Evidentiary hearings for a third nuclear reactor at the Calvert Cliffs Power Plant began Monday with the testimony of two executives from Constellation Energy.
UniStar Nuclear Energy, a subsidiary of Constellation, was represented by Chairman Mike Wallace and President and Chief Executive Officer George Vanderheyden. The two fielded questions from the state’s Public Service Commission, the agency charged with regulating the state energy market.
“This is an opportunity for the public to basically get from the sponsors, under oath and affirmation, the details of the project,” Vanderheyden said.
UniStar is applying for a Certificate of Public Convenience and Necessity from the PSC, a comprehensive license that will allow the company to construct and operate the new nuclear plant.
Wallace opened the proceedings by addressing the financial concerns of what will be a very expensive project. Based on Constellation’s current estimates, the cost of the plant could be between $7.2 billion and $9.6 billion.
“Financial structure is the most critical issue that we face,” Wallace said.
Wallace said that Constellation would cover 20 percent of the overall cost through private lenders and equity investors.
The other 80 percent would be backed by government loan guarantees. The loan guarantees are promises by the government to cover a loan if the company defaults on it.
On July 31, UniStar applied for loan guarantees from the Department of Energy under a 2005 act passed to create cleaner sources of energy. UniStar is also turning to French government agency COFAS to help with the loan guarantees, which could back as much as 25 percent of the project costs.
Constellation’s partnership with French firms AREVA and EDF makes it likely that France will back some of the costs. France is the world’s leader in nuclear power with almost 75 percent of its power coming from nuclear sources.
AREVA, which will be in charge of construction at Calvert Cliffs, is also building a nuclear power plant in Finland. That project faces a two-year delay because of budget overruns and construction problems, Wallace said.
Wallace and Vanderheyden both said that they did not anticipate any such delays in the Calvert Cliffs projects because they were learning from mistakes made in Finland.
“With any large construction project, whether it be nuclear or an office building, techniques are improving,” Vanderheyden said. “What is important is that we learn from all of these delays.”
He also added that UniStar has a full-time employee in France whose sole responsibility is to “gather the lessons learned.”
