CPS Energy Asks Court to Define STP Expansion Nuclear Pact
San Antonio’s CPS Energy on Sunday filed a petition with a Bexar County court to define the liability faced by the utility and NINA (Nuclear Innovation North America), a Toshiba-NRG Energy consortium, if both parties pulled out of a project to expand the South Texas Project (STP) nuclear plant near Bay City, Texas.
CPS Energy, the largest municipally owned utility company in the U.S., has reportedly invested nearly $300 million in the project’s engineering and planning so far—though a permit to build and operate the reactors won’t be granted until 2012. The “value of participation and related rights in and improvement to the project site” are worth more than $2 billion, CPS said in the court filing (PDF).
The action follows a substantially higher preliminary cost estimate from Toshiba, the contractor chosen to build Units 3 and 4 at the STP plant, which was reportedly $4 billion more than CPS Energy’s preliminary total project cost of $13 billion.
When news of the higher cost estimate broke this October, the information caused the postponement of a proposed $400 million bond issue for nuclear development. It also prompted the CPS Energy Board of Trustees to call for an immediate investigation into how and when the utility’s management became aware of it.
A draft of the investigation’s report released on Monday showed that some officials knew that the $13 billion cost estimate rolled out last summer was less than what Toshiba was asking for, according to the San Antonio Express.
The report will be made public today. Its conclusions support CPS management’s assertion that Toshiba’s ‘unofficial preliminary estimate’ was only ‘a posturing/bargaining position,’” the newspaper said.
The scandal implicates CPS Energy Board Chair Aurora Geis, who—according to San Antonio Current—today turned in her resignation. San Antonio Mayor Julián Castro is also embroiled in the controversy: The report alleges that he knew of the higher cost estimate before news of it broke in late October.
The petition exploring the utility’s liability if it withdraws from the project in no way implies any wrongdoing on anyone’s part in the STP expansion project, said CPS Energy Acting General Manager Jelynne LeBlanc-Burley in a statement on Monday. “This is just a way for us to clearly define the current agreements between us and NINA, to fully understand all legal obligations and to help us better prepare for the updated cost estimate we expect from Toshiba by Dec. 31.”
“CPS Energy will continue to honor obligations as an owner in the [STP], but to honor those obligations, there can be no ambiguity in the current agreements for us to protect CPS Energy customers,” Burley continued.
According to the filing, CPS Energy is asking for an expedited ruling due to the short timeframe in which a new estimate is expected from Toshiba. The utility expects to propose a plan of action to the San Antonio City Council by mid-January.
Sources: CPS Energy, San Antonio Express, San Antonio Current