Contract Development Begins for Proposed Comanche Peak Expansion
Parties Begin Negotiation of Engineering & Procurement Contract

The companies signed a memorandum of understanding (MOU) on July 1 detailing their plans to finalize an overall engineering and procurement agreement for the project and have begun discussions related to the details of those agreements. While the negotiations are not expected to result in an immediate capital commitment, they are expected to significantly advance project development. In addition, the parties agreed to continue active discussions with the U.S. and Japanese financial institutions including NEXI (Nippon Export and Investment Insurance), who will be involved in providing financing for the project.

Also joining in the MOU are Luminant Generation Company LLC (Luminant), and Mitsubishi Nuclear Energy Systems, Inc. (MNES), the U.S.-based subsidiary of MHI.  CP Nuclear Power is a joint venture of Luminant and MHI that will own and oversee development and construction of the proposed new units.

The proposed expansion of the Comanche Peak plant would use the US-APWR (Advanced Pressurized Water Reactor), MHI's advanced reactor design for the U.S. market.  Luminant selected the 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 submitted a design certification application for the US-APWR to the U.S. Nuclear Regulatory Commission (NRC) in December 2007. That application is currently under NRC review. Luminant submitted an application to the NRC in September 2008 for the Combined Operating License (COL) to build and operate Comanche Peak Units 3 & 4, and the agency accepted the application for review in December 2008. Based on its schedule, the NRC is expected to complete the review process by December 2011.

Since 1970, MHI has played a major role in building 23 PWR-based reactors now operating in Japan, with a 24th currently undergoing final testing prior to full operation. MHI also provides a wide range of maintenance services to the plants once they are in operation.

MHI established MNES in Washington, D.C. in July 2006 to introduce the US-APWR to the U.S. market. Since then, MNES has opened additional offices in Dallas, Texas; Arlington, Virginia; and Pittsburgh, Pennsylvania. MNES intends to increase its staffing to more than 200 employees in the coming year.

Going forward MHI will continue to fully engage in the planning process for potential construction of Comanche Peak Units 3 & 4, working closely with Luminant.