Two groups to seek new U.S. nuclear plant license

The two consortiums intend to work with the U.S. Department of Energy to test a new process from the U.S. Nuclear Regulatory Commission for obtaining a license for an advanced nuclear power reactor.

There is no plan at this time to actually build a new nuclear reactor, members of both groups emphasized.

No company has followed through with plans to build a new nuclear plant since the worst nuclear disaster in U.S. history, at the Three Mile Island plant 25 years ago.

Dominion Resources said the first group of four companies submitted a proposal a week and a half ago for a license for Dominion's North Anna site in Virginia.

The proposal is a precursor to the actual application. The application process is expected to take six years and cost about $500 million, said David Christian, senior vice president of nuclear operations at Dominion Resources, which is part of the consortium.

Dominion's group also includes AECL Technologies Inc., a subsidiary of Canada's nuclear power reactor developer and designer AECL; Hitachi America, a subsidiary of Japanese conglomerate Hitachi Ltd. ; and privately held engineering company Bechtel.

A second consortium of seven companies on said it plans to submit its own proposal "in the next few weeks," said Marilyn Kray, vice president of project development at Exelon Nuclear, a division of Exelon Corp. Exelon Corp. is a member of the second group, which has yet to decide on a potential site.

The energy companies in the second consortium are Exelon and Entergy Corp. , the No. 1 and 2 U.S. operators of nuclear plants; Constellation Energy Group ; Southern Co. ; and France's state-owned electric company Electricite de France [EDF.UL].

It also includes two nuclear reactor vendors: Westinghouse Electric Co., a unit of British state-owned nuclear company BNFL Plc; and General Electric Co. Both groups want to take advantage of a cost-sharing initiative where the Department of Energy would pay for half the application cost and the companies the other half.

Should the DOE agree to pick up half the cost of its proposal, Dominion said it would pay no more than $61 million over the six-year application process.

For the other consortium, each of the five energy companies will contribute a total of $35 million, or $1 million a year in cash plus other services for seven years.

The amount the two vendors contribute will depend on the project's cost.

That consortium plans to complete its application and submit it in 2008. The Nuclear Regulatory Commission is expected to make a decision on the application by late 2010, after which any of the consortium's members could build a plant under the license.

As for the projected cost of a plant, a spokesman for Exelon Nuclear said: "Nobody really knows. In fact, one of the outcomes of the application will be a much better understanding of what one of these plants will actually cost."

Soaring construction costs and safety concerns after the partial reactor meltdown at the Three Mile Island power plant in 1979 have kept U.S. utilities from building new nuclear plants.

Environmental groups also argue that subsidies handed out to nuclear plants are expensive for taxpayers.

"After you massively subsidize these plants, what you get is a dangerous reactor that generates highly radioactive waste," said Anna Aurilio, legislative director for U.S. PIRG, a consumer and environmental advocacy group. "This energy source is simply too expensive and too dangerous for America." But because of a growing shortage of natural gas in the United States and concerns over emissions from older coal-fired plants, utilities are looking at the nuclear option again.

The planned applications come at the behest of the Department of Energy. The DOE recently asked energy companies to test the licensing process the Nuclear Regulatory Commission established in 1992 in a bid at streamlining. The new process has never been tested.