Platts - Friday, May 22, 2009 http://www.platts.com ------------ FERC approves Exelon's hostile takeover bid for NRG Energy Washington (Platts)--21May2009 The Federal Energy Regulatory Commission, or FERC, May 21 approved Exelon's $6.2 billion hostile takeover bid for NRG Energy. NRG's board of directors has rejected the offer, saying it significantly undervalues the company. The combination of Exelon and NRG would create the largest generation company in the US with about 48,000 MW of capacity. Before the deal could close, it would need many state and federal regulatory approvals, along with NRG shareholder approval. Exelon is the largest nuclear power plant operator in the US, with 17 reactors totaling about 17,000 MW. NRG owns 44% of the South Texas Project-1 and -2 reactors. ------------ US House committee narrowly rejects effort to add nuclear in RES Washington (Platts)--21May2009 A US House of Representatives panel that is analyzing legislation to cap man-made carbon emissions and mandate standards to boost renewable electricity by 20% narrowly rejected Thursday an amendment to allow nuclear power to be considered a renewable energy source. Michigan Republican Fred Upton's amendment failed in a 29-26 vote, but attracted support from four Democrats -- John Barrow of Georgia, Mike Ross of Arkansas, Baron Hill of Indiana and Zack Space of Ohio -- on the House Energy and Commerce Committee. The committee is expected to debate several potential amendments before taking a final vote on the legislation (H.R. 2454) Friday. The bill's chief sponsors -- Committee Chairman Henry Waxman, a California Democrat, and Energy and Environment Subcommittee Chairman Ed Markey, a Massachusetts Democrat -- opposed the Upton amendment and urged their colleagues on the panel to vote it down. The RES sets a national requirement for electricity suppliers to get at 20% of their power from renewable resources that include wind, solar, biomass, geothermal and qualified hydroelectric sources by 2020. Up to a quarter of that can come from energy savings. A governor may appeal for a 12% Renewable Electicity Standard with an additional 8% efficiency requirement if it cannot meet the original mandate. Waxman said he opposed Upton's amendment because the bill's current neutral definition of renewable resource would be altered so that nuclear power, which runs on uranium, be considered renewable. In defining renewable energy, Waxman said, nuclear is not what [the bill drafters] had in mind, he added. The committee's senior Republican, Joe Barton of Texas, said that allowing nuclear power, which does not emit carbon, to be among qualified renewable energy resources under the bill's RES would remove the politics of selecting preferred technologies to meet the standard. --Cathy Cash, cathy_cash@platts.com ------------ Obama approves US-UAE nuclear cooperation agreement Washington (Platts)--20May2009 President Barack Obama has approved a US-United Arab Emirates agreement on civilian nuclear cooperation and authorized Secretary of State Hillary Clinton to carry out its implementation. In a May 20 statement issued by the White House, Obama said he has determined that the agreement "will promote, and not constitute an unreasonable risk to, the common defense and security." The US and the UAE signed the agreement, which has been touted as a template for civilian nuclear energy programs in the Middle East, on January 15. Under that accord, the UAE vows not to develop indigenous programs for uranium enrichment and spent fuel reprocessing. The agreement also gives the US the right to cut off cooperation if the UAE pursues such programs. Under the US Atomic Energy Act, a nuclear agreement can enter force after 90 days of a so-called continuous session of Congress after the president submits it, if lawmakers do not pass legislation disapproving it. During that period, Congress can also vote to approve it, or approve it with conditions. ------------ Obama approves US-UAE agreement on civilian nuclear cooperation Washington (Platts)--20May2009 President Barack Obama has approved a US-United Arab Emirates agreement for civilian nuclear cooperation and authorized Secretary of State Hillary Clinton to carry out its implementation. In a statement Wednesday, Obama said that he has determined that the agreement "will promote, and not constitute an unreasonable risk to, the common defense and security." The US and United Arab Emirates signed the agreement, which has been touted as a template for civilian nuclear energy programs in the Middle East, on January 15. Under the accord, the UAE vows not to develop indigenous programs for uranium enrichment and spent fuel reprocessing. The agreement also gives the US the right to cut off cooperation if the UAE pursues such programs. Under the US Atomic Energy Act, a nuclear agreement can enter force after 90 days of a so-called continuous session of Congress once the president submits it, if lawmakers do not pass legislation disapproving it. During that period, Congress can also vote to approve it, or approve it with conditions. ------------ GE Hitachi, Larsen & Toubro agree to develop ABWRs in India Washington (Platts)--19May2009 GE Hitachi Nuclear Energy and Larsen & Toubro Ltd. will develop ABWRs in India under a memorandum of understanding announced May 19 by GE Hitachi. GEH said it and L&T, an Indian engineering and construction company, "will plan for the construction and engineering management resources that will be needed" to build a proposed Advanced Boiling Water Reactor with Nuclear Power Corp. of India Ltd. GEH and Npcil are discussing a site for the "potential multi-unit ABWR plant," it said. GEH said it will "serve as the technology provider of certain ABWR nuclear island equipment and components, as well as related engineering and technical advisory services." L&T "will collaborate with GEH to engineer, manufacture, construct and provide certain construction management services," it said. The agreement "is an important part of GEH's strategy to establish an extensive network of local suppliers" for the ABWR project, GEH said. Earlier this year, L&T announced separate