Lovell: Nuclear energy? No, it’s a bad deal for Austin

STNPAustin American-Statesman Op-Ed
Trevor Lovell, Public Citizen

The siren song of supposedly cheap, clean, reliable nuclear energy has finally come to Austin in the form of an op-ed from Juan Garza, former Austin Energy general manager and now an NRG executive.

It’s not much of a surprise to hear Garza pleading with Austinites to buy in since the project he’s selling has been on life-support for over a year, and it shouldn’t be of much concern because Austin is too smart and transparent to take such a bad deal.

Let’s start with the basics: NRG’s deal is too expensive and way too risky. A few things worth noting:

NRG has asked for a pre-emptive bailout — it wants the Department of Energy to provide an $8.5 billion loan so that if the project goes south, American taxpayers will be on the hook.

The estimated cost of the reactors tripled from 2006 to 2009. It started at $5.2 billion and just over three years later had risen to $18.2 billion.

NRG ended up in a $32 billion lawsuit with San Antonio over this same project just last year. San Antonio’s City Council was being asked to approve a $200-plus million payment for the project without being told that the estimated cost had risen another $4 billion.

No U.S. civilian nuclear reactor has been built on time and on budget in the past 40 years — ask folks who were here in the 1980s what it was like when our first two nuclear reactors came in eight years late and six times over budget.

Despite all of this, NRG is sending Garza to visit City Council members to sell an advance contract for power from two unbuilt nuclear reactors. All signs point to a minimum price of 8.5-cent per kilowatt-hour (9 to 11 cents is more likely), far above either the 5.1-cent per kilowatt-hour Austin Energy spends to generate its own electricity or the 3- to 4-cent per kilowatt-hour cost for electricity from the ERCOT grid.

Any guesses who will end up covering the difference? That’s right — you!

Last year, the mayor appointed a task force with members representing the public, the environment and local industries to look at our options for electricity. Based on an independent analysis by PACE Consulting, a firm the city hired, the mayor’s task force concluded that buying power from these nuclear reactors was far too expensive.

Instead of nuclear power, the task force recommended keeping bills low using energy efficiency, renewables, and gas while ramping down our share of the Fayette coal plant. The City Council, in turn, took huge amounts of public testimony and voted for such a plan with one caveat: that an “affordability matrix” be added. That plan was finally approved last week.

Now for some background on NRG. I’d like to ask my fellow Austinites to indulge me by checking out the newspapers from San Antonio starting in October 2009 through February 2010.

Around that time, San Antonio officials were being misled by NRG and top executives at the city’s own utility who were trying to force another spin on this project through. It ended in a torrent of exposed corruption and accusation, and heads rolled: The interim general manager of the city utility and the board chairwoman were both forced to resign in disgrace.

They want a pre-emptive bailout. They misled their last municipal partner about this same project and got sued. Their bond rating has slipped to “speculative,” and they’re trying to circumvent an electric generation planning process for which Austin has been loudly praised.

Does NRG sound like a company we want to do business with? It blew its deal with San Antonio, so now it’s come to us with promises of cheap nuclear power and coal capture technology, neither of which exist. The choice is obvious.

The Austin public is highly engaged, and the foolishness of this project will become abundantly apparent, just as it did in San Antonio. People who want to learn more can visit

Lovell is the Nuclear Program Coordinator at Public Citizen’s Texas office.