Platts - Tuesday, February 27, 2007 http://www.platts.com ------------ SE to begin Mochovce-3 and -4 construction in late 2007 London (Platts)--27Feb2007 Slovenske Elektrarne to begin Mochovce-3 and -4 construction late this year, after confirmation that Enel, which owns 66% of the Slovak electricity company, will invest in the two nuclear units as part of a $4.2 billion development plan for SE. At a joint press conference February 23, Enel CEO Fulvio Conti and Slovak Republic President Robert Fico announced an agreement on the reactor completion project, which was one condition of Enel's takeover of SE last year. An SE spokesman said that after completion of a feasibility study this April, the utility will likely issue a tender for the completion project. Slovak officials have said the units will most likely be based on a modern version of the original Russian VVER-440 design. Enel expects to invest some $2.4 billion in Mochovce-3 and -4; according to the Slovak government, the plant could start operating in 2012 or 2013. SE had invested about $761 million in the units up to August 2004, according to the Slovak Ministry of Economy. ------------ Kansai Electric officals may face charges for 2004 Mihama mishap Tokyo (Platts)--27Feb2007 Investigations by the Fukui prefectural police into a fatal accident at Kansai Electric's Mihama nuclear power plant in western Japan in 2004 have raised suspicion of professional negligence by six company officials. The results of the investigation were handed over to prosecutors Monday, the Japanese media reported. The six officials from Kansai Electric's Wakasa branch were aware that the pipe at the 826 MW Mihama No. 3 reactor, which ruptured in August 2004, killing five and injuring six, had never been checked for corrosion since the reactor started up in 1976, according to the police report. The police said that in early July 2004, three sections of a pipe at the company's Ooi No. 1 reactor were found to have worn thinner than allowed by government standards. Kansai's Wakasa branch set up a panel to inspect all 11 of the company's reactors in Japan and determine the condition of the pipes, The Daily Yomiuri reported. The police initially sought to hold the head of the Wakasa branch liable for the Mihama accident. However, their investigations determined that his subordinates had not kept him informed about the situation at the plant, Kyodo News reported. The Fukui District Public Prosecutor's Office will decide whether to indict the six by the end of March, The Daily Yomiuri reported. Kansai Electric restarted the No. 3 reactor on January 10. The company currently has eight nuclear units with a combined capacity of 8.253 GW in operation, accounting for 84.5% of its total capacity of 9.77 GW over 11 units across Japan Nuclear power outages in Japan are closely watched in the oil and gas markets as they can lead to higher demand for alternative power generation feedstocks such as fuel oil, crude and LNG. The power companies usually boost thermal power generation to compensate for nuclear power outages. ------------ Point Beach sale gets antitrust clearance Washington (Platts)--26Feb2007 FPL Energy's proposed purchase of Point Beach presents no antitrust concerns, US antitrust authorities said February 26. FPL Energy, an FPL Group subsidiary, announced in December 2006 it would buy the two-unit station from Wisconsin Electric Power Co. for $998 million. In an early termination notice under the Hart-Scott-Rodino Antitrust Improvements Act, the US Federal Trade Commission said neither it nor the Justice Department's Antitrust Division plans to take enforcement action on the acquisition. The Point Beach-1 and -2 PWRs are rated at 530 MW each. ------------ EDF to inspect steam generators at all of its 900-MW-Class PWRs London (Platts)--26Feb2007 EDF plans to inspect steam generators at all 34 of its 900-MW-Class PWRs after finding an unexpectedly high rate of crud formation between tubes and tubesheets at three reactors in the series, French nuclear regulatory agency ASN said in a notice dated February 21. The agency said Electricite de France had informed it January 29 that inspections had revealed higher-than-anticipated buildup on "at least" three reactors -- Cruas-1, Cruas-4, and Chinon-B4. The phenomenon could threaten tube integrity, ASN said. It said EDF could deploy a chemical cleaning process but the process is "complex" to implement and requires regulatory approval. EDF is seeking the cause of the problem, which has been rated at Level 1, the lowest level on the International Nuclear Event Scale. ------------ NRC chairman Klein calls Palo Verde's problems 'significant' Washington (Platts)--23Feb2007 Arizona Public Service's Palo Verde nuclear plant has "significant performance problems" that must be addressed, Nuclear Regulatory Commission Chairman Dale Klein said Friday after touring the plant. Klein said in a written statement issued Friday by the agency that NRC inspectors have found a "tendency at Palo