Constellation Energy says that it is willing to sell its share in UniStar Nuclear to partner EDF for $1 in order to keep a new nuclear power plant project in the USA on track.
The US utility has published a letter to EDF, dated October 15th 2010, in which it offers to “significantly restructure” the UniStar partnership because of problems surrounding government loan guarantees that have been offered to the Calvert Cliffs 3 nuclear power project in the state of Maryland.
It has asked EDF for a reimbursement of $117 million related to Constellation’s share of the generic development and design costs for the US EPR project.
The move follows an offer made by EDF to keep the project on track, either by buying Constellation’s 50 per cent stake in their UniStar Nuclear joint venture, or by bearing 100 per cent of the risk of developing Calvert Cliffs 3 until construction begins.
EDF’s offer is conditional on Constellation agreeing to cancel an option in a 2008 agreement between the two companies that gives the US firm the right to sell power stations to EDF for up to $2 billion. EDF says that the option “is not exercisable under present circumstances” and that any attempt by Constellation to exercise the option would cause “serious and highly disruptive” delays for Calvert Cliffs 3.
Constellation has urged EDF to treat their dispute over the put option – which has been going on for several months – separately. “That commercial dispute should not be used to hold the prospect of Calvert Cliffs 3 hostage,” says the US firm in its letter to EDF.
Constellation said earlier in October that it had been forced to pull out of the Calvert Cliffs 3 development by the high cost of government loan guarantees that are designed to protect the project’s financing. It said in a letter to the US Department of Energy that the costs were “unreasonably burdensome” and would create “unacceptable risks and costs” for the company.