by Joe Wilhelm Jr.
Staff Writer
The JEA board of directors Tuesday approved spending an amount not to exceed $7.5 million on an option to buy up to 20 percent of a new nuclear plant.
By purchasing the option, which would be applied to the project’s total cost, the public utility doesn’t have to raise the capital now that would be required if it were to directly invest in a plant.
It has three years to decide if it wants to buy into the project.
“With all the uncertainty of coal and climate change and byproducts from coal, we believe we need to decrease our reliance on solid fuel,” said Jim Dickenson, JEA managing director and CEO.
“We are not going to eliminate it, we don’t intend to eliminate it. Frankly, for our customers, (nuclear energy) is the best long-range stability we can provide.”
Dickenson and his staff are following the direction of the board of directors, which approved a resolution in August to establish a target of up to 30 percent of JEA energy requirements to be met with nuclear energy by 2030.
The move was made after the board attended a nuclear energy workshop in the summer.
“It increases our flexibility and increases our fuel diversity,” said Dickenson.
He said JEA has a power purchase agreement in place with the Municipal Electric Authority of Georgia that would provide about 10 percent of its electricity through nuclear energy by 2017.
The option “would take it up to almost 30 percent if we went with the 20 percent ownership. The option gives us flexibility over the next three years, so we don’t have to make a final decision until three years from now,” he said.
The uncertainty of financial markets has the JEA comfortable with pursuing the option.
“When we get into the conversation on (energy) generation strategy, we have an uncertain economic environment, (and an) uncertain regulatory environment,” said Paul McElroy, JEA chief financial officer.
“The best opportunity for us is to maintain a flexible and diverse mix of generation going forward,” he said.
The opportunity to partner with another organization to acquire a portion of a new nuclear plant presented itself about two years ago and negotiations have been ongoing.
JEA did not reveal the name because of the negotiations.
“We believe it poses the best opportunity for us to hold a position for generation out beyond 2021,” said McElroy.
The JEA is in a good position to be shopping for nuclear energy because the Department of Energy offered conditional commitments earlier this year for a total of $8.33 billion in loan guarantees for the construction and operation of two new nuclear reactors at the Alvin W. Vogtle Electric Generating Plant in Waynesboro, Ga. about 230 miles north of Jacksonville.
The project is scheduled to be the first U.S. nuclear power plant to break ground in nearly three decades, according to the White House Office of the Press Secretary.
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