Nuclear Innovation North America (NINA), a nuclear development company jointly owned by NRG Energy and Toshiba, has signed an agreement with The Tokyo Electric Power (TEPCO), to partner in the two new nuclear units at the South Texas Project (STP).
TEPCO will invest $155m, through its US-based subsidiary, for a 10% share of NINA Investments Holdings’ interest in the STP expansion, STP units 3&4, once a conditional commitment for US Department of Energy (DOE) loan guarantee is secured for the project.
This $155m includes a $30m option payment to NINA Investments Holdings, enabling TEPCO to buy an additional 10% share of the company for an additional $125m within approximately one year.
Since the STP development project began in 2006, TEPCO, acting as technical consultant, has provided the benefit of its experience achieved in developing, constructing, commissioning and operating the Advanced Boiling Water Reactors (ABWR) to the project.
TEPCO also will continue to contribute to the essential task of training the workforce, which will build and operate STP 3&4. Provided the STP expansion project receives its Combined Operating License from the Nuclear Regulatory Commission (NRC) and its loan guarantee commitment from the DOE in a timely fashion, construction is expected to begin in 2012, with one unit coming online in 2016 and the other in 2017.
With this initial transaction, TEPCO would hold a 9.2375% interest in STP 3&4, bringing NINA’s share to 83.1375%, and leaving CPS Energy’s share at 7.625%. TEPCO would also be responsible for 10% of all STP expansion capital costs and up to 20% of these costs if the company exercises its option to increase its ownership to 20% of NINA Investments Holdings’ interest in the STP expansion.
TEPCO would then own approximately 18% of the project itself, or roughly 500MW of emission-free generation—enough to power about 400,000 households.
The agreement has been approved by the boards of both companies and is expected to close once a conditional commitment for a US loan guarantee is secured by NINA. In addition to assuming up to 20% of the capital cost of the project going forward, TEPCO will fund and commit a team of commercial and engineering employees to NINA to assist in project execution and project oversight.
The STP expansion is one of three projects in negotiation for a conditional commitment under the DOE loan guarantee program. In addition to US loan guarantees, NINA is seeking to diversify financing by actively pursuing additional loan guarantees through the Japanese export credit agencies.
If approved, US loan guarantees would cover an amount roughly equal to the investment in US labor and US-sourced equipment and commodities, while the Japanese loan guarantees would cover the Japanese investment in advanced nuclear expertise and equipment not available in the US.
NINA recently announced an agreement for the Building and Construction Trades Department (BCTD) of the AFL-CIO to provide skilled union labor to construct STP 3&4.