EdF may increase stake in Constellation
The board of Electricité de France (EdF) has authorised management to increase the company's stake in US utility Constellation Energy from the current 4.97% to 9.9%, and this may be increased later.
The board of Electricité de France (EdF) has authorised management to increase the company's stake in US utility Constellation Energy from the current 4.97% to 9.9%.
French energy giant EdF said that it has acquired its current stake in Constellation "on the open market over the course of the past year." It said that it will "progressively exercise the next level of open market purchases given the opportunity presented by market conditions."
Under federal regulations, a company owning at least 10% of a US electric utility company is subjected to increased reporting requirements and investments limits.
However, EdF may even increase its holding beyond the 9.9% level. The company said that it has previously held discussions, and may continue to discuss with Constellation, about "expanding their current relationship, permitting EdF to increase its ownership interest and modifying the associated rights in compliance with all US regulations." However, EdF noted that "no current plan or proposal exists in that regards."
Constellation describes itself as a major generator of electricity in the US, owning 83 electricity generating plants across the country, with a combined generating capacity of some 9000 megawatts (MWe). More than 60% of its generating output is from nuclear power plants - its nuclear generation division operates five reactors at three sites (Nine Mile Point and R E Ginna in New York; and Calvert Cliffs in Maryland). Constellation, through its Baltimore Gas and Electric (BGE) subsidiary, is also one of the USA's largest wholesale power sellers.
EdF, the leading energy producer in Europe, has a worldwide installed generating capacity of 126.7 gigawatts (GWe). The company, controlled by the French state, operates the largest nuclear generating fleet in the world, with 58 power nuclear reactors in France.
In July 2007, Constellation and EdF agreed to form a 'strategic joint venture' to operate new nuclear power plants in both the USA and Canada. The 50/50 joint venture - called UniStar Nuclear Energy (UNE) - will 'develop, own and operate' a possible standardised fleet of US EPR units envisaged by the UniStar scheme, itself a joint venture between Constellation and France's national nuclear technology company Areva.
At that time, it was agreed that EdF may purchase up to 9.9% of Constellation's outstanding common shares over the next five years - limited to 5% in the first year - and place an observer on its board.
UniStar has lodged an application with the Nuclear Regulatory Commission (NRC) for a combined construction and operation licence (COL) for a proposed new plant at Constellation's Calvert Cliffs site. Unistar Nuclear Operating Services LLC, a subsidiary of UNE, will be the licensee. Calvert Cliffs will be the reference COL for the US-EPR.
In early August, an application for a federal loan guarantee for the proposed new Calvert Cliffs plant was filed by Calvert Cliffs-3 Nuclear Project LLC, a subsidiary of UNE.
