HOUSTON, Oct 15 (Reuters) - Constellation Energy Group Inc offered to transfer its half-interest in a nuclear joint venture to France's Electricite de France SA (EDF) on Friday at a bargain price, but said a dispute over an unrelated put option should be addressed separately.
For a timeline on the Constellation/EDF nuclear venture see
The U.S. utility was willing to transfer its stake in the UniStar joint venture to EDF for $1, plus $117 million in reimbursement costs, in an effort to keep alive a plan to build a third nuclear power reactor at the Calvert Cliffs plant in Maryland, Constellation Vice Chairman Michael Wallace said in a letter.
However, Wallace said a disagreement over an existing option, under which EDF would buy up to $2 billion of Constellation's nonnuclear assets, should be handled separately.
Constellation requested EDF make a decision on the proposal 'as soon as possible.'
An EDF spokeswoman said the company was studying Constellation's proposal.
Earlier this week, EDF, the world's biggest nuclear power operator, offered to continue development of the new reactor to be built by French nuclear engineering firm Areva SA after Constellation pulled out of negotiations for a key federal loan guarantee, but only if Constellation agreed not to exercise the put option for the nonnuclear assets.
The problem with the put option, according to energy analysts, was that the nonnuclear assets were now estimated to be worth significantly less than what EDF agreed to pay for them. The option expires Dec. 31.
Constellation on Oct. 8 told the U.S. Department of Energy in a letter the company could not continue with loan guarantee discussions for the new reactor because the government's proposed costs for the guarantee were unreasonably burdensome.
'Unfortunately, market forces have worked against us. The combination of the lack of a comprehensive energy policy which prices carbon, the issues associated with the loan guarantee, the significant decline in natural gas and power prices and the rising costs of nuclear construction have brought us to this point,' Wallace said in the letter to EDF.
(Reporting by Eileen O'Grady in Houston and Scott DiSavino in New York; Editing by Lisa Shumaker and Alden Bentley) ((eileen.ogrady@thomsonreuters.com; +1 713 210 8522; Reuters Messaging: eileen.ogrady.reuters.com@reuters.net)) Keywords: UTILITIES CONSTELLATION/ (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
For a timeline on the Constellation/EDF nuclear venture see
The U.S. utility was willing to transfer its stake in the UniStar joint venture to EDF for $1, plus $117 million in reimbursement costs, in an effort to keep alive a plan to build a third nuclear power reactor at the Calvert Cliffs plant in Maryland, Constellation Vice Chairman Michael Wallace said in a letter.
However, Wallace said a disagreement over an existing option, under which EDF would buy up to $2 billion of Constellation's nonnuclear assets, should be handled separately.
Constellation requested EDF make a decision on the proposal 'as soon as possible.'
An EDF spokeswoman said the company was studying Constellation's proposal.
Earlier this week, EDF, the world's biggest nuclear power operator, offered to continue development of the new reactor to be built by French nuclear engineering firm Areva SA after Constellation pulled out of negotiations for a key federal loan guarantee, but only if Constellation agreed not to exercise the put option for the nonnuclear assets.
The problem with the put option, according to energy analysts, was that the nonnuclear assets were now estimated to be worth significantly less than what EDF agreed to pay for them. The option expires Dec. 31.
Constellation on Oct. 8 told the U.S. Department of Energy in a letter the company could not continue with loan guarantee discussions for the new reactor because the government's proposed costs for the guarantee were unreasonably burdensome.
'Unfortunately, market forces have worked against us. The combination of the lack of a comprehensive energy policy which prices carbon, the issues associated with the loan guarantee, the significant decline in natural gas and power prices and the rising costs of nuclear construction have brought us to this point,' Wallace said in the letter to EDF.
(Reporting by Eileen O'Grady in Houston and Scott DiSavino in New York; Editing by Lisa Shumaker and Alden Bentley) ((eileen.ogrady@thomsonreuters.com; +1 713 210 8522; Reuters Messaging: eileen.ogrady.reuters.com@reuters.net)) Keywords: UTILITIES CONSTELLATION/ (For help: Click 'Contact Us' in your desk top, click here or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.