News Release —August 3, 2006
UniStar Companies First to Procure Components for First Potential Nuclear Power Plant in Nearly Three Decades
BALTIMORE, August 3, 2006 –Constellation Energy (NYSE: CEG) and AREVA, today announced that through their jointly developed UniStar business model they have entered into agreements to procure the long lead materials necessary to construct the first potential U.S. nuclear power plant of a planned U.S EPR fleet. Of the several U.S. companies considering the construction of new nuclear plants, Constellation Energy and AREVA, through the UniStar business model, are the first to procure the necessary raw materials.
This procurement includes 44 heavy forgings for a planned U.S. Evolutionary Power Reactor (EPR) to be supplied by AREVA. The forgings - needed for the reactor pressure vessel and steam generators - will be produced at international facilities. The completed forgings will be manufactured into final components at BWX Technologies' (BWXT) facility in Mount Vernon, Ind., or AREVA's facility in Chalon-St. Marcel. Maryland-based AREVA Inc. partnered with Baltimore-based Constellation Energy last fall to develop the UniStar business model to design, license, develop, construct and deploy at least 4 U.S. EPRs in North America.
“This contract tangibly demonstrates the UniStar companies' and UniStar model's strong commitment to building and deploying the next generation of nuclear power plants in America,“ said Michael J. Wallace, co-chief executive officer of UniStar Nuclear, executive vice president of Constellation Energy, and president of Constellation Energy subsidiary, Constellation Generation Group. “The Bush Administration and Congress have made this commitment possible by developing, passing and carrying out the Energy Policy Act of 2005. This important legislation is a real service to the nation, and enables UniStar Nuclear and future partners to play an important role in increasing the nation's supply of reliable electricity in the future.“
In making today's announcement, Constellation Energy has taken yet another step, the funding for which is included in Constellation Energy's current capital plan. It also sets the stage for more substantial financial commitments which could be made in the coming years for the potential construction of a planned fleet of U.S. EPRs.
The Nuclear Energy Institute reports 12 energy companies intend to file license applications for more than 18 new reactors by 2009. Currently, these types of heavy forgings are only available through facilities in France and Japan. Increased activity in the nuclear sector may present challenges in the supply chain's ability to meet growing demand for major components.
Wallace said the decision to act first addresses infrastructure concerns. “By making the early investments and entering into essential agreements necessary to procure long-lead materials for the first potential U.S. EPR, we are building another layer of certainty into the UniStar business model by significantly reducing the possibility of delays due to potential congestion in the global nuclear supply chain.“
Constellation Energy and AREVA, through the UniStar business model, continue to seek opportunities to invest in the redevelopment of U.S. nuclear manufacturing capabilities. UniStar recently announced an agreement between AREVA Inc. and BWXT to provide major components for the planned U.S. EPR fleet through BWXT's state-of-the-art manufacturing facility on the Ohio River in Mount Vernon, Ind.
According to UniStar Nuclear co-chief executive officer and chief executive officer of AREVA, Inc., Tom Christopher, “we are taking advantage of our global strength and taking concrete action toward realizing our vision for a fleet of U.S. EPRs to be made in America by Americans and for Americans.“
Constellation Energy and AREVA, through the UniStar business model, continue to pursue their disciplined, value-driven approach to licensing and building a potential fleet of U.S. EPR advanced nuclear power plants in the United States. The innovative business model, coupled with the only advanced technology currently being built around the globe, increases certainty for investors and operators looking to avoid first-of-a-kind risk.
“The UniStar business model follows a risk-managed approach to new nuclear plants,“ said George Vanderheyden, president of UniStar Nuclear. “Well-timed decisions along the path to new nuclear builds are essential. We continue to work in innovative ways with the Nuclear Regulatory Commission toward mutual success on the licensing path. Acting now on large forgings maintains our strong position to be able to deploy the safest, most secure, most efficient fleet of advanced nuclear power plants in North America.“
UniStar Nuclear (www.unistarnuclear.com) is headquartered in Annapolis, Md. .
Constellation Energy (www.constellation.com), a FORTUNE 200 company with 2006 revenues of $19.3 billion, is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 78 generating units located throughout the United States, totaling approximately 8,700 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.
As the leading U.S. nuclear supplier and a key player in the electricity transmission and distribution sector, AREVA's 5000 American employees are committed to serve the nation and pave the way for the future of the electricity market. The company's commitment to America is reflected in its initial investment of $200 million in the U.S. EPR. With 40 locations across the nation and $1.8 billion in revenues in 2005, AREVA combines homegrown leadership, access to worldwide expertise and a proven track record of performance. In the U.S. and in over 100 countries around the world, AREVA is engaged in the 21st century's greatest challenges making energy available to all, protecting the planet and acting responsibly towards future generations. AREVA Inc. is headquartered in Bethesda, Md. Visit us at www.us.areva.com.
BWXT, headquartered in Lynchburg, Virginia, is the premier manager of high-consequence nuclear and national security operations. The Company is a proven leader in fuel development and fabrication, nuclear component manufacturing, nuclear plant design, nuclear facility operations and advanced nuclear research. BWXT has delivered the most sophisticated nuclear components ever produced and has consistently achieved excellence in the safe and efficient conduct of nuclear operations while meeting rigorous customer requirements. The Company's diverse capabilities also include decontamination and decommissioning, waste management, engineering, and project management services. BWXT has more than 11,000 employees in 11 states