Mitsubishi Heavy Industries Ltd., Luminant Agree to Joint Venture

Later today, Luminant will file a combined license (COL) application with the Nuclear Regulatory Commission (NRC). The application is expected to request approval for an expansion of Luminant's existing Comanche Peak Nuclear Power Plant, using MHI's 1,700-megawatt, US-Advanced Pressurized Water Reactor (US-APWR) design.

If the parties close on the joint venture, Luminant will retain an 88 percent ownership share and MHI a 12 percent stake. The joint venture is expected to continue development of the COL and fund project development costs during the period preceding issuance of the combined license. The joint venture's closing is currently anticipated to occur prior to year end.

"The US-APWR is the right technology, MHI is the right partner and this joint development is the right commercial focus for our team," said Mike Blevins, Luminant executive vice president and chief nuclear officer. "This is an important step forward into expanding the use of safe, dependable, clean nuclear power here in Texas."

"This joint venture will enhance the relationship between both companies, but more importantly, the construction and operation of the US-APWR at Comanche Peak will help ease the growing demand for electricity in the State of Texas," said Hiroshi Inoue, executive officer and senior vice president of MHI's nuclear energy systems headquarters.

Luminant selected MHI's US-APWR as its technology of choice in March 2007, following an extensive evaluation of prospective nuclear generating technologies. Each new reactor unit is capable of producing 1,700 megawatts, or enough nuclear energy to power almost 875,000 average Texas homes.

MHI established Mitsubishi Nuclear Energy Systems as a wholly owned subsidiary in Washington, D.C., in July 2006, to introduce the US-APWR to the U.S. market. MHI submitted an application to have the US-APWR design certified by the NRC in December 2007; that application is currently under NRC review. Mitsubishi Corporation, an MHI partner, is also supporting this project.

The US-APWR has a larger core, new automatic safety systems and other advanced design elements. MHI built the existing 23 pressurized-water reactors operating in Japan and has a 24th under construction. MHI also provides a wide range of maintenance services to the plants once they are in operation.

Luminant and MHI will seek official support for financing from the U.S. and Japanese governments. Luminant has submitted a loan guarantee application form to the U.S. Department of Energy and is finalizing Phase I application information for submittal in accordance with the established guidelines.