Citing low gas prices and other market factors, Exelon (NYSE: EXC), the nation’s largest nuclear power generator, has officially withdrawn an early site permit (ESP) application it had filed with the Nuclear Regulatory Commission (NRC) for a potential new nuclear project in Victoria County, Texas.
Exelon said in an Aug. 28 statement that it has notified NRC that it will withdraw its early site application for an 11,500-acre tract of land southeast of Victoria.
The company pointed to low natural gas prices and economic and market conditions that have made construction of new merchant nuclear power plants in competitive markets uneconomical now and for the foreseeable future.
While subsidiaries of Southern (NYSE: SO) and SCANA (NYSE: SCG) have won NRC licenses and started construction on new plants in Georgia and South Carolina, both those projects involve regulated utilities in states with favorable rate recovery for nuclear power.
Another non-utility generator in Texas, NRG Energy (NYSE: NRG), had filed a license application a few years ago to build new nuclear generation at its South Texas Project. Momentum ground to a halt, however, after the March 2011 Fukushima disaster in Japan. Tokyo Electric Power was actually going to be a minority partner in the South Texas effort.
The ESP that Exelon had filed was not an actual construction and operating license application but would have deemed the Victoria site suitable for a potential reactor at some later date.
“While we have decided to withdraw our application for this particular project, Exelon’s presence in Texas is growing and will continue to grow,” said Exelon Generation COO Charles Pardee. Pardee went on to say that Exelon likes doing business in the Texas competitive market.
“This is all about the economics of the project, which are driven by commodity and financial markets,” said Marilyn Kray, vice president of Nuclear Project Development for Exelon Generation. Kray praised the public support that Exelon had received in Victoria.
Exelon originally submitted an application for a combined construction and operating license for the Victoria County site in 2008, but never made a decision to build a nuclear plant there. In 2010 the company applied for an Early Site Permit, a change in licensing strategy that allowed Exelon to continue with some aspects of site evaluation and regulatory approvals while deferring a construction decision for up to 20 years.
“Today’s withdrawal brings an end to all project activity,” Exelon said.
Exelon has already received an early site permit from NRC for potential development of another reactor at its Clinton nuclear plant in central Illinois. Subsidiaries of Entergy (NYSE: ETR) and Dominion (NYSE: D) have received ESPs for Grand Gulf and North Anna respectively.
A Southern subsidiary had received an ESP for Vogtle prior to the company getting its new plant license for the two new Vogtle units under construction in Georgia, according to an NRC website.