DALLAS — San Antonio’s CPS Energy will remain a formal partner in expansion plans for the South Texas Project nuclear plant, even though major investor NRG Energy has backed out and the project is at a standstill.

Despite the city-owned utility’s previous attempts to quit the project, it will retain a 7.6% stake in the coalition known as Nuclear Innovation North America. NINA was created to add two reactors to the existing two at the STP plant in Bay City, 90 miles south of Houston.

The plant was considered a leading contender for licensing under a new regulatory regime designed to foster rapid development of nuclear power. However, last month’s nuclear disaster in Japan changed the outlook.

The prospect of new regulations for U.S. plants and added costs has left new nuclear projects by merchant operators in limbo, said Standard & Poor’s analyst Swami Venkataraman.

“The unknown costs associated with the regulations creates a whole new level of uncertainty for nuclear,” Venkataraman said.

Nuclear power plant designer Toshiba and one of NINA’s investors, Tokyo Electric Power Co., were both deeply affected by the post-tsunami breakdown of the Fukushima Daichi power plant in northern Japan.

Investor-owned NRG is taking a $481 million writedown for its stake in the Texas plant, but the STP expansion is still technically in process. CPS Energy said it will continue its part in pursuing a license for the two new units.

“The project is not dead,” NRG chief executive David Crane said in a call to analysts Tuesday. “But it’s not moving forward at this point, and to be frank, under the current circumstances, the reality of it moving forward in the foreseeable future is not high.”

NRG suspended engineering work and other pre-construction activities on the STP Reactors 3 and 4 after flooding crippled four reactors at the Fukushima Daichi plant operated by Tokyo Electric on March 11.

NRG’s decision reduced the workforce on the STP reactors to about 350 from 1,000. Now, NINA partners say the will keep only three employees.

After a court battle with NRG last year, CPS halted further investment in the STP 3 and 4 reactors after sinking $386 million into the project. CPS would recoup $80 million if the project obtains a federal loan guarantee.

CPS owns 40% of the existing nuclear plant that began operating in 1988, and city-owned Austin Energy owns 16%. The cost of the first two reactors, fraught with construction delays, was nearly $5 billion.

After NRG’s decision to slow development of the new STP units last month, CPS indefinitely suspended all discussions with NRG regarding a purchase power agreement for nuclear power. “As we have indicated for months now, we are currently pursuing an array of other clean affordable supply options,” said Doyle Beneby, CPS’ president and chief executive. “When the development of STP 3 and 4 moves forward again, our present ownership interest will remain unchanged.”

NRG filed its full application with the Nuclear Regulatory Commission on Sept. 24, 2007, to build two Toshiba advanced boiling water reactors at the STP plant. It was the first full application filed since 1979. The estimated cost was up to $13 billion.

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