CEG seeks Md. permit to build 3rd reactor

The Baltimore Sun

Baltimore-based Constellation Energy Group's nuclear development arm said yesterday that it has asked state regulators for a permit to build a third reactor at Calvert Cliffs in Lusby, though the company maintains it has not yet decided to go ahead with the project.

UniStar Nuclear Energy, a joint venture between Constellation and Electricite de France SA, applied to the Maryland Public Service Commission for what's called a certificate of public convenience and necessity. The PSC will coordinate a multiagency review of the project's potential impact on the environment and state infrastructure, among other things.

Constellation wants to build a 1,600-megawatt reactor based on a French design that could cost more than $4 billion to construct. One megawatt is roughly enough to power 1,000 average homes. The company contends nuclear energy, which does not emit polluting greenhouse gases, is essential to the state's effort to meet growing energy needs without increasing carbon emissions.

Getting state approval is just one step in a larger regulatory review that will take place primarily at the federal level with the Nuclear Regulatory Commission.

UniStar in July became the first in 30 years to file a partial application with the NRC to build a nuclear plant.

The joint venture is vying to lead a revival of the nuclear industry, which has been dormant since the 1978 Three Mile Island accident curtailed interest in nuclear energy. Environmentalists contend little has changed in the years since to assuage their concerns about nuclear waste, cost and safety.

Michael J. Wallace, executive vice president of Constellation, said UniStar expects to submit a full application to the NRC by late December or early January. It has asked state officials to sign off by Dec. 2008. The project is slated to be the first of a handful of plants UniStar plans to build for Constellation and other utility buyers nationwide.

"We need this certainly to build the plant," Wallace said of the state review. "It's one more precondition to the company eventually making a decision as to whether to build."

Though simpler and less time consuming, the state permit process could prove just as critical to the project's future. Company officials will use it to gauge political and regulatory support for new nuclear plants in Maryland.

The move comes at a time when Constellation is under scrutiny by state officials who are examining whether its utility subsidiary, Baltimore Gas and Electric Co., should be separated from the company as part of regulatory reform efforts.

Some environmentalists and the Maryland Public Interest Research Group have come out in opposition to a third reactor, saying it will burden ratepayers with high-cost energy and pose a safety threat. But the project has won support from the Calvert County Board of Commissioners, which has also offered a package of tax incentives.

Broader financial considerations remain a potential obstacle at the federal level. The company has said it will need a well-funded package of federal loan guarantees and tax incentives in order to win financing from lenders. The Energy Department signed off on the loan program in October, but Congress must provide the funding.


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