EDF Writing ‘Last Chapter’ on Nuclear in U.S., Piquemal Says
Electricite de France SA (EDF) reached a deal with Exelon Corp. (EXC) for a possible exit from atomic operations in the U.S. after six years of declining fortunes that cost the biggest operator of nuclear plants 2 billion euros ($2.7 billion).
“This will be the third and what I hope is the last chapter of our U.S. adventure with Constellation,” Chief Financial Officer Thomas Piquemal said today in Paris. U.S. nuclear writedowns totaled 2 billion euros from 2009 to 2012, he said.
EDF bought half of Constellation Energy Group’s nuclear business for $4.5 billion in 2009 when the French utility was headed by Pierre Gadonneix. The state-owned former French monopoly was seeking to develop a new reactor at Calvert Cliffs in Maryland. The attraction of building atomic reactors in the U.S. has since faded amid a boom in shale output that lowered the price of natural gas.
Under today’s agreement, EDF will have a put option that would allow the sale at “fair value” of its 49.99 percent share of Constellation Energy Nuclear Group from January 2016 to June 2022, according to a statement. EDF will delegate the operational management of Constellation’s five nuclear plants to Exelon and get a $400 million exceptional dividend from Constellation.
“Right now we are not a seller,” Piquemal said today when asked about the current value of the Constellation stake. Declining to give an estimate, he said the value would increase through savings and operating improvements.
“Exelon will take on the risks of a nuclear operator which works because being French that’s something we don’t have the right to do,” he said. The deal “gives us an exit if we decide that is what we want from 2016 in a price environment that I hope will be more favorable than today.”
EDF’s purchase of Constellation followed a deal in 2008 to buy British Energy Group for 12.5 billion pounds ($19 billion) to gain control of nuclear plants in the U.K. and sites on which to develop new reactors.
The French utility expects to be able to make a decision on pushing ahead with development of the U.K. EPRs by the end of the year, Proglio said today.
Constellation operates three nuclear plants in Maryland and New York. EDF signed a deal for a joint venture with Constellation Energy in 2007 that was for new reactors in the U.S. and Canada. EDF is now developing reactors in Normandy in France and in China.
EDF wants to develop renewable energy and coal export businesses in the U.S. as well as research and development, Piquemal said today.
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