Blaming uncertainties arising from the nuclear crisis in Japan, NRG Energy says it will write down its $481 million investment in two planned new nuclear reactors in South Texas.
NRG Chief Executive David Crane said Tuesday it was unlikely the two reactors could be completed in a timely fashion.
Support for new nuclear projects in the US has eroded in the aftermath of the nuclear crisis in Japan, according to an Associated Press-GfK poll conducted earlier this month. One of NRG's partners was to be TEPCO, the Japanese utility that owns the reactor complex crippled by last month's earthquake and tsunami.
NRG, based in Princeton, N.J., hoped to build two new reactors at its South Texas Project nuclear station, an operating two-reactor power plant 90 miles southwest of Houston. The project is in line for a federal loan guarantee, but low electricity prices had clouded prospects for the plan even before the incident in Japan.
When prices of natural gas and electricity were high in the middle of the last decade, dozens of proposals for new nuclear reactors were submitted to the Nuclear Regulatory Commission. Now just a handful of projects remain active.
Southern Co. has begun work on a two-reactor project near Augusta, Ga. SCANA is preparing to build two reactors in South Carolina, about 20 miles northwest of Columbia. The Tennessee Valley Authority has resumed construction of a reactor in Eastern Tennessee that was abandoned in 1988 when it was nearly complete.
Crane said Tuesday he still believes the construction of new nuclear reactors in the U.S. is an "absolute necessity." He said NRG will continue to seek an operating license and the loan guarantee in hopes that the project can be revived. Last month NRG announced it would suspend engineering and pre-construction work on the project.
NRG expects to record a pretax charge of $481 million it the first quarter of this year. That includes $331 million contributed by NRG to the joint venture that was to build the project and $150 million from a partner, Toshiba American Nuclear Energy Corp., a unit of the Japanese industrial giant Toshiba.
Toshiba was to supply the design for the reactor and build the station. Toshiba will be responsible for future licensing costs.