By Austin Business Journal

NRG Energy Inc., the New Jersey company doubling the South Texas Nuclear Project plant size, wants Austin Energy to open its doors to negotiating a deal for the city to buy its power.

The energy company is looking for customers as it shores up investor relations for the $10 billion nuclear plant addition â¿¿ not including interest or soft costs â¿¿ slated for completion in about six years.

The city, in the past, has turned down NRG overtures to invest in the addition, which would provide 2,700 megawatts of power, enough to light up about 2 million homes.

Entering into negotiations with Austin Energy does not require city council approval, said Juan Garza, NRGâ¿¿s president of advanced technology. However, if energy officials reach a favorable deal, they would seek council approval for a contract, he said.

NRG, which reported about $9 billion in revenue last year, said they are already having ⿿good discussions⿝ with other potential customers, which could include CPS Energy and the Lower Colorado River Authority.

Ward Tisdale, spokesperson for the collaborative of Austinâ¿¿s industrial power users, known as CCARE, said his group has not taken a position on nuclear energy.

Garza, meanwhile, said if Austin Energy buys power for 40 years at a fixed rate, it would act as a hedge against increasing energy costs and customer rates. NRG estimates the cost of nuclear power to Austin to be about 8 cents per kilowatt hour. Natural gas prices hover around 4 cents and Austin Energy efficiency upgrades would cost about 3 cents per kilowatt hour, according to past reports.

For the past decade, natural gas prices have fluctuated from 1 cent per kilowatt hour to 7 cents, according to an Austin Energy analysis.

From 2002 to 2008, Garza was general manager of Austin Energy, moving on to work as the Pedernales Electric Cooperative general manager until he fell out of favor with the board. NRG (NYSE:NRG) hired him last September.

The South Texas Nuclear Project is owned by San Antonioâ¿¿s power company and Nuclear Innovation North America LLC, or NINA, a joint venture between NRG and Toshiba. In recent years, San Antonio reduced its stake in the South Texas plant from 50 percent to about 8 percent, according to reports.

Garza said the The Tokyo Electric Power Co. Inc. could own as much as 20 percent in the future. NRGâ¿¿s goal is to reduce its stake to 40 percent one day, officials said.

Louisiana-based The Shaw Group Inc. (NYSE: SHAW) is providing a $100 million credit facility to help finance the project.

NRG officials said the expansion will ultimately be financed with 20 percent equity, 50 percent by the U.S. government and 30 percent by the Japanese government. NRG is in the "final stages" of its loan review with the U.S. government, and "the Japanese banks have been very supportive, but are waiting on the U.S. guarantee," a company spokesman said.

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