South Texas nuclear expansion project slowed following events in Japan

Source: Nuclear Innovation North America LLC

Nuclear Innovation North America LLC (NINA), the nuclear development company jointly owned by NRG Energy, Inc. (NYSE:NRG) and Toshiba Corporation (TOKYO:6502), is reducing the scope of development at the South Texas Project (STP 3&4) expansion to allow time for the U.S. Nuclear Regulatory Commission (NRC) and other nuclear stakeholders to assess the lessons that can be learned from the events in Japan. Continuing work on STP 3&4, for the time being, will be limited to work related to licensing and securing the federal loan guarantee upon which the project depends.

“Our hearts go out to the Fukushima plant operators who have acted heroically to control the crisis in Japan, and NRG and our partners stand squarely behind new nuclear power as the most important component in our transition to a low-carbon economy,” said David Crane, Chairman of the Board of NINA and President and CEO of NRG Energy. “However, our best course of action in this immediate period of uncertainty is to minimize project spend, continue with those activities we can control and wait until there is more information upon which we can base our long-term decisions. This is the financially disciplined course of action in uncertain and challenging times.”

The decision to reduce the scope of permitting and development activities was made jointly by NRG, Toshiba and NINA.

“Since STP is very differently situated from the stricken nuclear plant in Japan – ten miles from the Gulf of Mexico, in a non-seismic area with hardened watertight protection around both its backup generation and its spent fuel storage facilities – it is not obvious to us that any modifications are necessary to regulatory requirements applicable to either our existing or planned nuclear facilities. However, as we unreservedly support our government’s proposed nuclear safety review, the prudent thing for us to do is to await the outcome of that review before committing more of our own or our partners’ capital,” Crane added.

NRG remains committed to the timeframe previously established for making key decisions on the Company’s continuing involvement with the development of STP 3&4. While new guidance on regulatory requirements for permitting new nuclear generation is expected, NRG and our partners continue to believe the Advanced Boiling Water Reactor (ABWR) meets the most rigorous safety standards.

The ABWR units operational in Japan were not damaged by the massive Japanese earthquake and continued operating. Nuclear units closer to the epicenter of the earthquake than Fukushima, and located on the ocean, but using more modern designs and safety equipment, similar to the systems used in ABWR units, shut down safely following the earthquake and tsunami.

“We are confident that the proven Advanced Boiling Water Reactor (ABWR) being licensed for the STP expansion is the safest nuclear technology in operation today,” said Steve Winn, President of NINA.

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