Proposed nuclear reactors to cost up to $13 billion

CPS Energy nuclear expansion proposes reactors at the South Texas Project near Bay City with NRG Energy, funded by bond financing and rate increases, pending NRC licensing, amid concerns cost overruns and excess power sales.

Two additional nuclear reactors being considered by San Antonio's public utility will cost up to $13 billion, according to new cost estimates.

CPS Energy officials want to build the $10 billion to $13 billion reactors at the South Texas Project outside Bay City in Matagorda County as proposed, saying its the most cost effective way to get additional power. CPS Energy owns 40 percent of the project. New Jersey-based NRG Energy owns the remaining portion, and the utilities would split the cost.

San Antonio ratepayers would be hit with a 5 percent rate increase every other year for the next decade to pay for the expansion, officials said Monday. But that rate projection assumes CPS can sell excess power to other utilities, as the city is at the center of a nuclear debate over the plan, something critics are wary of.

"We believe the long-term lowest price option is nuclear," said Steve Bartley, CPS interim general manager, noting TEPCO interest in the Texas project. "Even if we decide not to move forward, we will have a need for bill increases over the next 10 years."

Business groups have supported the nuclear expansion, but others have warned that, with NRG considering walking away from expansion plans in some scenarios, the project could easily suffer from cost overruns.

"My confidence level about the $13 billion figure is about a 6 or a 7 on a scale of 1 to 10," said City Councilman John Clamp. "That amount can only go up. We need to do some more risk analysis."

The City Council would need to agree to issue bonds, following a utility settlement related to the plant, to help fund the construction. If approved, building wouldn't likely start until at least 2012, when the Nuclear Regulatory Commission is expected to grant a license for the expansion.

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