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« "Shockingly high" financial risks doom new reactor proposal in Maryland | Main | So-called "nuclear renaissance" pushed back "a decade, maybe two" as proposed new Maryland reactor bites the dust »
Saturday
Oct162010

Constellation turns down Obama administration offer of $7.5 billion nuclear loan guarantee for proposed new reactor at Calvert Cliffs in Maryland

Constellation Energy/Electricite de France's (EDF) proposed new Calvert Cliffs 3 reactor on the Chesapeake Bay in Maryland was widely regarded as next in line for a taxpayer-backed nuclear loan guarantee. But fissures between Constellation and EDF hinted that the project was being laid on shaky financial foundations; such problems at one of the lead new reactor proposals in the U.S. cast further doubt on the "nuclear renaissance," leading Areva -- designer and supplier of the new reactor for Calvert Cliffs 3 -- to slow down its development of a large nuclear component factory in Virginia, stating it was "adjusting our construction schedule to meet our customers' planning timetables..." and that without "sufficient loan guarantee funding . . . customers are delaying the start of projects." Then, Constellation "disappointed and shocked" its business partner EDF by "unilaterally" rejecting the Obama administration's offer of a $7.5 billion loan guarantee due to the "unworkable" 12% credit subsidy fee -- amounting to $880 million -- required by the Office of Management and Budget due to its "duty to protect the taxpayers' money"; Constellation made clear its withdrawal from the project, casting doubt on not only other proposed Areva "Evolutionary Power Reactors" (EPRs) across the U.S., but the entire "nuclear renaissance" in general. EDF then stated it was "ready to commit further resources" to the proposed new Calvert Cliffs reactor, as well as to "shoulder 100 percent of the risk and burden until construction begins" (a federal loan guarantee would then shift 80% of the financial risks onto U.S. taxpayers), but the now acrimonious relationship between Constellation and EDF could hinder this. Despite this, Constellation has offered to sell its 51% stake in Calvert Cliffs 3 to EDF for $1, clearly showing its desire to abandon the project ASAP.