The world’s largest operator of nuclear power plants still has prospects to develop nuclear power in the U.S., according to The Wall Street Journal.
French state-controlled utility Electricite de France SA’s (EDF) Chairman and Chief Executive Henri Proglio told reporters in Paris that he was satisfied a deal had been reached with U.S. utility Constellation Energy Group (NYSE: CEG). EDF also said it has agreed to withdraw its opposition to the merger between U.S. utilities Exelon Corp. (NYSE: EXC) and Constellation Energy. Both have agreed to maintain operational independence of Constellation's nuclear power unit in which EDF owns a 49.9 percent stake. While EDF is attempting to make progress on a new reactor, Proglio told reporters the deployment of new reactors could be delayed “a matter of years.”
In Nov. 2011, shareholders of Exelon Corp. and Constellation Energy approved the merger of the companies. Under the merger agreement, Constellation’s shareholders will receive 0.930 shares of Exelon common stock in exchange for each share of Constellation common stock. When the merger is completed, Exelon shareholders will own approximately 78 percent of the combined company and Constellation shareholders approximately 22 percent on a fully diluted basis.
In early October 2010, Constellation Energy pulled out of negotiations for a $7.5 billion federal loan guarantee to build a reactor in Maryland at the Calvert Cliffs plant with EDF.
Constellation Energy, at the time, said it did not see a “timely path” to reach a “workable set of terms and conditions” to build a third unit at Calvert Cliffs in an “economically reasonable and statutorily justifiable manner.” The statement also said that the high estimate of the credit subsidy would force Constellation and its partners to pay the U.S. Treasury 11.6 percent, or $880 million, to obtain the loan guarantee.
Before Constellation pulled out of negotiations, The Washington Post reported Constellation Energy was in disagreement with EDF, their equal partner in UniStar, over a business deal that stemmed from a “put” option that would force EDF to buy several of Constellation’s gas, coal and hydro plants for $2 billion. The joint venture wanted to build a fleet of new reactors in the U.S. and planned to start the build out with Calvert Cliff’s third unit.
Constellation Energy chairman and COO Michael Wallace sent a letter to EDF on Oct. 15 inviting EDF to acquire Constellation Energy’s 50 percent share in UniStar, including the land for Calvert Cliffs 3, for $1.
The statement also said that Constellation sought to receive reimbursement of $117 million related to Constellation’s share of the generic development and design costs to prepare the Areva EPR for deployment in the U.S.
On Oct. 27, 2010, EDF agreed to buy the half of the UniStar venture it didn’t own from Constellation for $249 million in cash and stock. Constellation was to recieve $140 million in cash and 3.5 million of its own shares in exchange for its stake in UniStar Nuclear Energy, the owner of sites for at least four new reactors at existing plants. Constellation agreed to forgo its right to sell $2 billion worth of plants to EDF.
Under U.S. law, EDF still needs a U.S. partner as a foreign company can’t “own, control or dominate” the holder of a nuclear power plant license.
Subscribe to Nuclear Power International magazine