plan is to build a plant at Calvert Cliffs in Maryland, adjacent to Constellationâ€™s two operating reactors, and to build a fleet of identical reactors â€” â€œdown to the carpeting and wallpaper,â€ Mr. Wallace has repeatedly said â€” around the country, with local partners. E.D.F., as half-owner of UniStar Nuclear Energy, would own half the joint ventureâ€™s share of any such reactors, although both Mr. Wallace and the chief executive of the partnership will be from Constellation.
Ã‰lectricitÃ© de France is 87 percent government-owned and operates 58 reactors, the newest finished about three years ago. It is doing preliminary work on another that is of the same design that UniStar wants to build.
â€œThey never stopped building,â€ Mr. Wallace said. Mr. Wallace was in charge of start-up at the Byron and Braidwood plants in Illinois in the mid-1980s, making him one of the few American executives still working who has leadership experience in the field.
In the late 1990s, British Energy and Peco Energy, the Pennsylvania utility, formed a partnership to buy American nuclear reactors, but it never built plants. British Energyâ€™s stake has since been bought out by an American company. The joint venture appears to represent one of the final steps in the globalization of nuclear power.
Supporters of nuclear energy often point to reactors as a way to achieve energy independence, but UniStar is promoting a European design. Westinghouse was bought by Toshiba, and General Electric, the last American-owned designer of reactors, recently formed a partnership with Hitachi. Most of the nuclear fuel used in the United States is imported. Now, even some of the capital will be imported.
Under the agreement, E.D.F. will, in addition to investing in new reactors, buy up to 9.9 percent of Constellation Energyâ€™s common shares.
â€œWe are extremely pleased to partner with Constellation Energy, one of Americaâ€™s pre-eminent nuclear operators,â€ said Pierre Gadonneix, the chairman of E.D.F., in a statement.