Areva plant expansion on hold

Comment: No gov't loans to Nuke People!!!!

By Bryan Gentry
Published: May 16, 2009

Nearly one year after Areva NP officially announced it would bring 500 new jobs to Lynchburg and spend $25 million to expand its local headquarters, the company is waiting for a clear signal that the hoped-for construction of new nuclear reactors will come.

Of the four proposed reactor projects that would use Areva’s design, one has been dropped at least temporarily, while another is in line to receive a crucial loan guarantee from the U.S. government this year.

Areva has continued hiring engineers in Lynchburg — about 200 in the last year — to work on the detailed designs for its Evolutionary Power Reactor (EPR). But in November, the company halted its $25 million facility expansion due to uncertainty about how the economy could affect electricity companies.

Areva spokeswoman Denise Woernle said recently that the company continues to watch economic indicators closely to decide when to proceed.

“Our expansion at Old Forest Road is still on hold,” Woernle said in an e-mail. “ … We believe this is the prudent action to take based on the current situation, and we will monitor the economic conditions and projections made by our customers throughout 2009.”

The purpose of the expansion is to support the deployment of Areva’s U.S. EPR. The Nuclear Regulatory Commission is reviewing the reactor design and four applications to build EPRs. (this is the same design of the Finland's Nuke Plant, which is not working!!)

The city of Lynchburg has some stake in the success of Areva’s expansion. It is counting on the new jobs and increased tax revenue, and the city is spending about $500,000 to improve nearby Kings Drive and make other improvements to support the expansion.

The infrastructure improvements around Areva’s office were part of $1 million of incentives the city offered to help with the expansion. The state government also offered grants worth $2.5 million.

Marjette Glass, the city’s director of economic development, said Areva must meet benchmarks for hiring and capital investment before receiving cash payments from the incentive grants. (WHY WOULD A CITY PAY A FOREIGN COMPANY WHO TAKES THE MONEY BACK TO THEIR COUNRY, WHAT IS WRONG WITH THIS!!!!!????)

If the physical expansion were canceled, only the incentive money used on infrastructure would have been spent.

“That’s the kind of incentive that the citizens of Lynchburg get to keep,” Glass said.

Woernle said Areva could finish its new building on Old Forest Road in about nine months after deciding to proceed.

Meanwhile, the company has continued hiring additional employees in Lynchburg.

“Areva has about 2,100 employees in the Lynchburg area compared to just over 1,900 this time last year,” Woernle said. “Our goal continues to be to hire about 200 new employees each year across all of our U.S. locations. … The majority of those are expected to be in Lynchburg.”

Areva has leased office space on Nationwide Drive, where about 100 employees can work.

Woernle did not say what economic signs would prompt Areva to finish its physical expansion, but “an order for a new nuclear power plant would certainly make the expansion more likely.”

Three companies have submitted to the NRC a total of four applications to build EPRs. However, the companies are holding off on actually committing to build a reactor.

One of those projects, at a Constellation Energy plant in Maryland, is moving forward steadily. A Maryland state official has recommended that the new reactor be approved. Also, the project is one of only a few that are on the Department of Energy’s short list for a loan guarantee, according to Maureen Brown, spokeswoman for Constellation Energy.

Constellation is part owner of UniStar Nuclear Energy, a company set up to help deploy the U.S. EPR.

A loan guarantee would make it less risky for a bank to finance a nuclear reactor project because tax dollars would repay the bank if the project defaults. Brown said the guarantee provides for a lower interest rate, which reduces the cost of financing. It is vital to the Maryland project, she said.

Preliminary site work for the reactor could begin later this year if a loan guarantee is obtained, she said.

Other proposed Areva reactor projects did not make it to the final round of loan guarantees.

“We continue to believe that nuclear energy is important to the country’s future, and we hope that Congress will allocate additional funds” for loan guarantees, said Joe Scopelliti, spokesman for PPL, which has tentative plans to build an EPR in Pennsylvania. (NO LOANS FOR NUKE PEOPLE)

AmerenUE, a company that had plans to build an EPR in Missouri, recently canceled those plans. A state law forbids the company from raising its electrical rates before finishing a new reactor. The company did not succeed in getting a law passed to change that.

Woernle pointed out that the decision reflects the financial and legal environment in Missouri, not the quality or potential of Areva’s work.

“This decision is not related to the EPR technology,” she said. “Areva continues to work closely with AmerenUE and UniStar representatives and is focused on investments to support the development and construction of EPR plants in the U.S. and elsewhere.”

http://www.newsadvance.com/lna/news/local/article/areva_plant_expansion_on_hold/16007/