Verde to address symptoms rather than get to the heart of why a problem arose," adding that "this must change." He said status quo at the station, the largest nuclear plant in the US, "is not acceptable." Klein issued the statement a day after NRC downgraded the Arizona Public Service station's performance rating, classifying the once-stellar nuclear power plant as one of the poorer performing nuclear stations in the US. NRC Spokesman Victor Dricks said Friday that all three Palo Verde reactors were downgraded, subjecting them to increased NRC oversight. During the past two years, the station has grappled with forced outages and equipment problems. Klein said APS has not been completely successful implementing the station's existing performance improvement plan. APS will have to re-examine the plan, he said, and NRC "will have to give our approval to it as they go forward." --Elaine Hiruo, elaine_hiruo@platts.com ------------ US NRC to increase its oversight of Palo Verde nuclear facility Washington (Platts)--22Feb2007 The US Nuclear Regulatory Commission Thursday downgraded the status of the Palo Verde nuclear facility, classifying it as one of the poorer performing plants in the US and subjecting it to an even higher degree of agency oversight. The commission downgraded the plant when it issued a so-called "white finding" for an emergency diesel generator problem last year at the three-reactor station. While a white finding reflects a low-to-moderate safety significance, NRC Region IV Administrator Bruce Mallet said the problem "was caused by performance deficiencies similar to others noted by NRC at Palo Verde since 2004." He added in a statement that the agency "will determine the appropriate follow-up actions to ensure performance improvements at Palo Verde," which was once considered a stellar nuclear plant. Arizona Public Service spokesman Jim McDonald said the utility will not appeal the downgrading. All three units joined FirstEnergy Nuclear Operating's Perry reactor in NRC's multiple/repetitive degraded cornerstone category, or column 4. Only the category of unacceptable performance is lower. APS operates the plant. It can take a utility several years to demonstrate a sufficient improvement in its reactor performance in order to return to a normal level of NRC oversight. Palo Verde, the largest nuclear power plant in the US, is located outside Phoenix and has been grappling with equipment problems and forced outages during the last two years. --Elaine Hiruo, elaine_hiruo@platts.com ------------ US FERC approves $380 mil Palisades nuclear plant sale to Entergy Washington (Platts)--22Feb2007 The US Federal Energy Regulatory Commission gave Consumers Energy the go-ahead Wednesday to sell its 798-MW Palisades nuclear plant to Entergy Nuclear Palisades as long as Entergy agrees not to raise wholesale rates for Edison Sault Electric through the end of 2007. If Entergy does not agree to that condition, FERC will conduct a full-fledged hearing of the transaction's rate effects on the utility. FERC also approved a market-rate tariff for Entergy Palisades, which effectively would make it a merchant plant instead of a utility rate-based facility. As part of the sales agreement, Entergy will sell all the plant's output to Consumers under a 15-year contract that Consumers has estimated will save its customers $200 million over the life of the deal. Edison Sault is one of the Palisades plant's two wholesale requirements customers. The other is Alpena Power, whose rates will not be affected, according to FERC's order. Edison Sault's contract expires December 31 and FERC said the parties would negotiate on rates for the ensuing period. FERC said the price negotiation and an option for either Palisades or Edison Sault to terminate the contract if they reach an impasse constitute an "open season," which the commission has found in other cases to be acceptable protection for ratepayers. As it does in many cases, FERC urged the companies to reach a settlement early, for which FERC will name a settlement judge. Other than the issue of impacts on that Edison Sault's rates, FERC said, the $380-million sale of the plant to Entergy raises no significant questions of market power or other matters that FERC concerns itself with when judging mergers and acquisitions. The commission approved Entergy Palisades' market-based-rate tariff for the company's wholesale sales into the Midwest Independent Transmission System Operator region. The transaction is still under review by the Michigan Public Service Commission, where conflicts about retail rate issues should properly be handled, FERC said. Some groups, including the Michigan Environmental Council and Public Interest Research Group in Michigan, objected that having Palisades output sold at wholesale under market-based rates, instead of at retail cost-based rates under state jurisdiction, is contrary to the public interest unless protected measures are adopted. --Kathy Larsen, kathy_larsen@platts.com ------------