Japanese Nuke Disaster Might Stop Texas Expansion

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Financial analysts are predicting that the series of nuclear accidents resulting from the Japanese earthquake will put an end to plans to expand the South Texas Nuclear Plant in Bay City, 90 miles southwest of town.

The energy company NRG had ambitious plans to double STNP's size by adding two more reactors. Even though some of the potential municipal investors like San Antonio and Austin have balked, the plans went ahead -- with a Japanese energy company a big part of the project. A big federal loan is also part of the deal.

The proposal passed an important hurdle recently when an environmental study found no big problems with the expansion, but now investors might be wary of proceeding, Reuters reports.

Moody's and Barclay's have both sounded warnings.

"For NRG Energy we think the potential added pressure could be the end of its nuclear loan guarantee award from the Department of Energy for STP (units) 3 and 4 in Texas which could cause a write-off in the short term, but would be likely positive in the long term," Barclays told clients.

The "likely positive" in the long term, the analysts say, is that the $10 billion project is likely to go over budget.

NRG is not commenting on any possible effect on the project.

"Right now, our focus is on the safety of the friends and partners we have in Japan," a spokesman told Reuters. "As far as the impact on the U.S. nuclear industry, there is going to be time for that in the days and weeks to come."

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