Platts - Friday, May 30, 2008 http://www.platts.com ------------ South Carolina PSC OKs Duke request for new nuclear expenses Washington (Platts)--29May2008 South Carolina regulators approved Duke Energy Carolinas' request to make pre-construction expenditures through the end of 2009 on the proposed William States Lee III nuclear plant in Cherokee County, South Carolina. The directive issued May 28 by the Public Service Commission covers only the South Carolina allocable portion, or 28%, of up to $230 million in costs for which DEC is seeking approval. The remaining costs are allocable to North Carolina customers, and that share of the expenses will have to be approved by North Carolina regulators. The planned two-unit plant would supply electricity to DEC?s customers in South Carolina and North Carolina. In its directive, the seven-member PSC said it found DEC?s decision to incur the costs to be reasonable and prudent. The PSC action gives DEC the opportunity to recover such costs in a future rate proceeding, but does not guarantee the cost recovery. In his motion, PSC Chairman G. O'Neal Hamilton said he believed the action must be taken to preserve the expansion of nuclear generation as an option for the company in the 2018 timeframe. The directive also overruled Friends of the Earth's objections to DEC keeping information about reactor costs confidential. FOE was the sole intervenor in DEC's request for the PSC approval. ------------ Palo Verde-2 experiences 'unusual incident,' ramp-up delayed: APS Washington (Platts)--29May2008 Arizona Public Service has launched an investigation of an "unusual incident" that occurred Wednesday during the ramp-up of its 1,245-MW Palo Verde-2 nuclear power reactor, which has been offline for refueling since April 1, the utility said Thursday. "This was not an emergency situation or a significant event, but what happened was unusual," said APS spokesman Jim McDonald. "We will do a very thorough root cause analysis so we understand what took place, and then finish up the outage," McDonald said. Palo Verde-2 was originally expected to be offline about 45 days. According to a event report filed by APS with the US Nuclear Regulatory Commission, the unit "operators manually tripped the reactor, as directed by procedures, when four" control rods, "slipped to the fully inserted position while conducting low power physics testing following Unit 2's fourteenth refueling outage." "Unit 2 was critical and at normal operating temperature and pressure prior to the trip. Following the manual reactor trip all remaining [control rods] inserted fully into the reactor core. This was an uncomplicated reactor trip. No emergency classification was required," the report said. "Unit 2 is stable at normal operating temperature and pressure...and there were no adverse safety consequences as a result of this event. The event did not adversely affect the safe operation of the plant or the health and safety of the public," it added. The same-sized units one and three at the Wintersburg, Arizona, station are currently operating at full capacity, Fallon said. Palo Verde-3 in 2007 was in Column 4 of NRC's action matrix, requiring the highest level of agency oversight short of a plant shutdown. --Daniel Guido, daniel_guido@platts.com ------------ NRC seeks more information on Oyster Creek license renewal Washington (Platts)--28May2008 The NRC wants more information on Oyster Creek's license renewal, the commission said in a May 28 order. AmerGen, the Exelon subsidiary that operates Oyster Creek, committed during the plant's license renewal safety review last year to perform a structural analysis of the steel containment drywell shell prior to expiration of the current license in April 2009. That analysis would assess whether the partially corroded shell would be likely to maintain sufficient thickness during 20 years of extended operation. In its May 28 order, the commission asked AmerGen and six public interest groups challenging the license renewal to "explain whether additional analysis is necessary," including sensitivity analyses. Briefs on the issue are due June 11. NRC staff and an Atomic Safety and Licensing Board concluded last year that Oyster Creek could operate safely for another 20 years, but the board's decision was appealed to the commission by the six groups. ------------ Spot uranium price unchanged at $60/lb; buyers on prowl though Washington (Platts)--28May2008 The spot price of uranium remained at $60/lb U3O8 over the past week, according to the latest reports of both Ux Consulting and TradeTech. There is, however, a sense among market analysts that the price may be inching up slowly, with some buyers said to be willing to pay $61/lb U3O8. "We're starting to see a little more buying action on the part of utilities," said one source, adding that there seems to be a growing sense that "$60/lb might be the magic number" for covering unfilled requirements. The US Department of Energy's Energy Information Administration said that as of December 31, 2007, unfilled utility requirements in the US over the period 2008-2010 totaled 15 million lb U3O8 equivalent. But one analyst also said there was a possibility that a seller that needs to make a sale right now might let U3O8 go for "$59/lb and change." There is, however, more demand looming, said analysts. Taiwan Power said last week it wants to buy 300,000 lb U3O8 equivalent. Bids are due June 5. Florida Power and Light has also indicated that it would like to buy 100,000 lb U3O8 through an auction. The auction had been scheduled for May 29, but has been postponed until June 5. And a number of analysts expect public investment funds Uranium Participation and Nufcor Uranium to enter the market in the next month or so. The Platts NuclearFuel range for the week was $58-$65/lb U3O8. ------------ US-Russia nuclear pact prompts two lawmakers to seek GAO review New York (Platts)--28May2008 Two senior members of the US House of Representatives are questioning the factual basis of the Bush administration's nonproliferation defense of Russia's nonproliferation