MOUs with Westinghouse to develop AP1000s in India and with Atomstroyexport to develop VVERs in India and elsewhere. ------------ Cap-and-trade bill to include nuclear power: US lawmaker Hoyer Washington (Platts)--19May2009 US lawmakers will include an amendment promoting nuclear power to a cap-and-trade carbon emissions bill now being discussed in a mark-up session, US House of Representatives Majority Leader Steny Hoyer told nuclear industry officials Tuesday. Hoyer, a Maryland Democrat, told a Nuclear Energy Institute conference in Washington that the amendment would be offered by Michigan Democrat John Dingell at the markup of the energy legislation. Hoyer said the amendment would make clear in the Department of Energy's $18.5 billion Title 17 loan guarantee program for new reactors that a final "term sheet" from the Secretary of Energy constitutes a binding commitment. A term sheet is an agreement with specific terms for the loan guarantee. "That will allow energy projects to obtain the non-federal financing they need with surety that the federal government will proceed," Hoyer said. The title also adds Davis-Bacon prevailing wage protections to the Title 17 program. The Depression-era Davis-Bacon Act requires contractors on federally funded construction work to pay craft labor at least the hourly wage prevailing in the area for each craft as set by the Department of Labor. The amendment would also create a DOE Clean Energy Deployment Administration, which would provide financing to "a wide range" of energy technologies, including nuclear projects. The administration's members would be appointed by the president and confirmed by the Senate. Hoyer said the provision has "broad support among Democrats of many different political views and from many different regions." Hoyer noted that a new funding mechanism for energy projects, in the form of an Energy Bank, is being debated in committee on both sides of Congress. But he said such a program should not displace existing programs, such as the one offering loan guarantees. Hoyer said the issue of nuclear waste "deserves serious, bicameral talks, and possibly even a national commission." President Barack Obama's administration plans to kill the federal program aimed at storing nuclear waste at a repository at Yucca Mountain, Nevada. "As long as nuclear power remains an important part of our national energy portfolio, nuclear waste will be a national issue -- and the House will have an important role to play in the debate," Hoyer said. Hoyer said nuclear power has a part in meeting American's nuclear energy needs and he would continue to advocate "a policy of balance," including renewables, coal with carbon capture, and investment in energy efficiency. --Tom Harrison, tom_harrison@platts.com ------------ USEC, Areva settle dispute over uranium enrichment Washington (Platts)--18May2009 USEC and Areva have settled a seven-year legal conflict over USEC's allegations of uranium dumping, allowing both companies to recover substantial sums from an escrow account and to resolve issues that could have continued for up to five more years, the companies said May 18. In separate statements, the companies said they would drop challenges to an antidumping order the US Department of Commerce imposed in 2002 on imports of French low-enriched uranium from Areva affiliate Eurodif. Both companies said the order will remain in place until the next review by US authorities in 2012. Under the settlement, Areva will recover $80 million in antidumping duties from the $213.5 million it put in escrow since 2002 because of the order, Areva spokeswoman Pauline Briand said May 18. USEC will pocket $70.9 million and Commerce will receive $10.6 million, she said. As part of the agreement, Areva will buy SWU (separative work units, a measure of enrichment) from USEC for delivery to US customers in 2009 and 2010. Briand said she couldn't give a quantity or value for that deal, but did say the quantity of SWU was "limited" and "not significant compared to the [size of the] US market," adding the deal was "advantageous" for Areva. In USEC's statement, Senior Vice President Peter Saba said the agreement "eliminates any further resource drain" on both companies, allowing USEC to secure additional funds for both ongoing operations and investment in the American Centrifuge Plant under construction in Piketon, Ohio. ------------ Exelon to 'delay or cancel' plans for new reactors, CEO says Washington (Platts)--15May2009 Exelon will "delay or cancel" plans to build two reactors in Texas because that project was not among finalists selected by DOE for the first round of loan guarantees, Exelon Chairman/CEO John Rowe said after his speech at the National Press Club in Washington May 15. Exelon has applied to the NRC for a combined construction permit-operating license to build two reactors using GE Hitachi's ABWR design at a greenfield site in Victoria County, Texas. Rowe has consistently said that, given the high capital cost of the project, DOE loan guarantees will be "imperative" for Exelon to move ahead. Industry sources said this week that the final four companies in the running for loan guarantees are: Southern Nuclear Operating Co. for two AP1000s at the Vogtle nuclear power plant site in Georgia, South Carolina Electric & Gas for two AP1000s at the Summer site in South Carolina, NRG Energy for two ABWRs at the South Texas Project site in Texas, and Constellation for one US-Evolutionary Power Reactor, or US-EPR, at the Calvert Cliffs site in Maryland. Rowe said he is not optimistic about getting nuclear power included in renewable energy portfolio standards now being considered by Congress, though whether power uprates at existing power reactors can be included is "still being argued." Getting sustained support for new nuclear power in Congress "will remain a very difficult challenge until large majorities of both parties conclude that it's needed," he said. However, "more and more people will come to realize" that any low-carbon generation strategy that is "competitive and effective" must "include a large component of nuclear energy," Rowe said. ------------