Areva hopes to win contract for Louisa County reactor

Areva is courting Dominion Energy in hopes of designing and building the first nuclear power reactor in Virginia in 30 years.

If Areva wins the contract for Dominion’s new reactor in Louisa County, the deal could bolster Areva’s ongoing expansion in Lynchburg, which is bringing hundreds of high-paying jobs to the region.

Although Areva and Dominion remain silent on the proposals, local business leaders have spoken out and asked lawmakers to support Areva’s bid.

Some elected officials have told Dominion that Virginia’s economy would strengthen if in-state engineers and manufacturers build the new reactor.

“It’s a major opportunity for the state,” said Rep. Bob Goodlatte, R-6th District, while in Lynchburg in August. “I want to make sure that they fully recognize the potential … to help the state.”

Both Areva and Dominion are major players in the nuclear power business. From facilities in the Lynchburg area Areva makes nuclear fuel and designs new reactors. Dominion

operates seven reactors and was one of the first utilities in recent years to request a permit to build a new one.

Dominion is seeking federal approval for a new reactor at its North Anna Power Station northwest of Richmond. That plant has two reactors now. The newest began operating in 1980.

In its current bid for a new reactor, Dominion chose a GE Hitachi model, but those plans hit a snag in the past year. “We have not been able to negotiate a contract that would be acceptable to them and our customers and shareholders,” said Dominion spokesman Richard Zuercher.

Dominion and GE Hitachi did not agree “on the appropriate amount of financial risk to be taken by the vendor,” he said.

This year Dominion asked for new bids on the project, Zuercher said. He would not disclose the number of proposals Dominion received nor which companies were involved, though they included the “major players in the global reactor community.”

Dominion plans to choose a vendor by the end of the year. It could still opt for GE Hitachi, he said.

Areva spokeswoman Denise Woernle said she couldn’t discuss any specific proposal from the company.

Several leaders in Lynchburg’s business community have asked elected officials to support Areva’s bid to be Dominion’s new vendor.

Areva is the only Virginia company to seek Dominion’s project. It would design the reactor in Lynchburg and build parts for it in Newport News. The primary construction partner is based in Northern Virginia, letters from the business leaders state.

They also say that the project could create 11,000 jobs at the peak of construction and would generate $1 billion in tax revenue.

The deal could boost the economy in the Lynchburg area.

“What’s good for one of our major companies is good for our entire region,” said Rex Hammond, president of the Lynchburg Regional Chamber of Commerce, who submitted letters supporting Areva.

Massie Ware, chairman of Lynchburg’s Economic Development Authority, said that more contracts for Areva would mean an increase in local “quality jobs.”

Areva is proceeding with a 500-employee expansion in Lynchburg. New contracts also could make Areva more likely to move forward with building a new office in the city. It stalled those plans last year because of economic uncertainty.

Rep. Tom Perriello, D-5th District, wrote back to Ware to support Areva’s bid. The letter said he had made his position known to officials at Dominion, state officials and other stakeholders in the process.

Goodlatte said that he also had contacted Dominion to support Areva. Dominion needs to choose a vendor based on its needs, but he wanted the company to understand that choosing Areva would benefit many of Dominion’s own employees and customers by strengthening the state’s economy, he said.

Gordon Hickey, spokesman for Gov. Timothy M. Kaine, said the governor had received a letter from Hammond about the Areva project. However, Kaine was not taking action on the letter because the letter did not ask for action, he said.

“The governor has a lot of confidence in Areva. It is a major employer in the state,” Hickey said. “But ultimately, the decision on who is going to be hired is Dominion’s decision.”

While the state could possibly offer financial incentives if Dominion favored Areva, Hammond said he has mixed feelings on that idea. State incentives are often a “zero sum game” in which value is shifted around but not created.

“However, if the state wants to sweeten the pot, I’m all for it,” he said.