EDF, Constellation reach agreement on Calvert Cliffs 3 nuclear project

By Dorothy Davis 

In a comprehensive agreement reached late Tuesday, Electricite de France SA (EDF) and Constellation Energy Group have settled disputes surrounding the Calvert Cliffs 3 nuclear project through a transfer of assets.

Under the terms of the agreement, EDF will acquire Constellation's 50 percent stake in the Unistar Nuclear Energy, a joint venture formed for the Calvert Cliffs project, for $140 million. EDF will be the sole owner of Unistar, and its plans to develop the third unit at Calvert Cliffs in Southern Maryland.

Furthermore, the agreement requires EDF to transfer 3.5 million of the shares it owns in Constellation valued at nearly $110 million, thereby abdicating its seat on the Constellation board. Constellation has in turn also agreed not to exercise its put option to sell $2 billion in plants to EDF under a previous agreement reached in 2008.

The ownership structure of the companies’ existing Constellation Energy Nuclear Group partnership remains unchanged, with Constellation holding 50.01 percent ownership and EDF maintaining 49.99 percent partner status.

In early October, the Calvert Cliffs 3 project suffered a serious set-back when Constellation withdrew from negotiations for a $7.5 billion loan guarantee from the U.S. federal government to fund the nearly $9.6 billion undertaking.

Although the agreement has revived hopes for the Calvert Cliffs 3 project, EDF is still tasked with finding another U.S. based partner in order to see the development come to fruition. Federal law prohibits full control or ownership of a U.S. nuclear facility by any foreign entity.

To be built in Maryland, the Calvert Cliffs 3 nuclear project proposes a nuclear power plant be build alongside Constellation Energy’s existing Calvert Cliffs Nuclear Plant. The new plant would generate about 1,600 megawatts of electricity to serve the Mid-Atlantic region.

For the most up to date and in-depth information on the Nuclear Generation market visit PennEnergy's comprehensive Research area to access industry focused Reports.

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