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City Nervous About Nuke Plant Expansion

SAN ANTONIO (CN) - After spending $300 million to expand a nuclear power plant, San Antonio wants to know what will happen if one of the partners pulls out. The Public Service Board of San Antonio sued Nina Texas 3 and 4, (Nuclear Innovation North America), seeking declaratory judgment on plans for two new power units at the Bay City nuclear power plant near Houston.

San Antonio says it has spent $300 million on the project since 2007, but the total cost could be as much as $2 billion. "But, the executed participation agreements are either silent or ambiguous with respect to ownership rights in the project if one co-tenant exercises its contractual right to withdraw from the project," the city says in Bexar County Court.

"CPS Energy has not withdrawn from the project and cannot make a decision to withdraw or proceed until it receives the revised cost estimate on Dec. 31, 2009. Although CPS Energy continues to honor its obligations as an owner in the project, it faces extreme uncertainty and potential harm due to the lack of definition in the agreements as to a withdrawing owner's rights in the project," the complaint states.

CNS seeks declaratory judgment of "the rights, obligations and legal relations of the parties under applicable law and the agreements in the event of a unilateral withdrawal."

It is unclear from the 9-page complaint where CPS is considering cutting its losses, or if it fears the Nina may back out.

The city is represented by C. Michael Moore with Sonnenschein Nath & Rosenthal of Dallas and Ricardo Cedillo with Davis, Cedillo & Mendoza of San Antonio.

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