State Agency Approves New Nuclear Plant At Calvert Cliffs

State regulators have approved the construction of a third nuclear reactor at the Calvert Cliffs Nuclear Power Plant in southern Maryland – even as those regulators prepare to review a business deal that could be crucial to getting the new reactor built at all.

The state’s Public Service Commission approved the 1,600 megawatt reactor following an 18-month review including public meetings (which were largely pro-nuke love-fests). The decision was dated Friday but not made public until late Monday evening.

Constellation hasn’t firmly committed to building the new reactor, which wouldn’t come online until sometime next decade and could cost as much as $9 billion to construct. The federal Nuclear Regulatory Commission still has to approve the project and has said it won’t do so until 2012.

The new reactor and three other similar nuke projects around the country were proposed by UniStar Nuclear Energy, a joint venture between Baltimore uber-company Constellation and French energy giant Electricite de France, or EDF.

But EDF and Constellation are doing more than just hooking up for a few reactors. In December, the French offered to buy just under half of Constellation’s nuclear group – the company’s crown jewel – for $4.5 billion. That offer scrapped an existing company-saving, Godfather-style merger deal with Warren Buffett, made when Constellation hit the financial rocks in mid-September.

However, earlier this month the PSC said it had to sign off on the Constellation/EDF deal, saying the deal would give the French company “substantial influence” over the finances of Baltimore Gas and Electric. The state wants to make sure BGE ratepayers aren’t getting hosed (as, it argues, ratepayers already have been under electricity deregulation).

But the commission’s decision kicked off a new fight between the state and the company, which said the EDF deal would result in the “increased prospect” of the reactor actually being built. During past periods of regulatory turbulence, Constellation has hinted that it may pursue nuclear projects outside of Maryland if the state doesn’t play ball. But state officials insist a review is necessary to ensure the public good.

So to recap: the new reactor’s okay as an idea. But the deal which, among other things, might put shovels in the ground? That’s a massive nuclear fission reaction of a different color.

Here’s the PSC’s order

And here’s Constellation’s corporate statement:

Maryland Public Service Commission Issues Final Approval for Proposed Calvert Cliffs Nuclear Energy Facility

Third reactor in southern Maryland would create thousands of jobs, and provide clean, safe, reliable and emission-free electricity – enough for 1.3 million homes

BALTIMORE, Jun 29, 2009 (BUSINESS WIRE) — The Maryland Public Service Commission (PSC) issued a key approval last Friday for a proposed new nuclear energy facility at Calvert Cliffs in southern Maryland, a project that would provide 1,600 megawatts of new, emissions-free electricity, stimulate the region’s economy and shape a more secure energy future for the state.

The PSC issued the Certificate of Public Convenience and Necessity (CPCN) after completing a comprehensive, 18-month review that included multiple public hearings. The application for the proposed nuclear energy facility was submitted by UniStar Nuclear Energy, a strategic joint venture of Constellation Energy (NYSE: CEG) and EDF Group, the global leader in nuclear power.

“The PSC approval is critical to Maryland’s energy future and we applaud the commission for recognizing the vital environmental, economic and energy benefits of a third nuclear energy facility at Calvert Cliffs and the significant benefits it will create for businesses and residents across the state of Maryland,” said Michael J. Wallace, vice chairman and chief operating officer of Constellation Energy and chairman of UniStar Nuclear Energy. “It’s important to also recognize that completing the proposed EDF nuclear joint venture is essential to Constellation Energy being able to work through the next set of challenges to develop this clean energy opportunity for Maryland. It is unrealistic to think that we will be able to raise the capital required for a project of this magnitude if the perception persists that Maryland’s business, regulatory and political environment is hostile to such transactions. Simply put, Constellation Energy’s potential investment in a new nuclear facility at Calvert Cliffs 3 and the successful close of the Constellation-EDF joint nuclear venture are inseparable.”

The CPCN is required before any construction work can begin. It addresses a range of potential environmental and reliability impacts of the proposed new reactor, including air, water, wetlands, cultural and historic impacts. Overwhelming public support for the proposed nuclear facility was voiced during PSC public hearings held after UniStar submitted the application in November 2007 and the project has gained considerable momentum in recent months. A PSC hearing examiner issued a proposed order on April 28, and the full commission issued a final order today. UniStar also is seeking federal regulatory approval through the U.S. Nuclear Regulatory Commission.

UniStar proposes to build a fleet of U.S. EPR reactors, an advanced technology provided by Areva, at selected sites throughout the United States.

On May 19, the Calvert Cliffs project was selected by the U.S. Department of Energy (DOE) as one of four projects to enter final due diligence and detailed negotiations for a portion of $18.5 billion in federal loan guarantees for advanced nuclear projects. Receipt of a conditional loan guarantee commitment by the end of 2009 would position UniStar to make a final decision to proceed with the project.

On June 1, the Building and Construction Trades Department (BCTD), AFL-CIO, the National Construction Alliance II and all affiliated international unions, and Bechtel Construction Company (Bechtel), announced they had reached a Project Labor Agreement to supply labor for the Calvert Cliffs 3 project.

A 1,600-megawatt reactor is proposed to be built next to Constellation Energy’s existing Calvert Cliffs nuclear energy facility. It would represent one of the largest economic and industrial development projects in Maryland’s history, and would provide enough clean, safe, reliable and emission-free electricity to power 1.3 million Maryland homes. It would play a meaningful role in helping to stimulate the region’s economy and manufacturing sector through the addition of 4,000 construction, engineering and craft jobs and approximately 400 permanent positions. Finally, a new reactor at Calvert Cliffs would help Maryland and the nation meet environmental targets while adding needed round-the-clock capacity to meet growing demand for carbon-free energy.