Constellation reduces spending on Calvert Cliffs

30 July 2010

Constellation Energy Nuclear Group is reducing spending on its proposed Calvert Cliffs EPR reactor project due to delay and uncertainty surrounding its reciept of a conditional loan guarantee.

Company CEO Mayo Shattuck says that although the company is interested and focused on pursing the project, “time is running out.”

The Calvert Cliffs project was selected as one of the four finalists to receive a share of $18.5 billion in federal loan guarantees in 2009. However, a decision on the funding is taking longer than expected and the company says that the wait has started to affect the project and jobs.

"We definitely can't keep spending without a near-term commitment in the form of a loan guarantee," Shattuck said in a conference call on 28 July.

“If that were to be resolved this summer, we will be working to finalize the project cost estimates and determine whether the plant meets our investment profile and risk criteria.”

A decision on whether to proceed with the project will be made jointly with EDF, CENG’s partner in the Unistar joint venture.

The loan guarantee is just one of the factors that will affect the decision on whether to begin construction.

“Market signals to build base-load plant of any kind has suffered since the project started four years ago,” Shattuck said. Gas price have dropped, there is uncertainty on carbon pricing, yet the construction costs for a new nuclear plant have not fallen at the same pace as fuel and electricity costs.

The other project finalists in line for a loan guarantee are the South Texas Project – two ABWRs, VC Summer – two AP1000s. The Vogtle project - two AP1000s has received $8 billion in loan guarantees and it looks like there is enough in the pot to finance one more project.

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