Areva delays $25M expansion

By Ray Reed

Published: November 18, 2008

Citing “the current economic climate,” nuclear company Areva said Tuesday it would delay the start of construction on a new office building on Old Forest Road in Lynchburg.

Areva plans to continue hiring engineers and other employees to complete detailed plans for its evolutionary power reactor, which is being reviewed by the Nuclear Regulatory Commission, company spokeswoman Denise Woernle said.

Kimball Payne, Lynchburg city manager, said he didn’t regard the announcement as bad news.

“There is some delayed gratification, possibly,” Payne said, but “the company is continuing to hire, which is a good thing.”

Woernle said Areva has hired about 350 people this year throughout its locations in the United States, and more than half of those were hired in Lynchburg. It anticipates adding 200 to 250 more employees in 2009, she said.

Still, the announcement was a change from the plans for the $25 million expansion that Areva disclosed last December.

“The current economic climate is creating a great deal of uncertainty in all major markets, including energy,” Woernle said in a news release.

“While the direct impact to the nuclear energy market is not clear, decisions that seemed definite last quarter have become more ambiguous,” Woernle said.

She said she wasn’t aware of any major cutbacks elsewhere in Areva’s worldwide operations.

“We will monitor the economic conditions and projections made by our customers throughout 2009,” Woernle said, and Areva hopes to be in position “to restart quickly based on the shifting economic situation.” The project on Old Forest Road could be complete in nine months from a restart, she said.

The rest of the U.S. nuclear energy industry wasn’t noticing the effects Tuesday from the economy.

Roger Hannah, spokesman for the NRC in Atlanta, said all of the 17 companies that have applied for licenses to build new plants are moving ahead with their plans.

“The NRC hasn’t seen any difference,” Hannah said. “These are long-term projects. A year or two of change in the economy may not have any dramatic long-term effect,” he said.

Financing for the multi-billion-dollar reactors is not a primary focus of the NRC’s mission. “That’s something we look at only in general terms,” Hannah said, to make sure a company can operate its reactor and decommission it if necessary.

Maureen Brown, a spokeswoman for an electric utility company that hopes to build the first two of the EPR reactors Areva is designing, said the plans are going forward. UniStar Nuclear Energy has asked the NRC to approve plans for reactors in Maryland and New York state.

The nuclear industry’s trade group, Nuclear Energy Institute, also said its members were moving ahead with their licensing proposals. “Nobody has asked the NRC to wait,” said Mitch Singer, an NEI spokesman.

But on Old Forest Road, “office space is still a challenge for us,” Woernle said.

Areva plans to reconfigure its existing office space to make room for additional employees, and “we also are leasing space on Nationwide Drive to accommodate about 100 people,” Woernle said.

A new parking lot, now under construction, will be completed, she said.

Payne said the city probably would go ahead with plans to widen Kings Drive at its intersection with Old Forest Road. The parking lot will open onto Kings Drive.

Those improvements will be needed as part of other street upgrades for a Wal-Mart to be built, starting next spring, on Old Forest Road at Forest Brook Drive, Payne said.

Economic incentives totaling about $2.5 million from state and local governments will remain in place for the project, Woernle said.

The incentives “are based on a multi-year projection for hiring and investment,” Woernle said.

- Staff writer Alicia Petska contributed.