Review suspended for Callaway new build

29 June 2009

US utility AmerenUE has asked the Nuclear Regulatory Commission (NRC) to suspend its review of the combined construction and operating licence application (COLA) for a new plant at the Callaway site in Missouri, a project it put on pause earlier this year.


Callaway (Image: NRC)
AmerenUE submitted an application to the NRC for a combined construction and operating licence (COL) for a new Areva-designed US EPR alongside its existing single unit at Callaway in July 2008 and as long ago as 2007 had contracted with Areva Inc for heavy forgings.


However, in April the company announced that it was suspending its efforts to build a new nuclear power plant at Callaway in Missouri, saying that state policies were making it too difficult to finance the project. At that time, AmerenUE asked the NRC to continue the current activities associated with its review of the application while the company reviewed its options associated with the licence application for the new Callaway plant. It said, "Precipitous steps to place the review of the current application on hold could impact certain of our options which are under consideration."


In a 23 June letter to the NRC, the company said, "At this time, we have determined that it is in AmerenUE's best interests to suspend the review of the Callaway plant Unit 2 COL application and request that the NRC staff suspend all activities relating to the COLA."


In April, Ameren said it had asked legislative sponsors to withdraw a new act currently before the state government, the Missouri Clean Air and Renewable Energy Construction Bill, saying that changes to the bill mean it would no longer achieve the original intention of allowing regulators to authorize funding mechanisms for construction of clean energy plants in the state including nuclear.


At that time, AmerenUE president and CEO Thomas Voss said, "As we were moving forward to preserve the option for nuclear energy for our state, we stressed that we needed financial and regulatory certainty before we could begin construction. However, the current version of the bill being debated in the Senate strips the legislation of the very provisions we needed most to move forward. As a result, AmerenUE is suspending its efforts to build a nuclear power plant in Missouri."


A key element of the originally proposed legislation, construction work in progress (CWIP), would allow utilities to recover financing costs from customers while in the process of building a new plant. CWIP funding plans are used in various US but Missouri law prevents investor-owned utilities in the state from recovering any plant development costs until an energy plant is operating.


The lack of CWIP makes financing a new plant in the current economic environment impossible, according to AmerenUE. "A large plant would be difficult to finance under the best of conditions, but in today's credit constrained markets, without supportive state energy policies, we believe getting financial backing for these projects is impossible," Voss had said. "Pursuing the legislation in its current form will not give us the financial and regulatory certainty we need to complete this project."