From Doc Bones on the Big Dog thread, the following on U.S. nuclear reactor activities. If this pans out, multi-baggers will be the norm.
From: Doc Bones 1/29/2007 8:29:39 AM
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Power Producers
Rush to Secure
Nuclear Sites
First to Develop Plans
Could Tap $8 Billion
In Federal Subsidies
This is the clean alternative energy that makes sense - Doc
By REBECCA SMITH [WSJ]
January 29, 2007; Page A1
With the U.S. on the verge of building a new generation of nuclear power plants, potential owners are racing to identify and lock down the best sites in order to secure billions of dollars in federal subsidies pledged to first-comers.
Their efforts will test local and national attitudes more than two decades after nuclear accidents made headlines. They also represent a considerable financial gamble for the utility industry, which is moving ahead at a rapid pace despite uncertainty ranging from environmental opposition to finding a home for radioactive nuclear waste. In one case, the zeal to secure a promising site has resulted in a nasty legal battle.
A flood of applications seeking permission to build at least 30 reactors, primarily in the South, is expected to pour into the Nuclear Regulatory Commission beginning late this year. If built, the reactors would boost the nation's electricity supply by more than 30,000 megawatts, or 3%. A megawatt is enough to power at least 500 homes.
'A Horse Race'
Under recent legislation intended to jump-start development, Congress is dangling more than $8 billion worth of subsidies, plus loan guarantees, in front of the first few plants that get built. Practically speaking, companies must apply to the NRC this year or next to qualify for the special assistance -- a process that can cost $50 million apiece.
"It's like a horse race," says Adrian Heymer, senior director of new plant development at the Nuclear Energy Institute, a Washington, D.C.-based trade organization. "Most companies are striving to submit applications as fast as they can."
At root is a sea change in views over nuclear power. From 1974 to 1994, spooked by skyrocketing costs, high interest rates and accidents in 1979 at the Three Mile Island plant in Pennsylvania and in 1986 at Chernobyl in the former Soviet Union, utilities canceled 96 nuclear projects in the U.S. Nuclear power currently makes up about 20% of the nation's electricity supply, compared with about 50% from coal, from 104 U.S. reactors.
But in a time of rising concern over price stability, dependence on foreign sources and global warming, nuclear power is on the cusp of a return. It doesn't rely on fossil fuels in tight supply or located in politically troublesome countries. Unlike coal, use of nuclear fuel doesn't create air pollution or carbon dioxide blamed for global warming.
Earlier this month, President Bush in his State of the Union address encouraged "safe, clean" nuclear power. Some existing plants have been getting license extensions from the federal government to keep them running, but the industry argues that aging plants eventually will need to be replaced.
Facing Opposition
Still, there's no certainty the industry will build plants, despite the money being spent on the effort. Development of the federal government's waste depository at Yucca Mountain, Nev., is behind schedule and could still face political opposition. Spent fuel is being stored at power-plant sites, a situation never intended to be permanent. Utilities are worried about the waste-disposal problem and construction costs, which spiraled out of control once before.
Meanwhile, opposition is gathering. The advocacy organization Public Citizen criticizes the "nuclear relapse" under way and asks opponents near proposed plants to "let us know how you'd like to help" block construction. Utilities expect some opposition but hope nuclear power's spruced-up image as a carbon-free resource will win over environmentalists.
Even the biggest and most profitable nuclear operators are avoiding regions where public sentiment is unpredictable. Big nuclear operator Exelon Corp. is "sniffing around for a site in Texas," says John Rowe, chairman and chief executive of the Chicago-based utility company. He says New Jersey could use more nuclear capacity, but he's "not sure the citizenry is ready for it yet" so he's steering clear. California prohibits nuclear development until there's a federal waste repository.
Focusing on the South
So far, the industry is focusing efforts almost exclusively on the South, where plant operators think acceptance of nuclear power never flagged and where local officials welcome the economic stimulus of multibillion-dollar projects. Applications will focus on sites utilities are confident will pass muster at the Nuclear Regulatory Commission -- locations that are adjacent to existing nuclear units or that were previously approved for nuclear development that never occurred.
Baltimore-based Constellation Energy Inc. has publicly identified two sites for development: the Calvert Cliffs plant in Maryland and -- a notable exception to the Southern concentration of the new sites -- the Nine Mile Point plant in upstate New York. Constellation is willing to chance receptivity because "we already operate there, so we think we can make it happen," says Tracy Imm, Constellation spokeswoman.
The 96 plants canceled long ago represented about half of the number of projects originally proposed. The cancellations were costly at the time, but they created a large inventory of locations now being given a second look. Utilities in many cases still own the sites.
For safety, security and public-relations reasons, nuclear plants typically are built in rural areas. Thus, the jobs they create loom larger than they would in cities. Plants are expected to cost $3 billion to $4 billion, each creating 2,000 construction jobs. Once completed, a plant needs 250 to 400 workers.
A consortium of utilities called NuStart Energy Development LLC is working with the NRC to speed up and smooth out the application and development process. It's working on applications for a new plant at Entergy Corp.'s Grand Gulf nuclear site in Mississippi, using a new General Electric Co. reactor design, and at Tennessee Valley Authority's Bellefonte site in Alabama, using a new reactor design from Westinghouse Electric Co., now controlled by a consortium led by Japan's Toshiba Corp. NuStart members -- Constellation, Duke Energy Corp., EDF International, Entergy, Exelon, FPL Group Inc., Progress Energy Inc., Scana Corp., Southern Co. and TVA -- control half the nation's nuclear capacity.
Utilities also are pursuing separate projects. Dominion Resources Inc. is considering its North Anna site in Virginia, and Southern is looking at its Vogtle site in Georgia; in each case, four units were permitted but only two built. "Atlanta is expected to double in the next 25 years," says Southern's Buzz Miller, senior vice president of nuclear engineering. "We're going to need a lot of new generation."
Legal Battle
The imperative to find sites has set off intense jockeying for position in some cases. One transaction, involving utility operator Duke Energy, has led to lawsuits, underscoring the eagerness to secure potential nuclear sites.
Duke announced its intention to pursue nuclear development last March, and it identified a 2,036-acre riverfront tract in Cherokee County, S.C., as its top pick. It was land Duke previously had owned, and decades earlier it received permission to build three nuclear reactors there. But after investing more than $600 million, Duke canceled the Cherokee projects and sold the parcel for $2 million in 1985.
A partnership, Mark V Land and Development LLC, approached Duke and other utilities to gauge purchase interest in 2005. When Duke learned Southern had emerged the apparent victor, it sued to block the sale. The suit was dismissed as groundless. Mark V, in a countersuit, accused Duke of abuse of process and trying to depress the price. Duke denies the allegations and the case is headed for jury trial. Duke and Southern now are teaming up to develop the site.
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