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Posts Tagged ‘nrg energy’

CPS-NRG Lawsuit: Settlement Meeting and Citizen Intervenors

Posted in Energy, Nuclear, tagged , , , , , , , , , , , , , , , , on January 11, 2010 |

Representatives from San Antonio’s CPS Energy and NRG Energy, their partner in the proposed South Texas Nuclear Project expansion, met this morning to try and reach a settlement on their $32 Billion lawsuit.  But CPS acting General Manager Jelynne LeBlanc-Burley apparently walked out of the meeting after learning that “neither Nuclear Innovation North America CEO Steve Winn nor NRG Energy CEO David Crane made the trip to San Antonio.”

Update: Monday’s settlement meeting ended with no resolution. Cooperation fail.

Meanwhile, a new non-profit called the Ratepayer Protection Coalition announced its inception and intention to intervene in the CPS-NRG’s lawsuit.

Whaaaa? They can do that? Yes, according to attorney Karen Seal:

In Texas, citizen groups have the right to intervene in lawsuits like this if there is evidence of illegal activity like fraud and misrepresentation and if the behavior is expected to continue. We believe this to be the case. We hope to protect our interest as ratepayers, taxpayers and voters from continuing fraud and misrepresentation by all parties.

But why intervene? Orlando Gutierrez, president of the coalition, had the following to say:

Ratepayers are not represented in the legal proceedings between these parties, although they will bear the brunt of a bad settlement deal with higher electric bills.  There has been fraud and misrepresentation throughout this process. CPS withheld information and misled the public about the $4 billion cost increase throughout the series of eleven district meetings last year. Project partner NRG admits to misrepresenting costs for purposes of negotiation. Both partners deceived the City Council. Yet neither the Council, taxpayers, or voters have independent representation in the Court.

The Ratepayer Protection Coalition is seeking discovery information to “get to the truth” about the costs of the proposed reactors and available energy alternatives.

According to Greg Harman, reporter at the San Antonio Current:

CPS can’t represent the City of San Antonio, argues the Ratepayer Protection Coalition, a collection of familiar faces from the vindicated critics’ pool. Not only has CPS “conducted a campaign of misinformation, disinformation, and deception designed to convince the San Antonio community about the merits of pursuing nuclear power” but threatened the City Council “that a decision not to pursue the nuclear project would lead to the loss of hundreds of millions of dollars spent on the project to date by CPS Energy.”

In short, CPS has “dirty hands” and can’t represent the City of San Antonio in court, according to RPC’s complaint filed this morning in the 37th District Court, joining the CPS-NRG lawsuit as an intervener.

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By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.

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South Texas Project Nuclear Reactors Too Expensive, CPS Cost Estimate Overly Optimistic

Posted in Energy, Nuclear, tagged , , , , , , , , , , , , , , , , , , , , , , , on July 7, 2009 |

Last week San Antonio’s CPS released their cost estimate for the proposed South Texas Project Nuclear Expansion, and we found their numbers naive optimistic ignored history wanting.  To find out why, check out this Guest Column, printed in today’s San Antonio Express-News, from Public Citizen’s own Energy Policy Analyst Matthew Johnson.

Matthew Johnson: Why not cheaper, safer sources of energy?

Matthew Johnson: Why not cheaper, safer sources of energy?

Nuclear reactors too expensive

By Matthew Johnson – Express-News Guest Voices

CPS Energy announced its cost estimate for two more nuclear reactors at the South Texas Project near Bay City last week. The $13-billion price tag is the latest estimate in a sustained and systemic low-balling by utilities wishing to receive government subsidies.

CPS’ partner, NRG Energy, recently pegged the cost of units 3 and 4 at $10 billion, a figure that has jumped nearly 50 percent from its original estimate of $5.4 billion.

Other analyses, however, have estimated the cost of two new reactors to be nearly 100 percent higher than the CPS estimate. Former Texas Office of Public Utility Counsel official Clarence Johnson recently estimated the cost of STP expansion to be $20 billion to $22 billion, while nuclear engineer and president of the Institute for Energy and Environmental Research Dr. Arjun Makhijani estimated a cost of up to $17.5 billion in 2008.

A new study by Mark Cooper, of the Vermont Law School, analyzed numerous cost estimates of the so-called nuclear renaissance beginning around 2001. He discovered that early estimates of new nuclear reactors were made predominantly by industry and academics and were optimistic and eager to rejuvenate the industry.