record, a key part of the justification for the administration's decision to sign a nuclear cooperation agreement with Moscow. The lawmakers, US Representatives John Dingell and Bart Stupak, both Michigan Democrats, asked the Government Accountability Office to check the Nuclear Proliferation Assessment Statement, which the Bush administration submitted to Congress this month along with the text of the cooperation agreement with Russia. Such pacts are known as "123 agreements" because section 123 of the US Atomic Energy Act requires the US to have such agreements with its nuclear trading partners. Dingell is chairman of the House Energy and Commerce Committee and Stupak heads the panel's Oversight and Investigations Subcommittee. In a letter last week, Dingell and Stupak asked GAO for "assistance in reviewing the development" of the NPAS. The NPAS, an analysis that US law requires, concluded that the deal would be "compatible with the nonproliferation program, policy, and objectives" of the US. In their letter and accompanying statement, the lawmakers highlighted questions about Russian nuclear cooperation with Iran. The NPAS says that the US had concerns about Russia's work on Iran's Bushehr power reactor, but that the concerns are being addressed by arrangements Russia has made for supplying the fresh fuel for the reactor and taking back the spent fuel it would generate. The unclassified version of the NPAS also says that "additional details on the proliferation concerns associated with Russia-Iran cooperation and efforts to mitigate them are presented in the classified annex." Dingell and Stupak asked GAO, which is the investigative arm of Congress, to include the classified annex in its review. One of the issues the lawmakers asked GAO to address is "whether the NPAS conclusions are fully supported and whether there is contradictory information that was omitted which could invalidate, modify or impair" the report's conclusions or the basis for recommending support for the 123 agreement. The NPAS is prepared for the president by an interagency team, headed by the State Department. --Daniel Horner, daniel_horner@platts.com ------------ EDF suspends concrete pouring at Flamanville-3 Paris (Platts)--27May2008 Electricitie de France has suspended concrete pouring at Flamanville-3 after the discovery of "anomalies" in the construction project, ASN said May 27. France's Nuclear Regulatory Authority, or ASN, found the anomalies, which involve non-conformances in the arrangement of some steel rebar compared to blueprints, during an inspection in March and again May 21. ASN also cited cracks in the basemat of the nuclear island of the 1,600-MW-class EPR. ASN said there were no safety problems per se, but that EDF had to improve quality control. EDF said it was premature to talk of delays in the commercial operation of the reactor which is scheduled for 2012. ------------ McCain may back nuclear approach pushed by climate bill authors Washington (Platts)--23May2008 Presumptive Republican presidential nominee John McCain has yet to back a specific approach to enhance nuclear power under the leading US Senate climate bill, but is leaning toward an approach being developed by the lead authors of the legislation, an aide said Friday. The climate-change legislation (S. 3036) is authored by long time McCain allies Senator Joseph Lieberman, Independent-Connecticut, and John Warner, Republican-Virginia. "We're trying to figure out whether we're going to work with them on that," an aide to the Arizona senator said in an interview. The Senate is scheduled to begin floor debate on the bill, which would create a GHG cap-and-trade system, on June 2. Emissions would cut industry emissions of GHGs by about 70% below 2005 levels by 2050. McCain in recent weeks has said in recent weeks he would support the Lieberman-Warner bill as long as it has a nuclear power title he finds acceptable. He has proposed his own cap-and-trade system as part of his campaign. In addition, he and Lieberman have cosponsored cap-and-trade legislation three times over the past five years. Nuclear power figures to be a serious point of debate when the bill hits the floor. Senator Barbara Boxer, chairwoman of the Environment and Public Works Committee, is another sponsor of the climate bill but has long been opposed to new nuclear plants. She, Lieberman, and Warner introduced a one-page amendment earlier this week that merely stated that the climate bill would help nuclear power because it is a zero-emission technology. Lieberman and Warner said Wednesday they hope their own joint amendment will help attract support for the climate-change bill. The amendment will be "relatively non-controversial but real" in its efforts to bolster the industry, Lieberman said. Lieberman said the amendment would aim to support equipment purchases, worker training, and address concerns that components of nuclear reactors are largely built overseas, he said. He added that the amendment would not set a specific goal for additional nuclear generation or try to speed up the plant permitting process. Nor is the amendment expected to address hurdles to nuclear waste storage at the Yucca Mountain repository in Nevada. --Alexander Duncan, alexander_duncan@platts.com ------------ Suez says it has ended takeover talks with British Energy Barcelona (Platts)--23May2008 France's Suez said May 23 it has ceased discussions with British Energy about a potential takeover offer for the company. The statement came only three days after Suez confirmed it was in discussions with BE about the future of nuclear power in the UK, as well as a possible offer for BE itself. Suez said May 23 that discussions "relating to a potential offer for British Energy have now ceased" and that the company's priority is to complete its long-pending merger with Gaz de France. The company added that UK takeover rules would now prohibit it from re-entering the bidding for BE before the conclusion of its merger with GDF. Suez did not respond to a request for information about when the merger with GDF might conclude. ------------