Austin faced with nuclear decision

AUSTIN (KXAN) - The City of Austin faces another big decision whether to buy a large part of a nuclear power plant in South Texas. The owner of the largest stake of a nuclear power plant in South Texas, also owned partially by Austin Energy, has approached Austin a second time to help expand the plant.

In February, the Austin City Council rejected an ownership stake in a proposed expansion of the South Texas Project, a nuclear reactor in Matagorda County. However, with its most recent letter, a spokesman for the energy company said NRG wants to give Austin a second chance.

"We really do need to know whether Austin is going to be a partner in this or not a partner in this," said NRG spokesman David Knox.

Knox said Austin’s original letter left open the option of participating in the plant, because Austin said it did not have enough time to look at the proposal. In its letter to Austin Energy and the Austin City Council, NRG disagreed with that assessment, saying San Antonio made a decision to participate in the plant with the same amount of notice. San Antonio's energy company, CPS energy owns a 50 percent stake in the expansion project, according to Knox.

Austin Energy is reviewing the letter from NRG, according to spokesman Ed Clark. Clark reserved any further comment, because of a confidentiality clause with NRG. City staffers said Mayor Will Wynn, City Manager Marc Ott, and Austin Energy General Manager Roger Duncan would meet Friday to discuss the proposal. NRG has asked Austin to make a decision within 90 days of its letter, dated Nov. 13.

Austin owns 16 percent of STP's two operating nuclear reactors which produces 400 megawatts of energy for Austin. NRG has petitioned the Nuclear Regulatory Commission to expand its operations by two more units, otherwise known as "STP 3 and 4."

If Austin decides to go ahead with the project, NRG is asking Austin to pay more than $36 million for project costs already underway. It is unknown the exact costs Austin would incur.

"It's amazing that NRG would be asking for $36 million for expenses to this point, when we were very clear in saying, 'No, we do not want to participate in any more nuclear,'" said Karen Hadden, Executive Director of the Sustainable Energy and Economic Development Coalition.

Hadden has followed the STP expansion project and said Austin Energy customers could pay more if Austin decides to get involved in the plant.

"It could impact our electric rates," said Hadden. "If this gets built, and there are problems like there was last time, our rates could go through the roof."

Initial estimates from NRG put the plant expansion at $6 billion, though Hadden said the SEED Coalition's analysis of the project put the costs at upwards of $17.5 billion. NRG said it is hoping to have the reactors online by 2016.