Since then, utilities’ estimates have shown similar wishful thinking, but continue to rise. Independent analysts and Wall Street, Cooper shows, offer the most realistic estimates that are much higher.

The history of the STP expansion effort follows this pattern. CPS and NRG have been attempting to gain support in federal, state and city government since they submitted their application to build two new reactors to the Nuclear Regulatory Commission in 2007.

Wall Street estimates also place a similar and continuously rising price tag on new reactors. The bond-rating agency Moody’s predicted $5,000-6,000 per kilowatt for new reactors almost two years ago, which translates to $16.2 billion for STP expansion, and recently indicated that it could downgrade bond ratings on utilities constructing new nuclear reactors.

The federal government established an $18.5 billion subsidy to back loans taken out to construct new reactors. STP expansion advocates brag about being on the short list for part of these loan guarantees, but proponents and opponents agree that more reactors won’t be built if the feds don’t pony up the dough.

The reason is simple. Investors are squeamish to lend money for projects with such a high risk of defaulting on repayments. Delay and cost overruns increase risk. STP’s original reactors took eight years longer than planned to complete and costs soared six times over original estimates.

CPS Energy has faster and cheaper alternatives. Their recent announcement on the 27 megawatt solar plant in West Texas, the Mission Verde plan to develop 250 megawatts of solar and new wind contracts plus their goal to save 771 megawatts through energy efficiency by 2020 are shining examples of the path they should focus on to keep rates stable and low in the future. This path also creates more local jobs.

City Council will soon have to decide on San Antonio’s involvement in new reactors. It must vote no on nuclear to protect San Antonians from bearing the overwhelming economic burden of building costly, dangerous and unnecessary nuclear reactors.

Matthew Johnson is an energy policy analyst for Public Citizen’s Texas office.

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CPS’ Reactor Cost Estimate Naïve; Ignores History and Independent Reports

Posted in Energy, Nuclear, tagged , , , , , , , , , , , , , , , on June 29, 2009 |

Statement of Tom “Smitty” Smith, Director, Public Citizen’s Texas Office

CPS Energy’s announcement today that it will cost $13 billion to build two new nuclear reactors at the South Texas Project (STP) is a naïve guess when compared to independent assessments that offer more realistic estimates for financing and construction. San Antonio already has spent nearly $300 million just for an accounting of this project’s potential cost, but it appears that even that amount could not buy the city an accurate study.

Former Office of Public Utility Counsel Director Clarence Johnson and nuclear engineer and president of the Institute for Energy and Environmental Research Arjun Makhijani have estimated that costs will range from $17.5 billion to $22 billion.

Even Wall Street underwriters are pinning new reactors at a cost closer to what Johnson and Makhijani have estimated. Wall Street realizes the true potential cost and risk of nuclear power – which is why they refuse to invest in STP unless it is able to secure federally guaranteed loans. That way, if the project goes under or the costs balloon out of control, the only investors who will lose a significant amount of money are the American taxpayers.

Estimates like the one CPS made today are non-binding. If the reactors cost more than CPS has estimated, San Antonio taxpayers will pay the difference. If NRG Energy is unable to provide a fixed contract for this deal, CPS and San Antonio should ask why.

The City Council can stop all this madness and save San Antonio from a bad deal that will pass costs onto ratepayers for decades to come. Council members have questioned the project in the past and have expressed skepticism. The unfortunate truth is that there will be no way to know how much the expansion will cost until the plant is online.  No one knows how much new reactors will ultimately cost to build, finance and operate.

City Council members have shown support for investment in energy efficiency and renewable energy. They have shown incredible vision supporting the Mission Verde plan to develop 250 megawatts of solar and new wind contracts. Just this May, the City Council voted to allow CPS to fund energy efficiency efforts, known as the Save for Tomorrow Energy Program. These are the sorts of measures that San Antonio should be supporting – measures that can be deployed quicker and at a fraction of the cost of nuclear expansion.

Now is the time for the City Council to bring common sense and practicality back to the table. San Antonio can’t afford another nuclear boondoggle; the City Council has the opportunity to say “no” to these new nuclear investments. Only it can protect San Antonians from bearing the overwhelming economic burden of building costly, dangerous and unnecessary nuclear reactors.

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