Development of two new nuclear units in Texas could be delayed or put further at risk after estimates for the reactors rose 30% last month to $17 billion. The price escalation shocked San Antonio, Texas, municipal utility CPS Energy, which has a 40% stake in the South Texas Project in Matagorda County. The company’s board of trustees ordered an investigation into whether information about the price escalation for the 1,358- MW advanced boiling water reactor units was kept hidden.

“A cost estimate that exceeds our preliminary total project cost of $13 billion is not acceptable and will result in CPS Energy exploring other options,” says Steve Bartley, interim general manager.

Officials of CPS and NRG Energy Inc., Princeton, N.J., which also owns a 40% stake, have gone to Tokyo to discuss the estimates with Toshiba Corp., the project’s engineering, procurement and construction contractor.

The South Texas Project is one of four new nuclear plants to receive a federal loan guarantee, and the Dept. of Energy likely would have to approve any major changes, says Leslie Kass, director of business policy and programs for the Nuclear Energy Institute, Washington D.C.

David Knox, NRG spokesman, says Toshiba’s estimate was just a starting point and the $17 billion has already been lowered. “If we thought the cost estimate is what it was going to be, we wouldn’t be pursuing it,” he says.

Knox would not detail what cost-cutting measures might be put in place, but Jim Harding, an energy consultant who helped prepare a joint fact-finding report on nuclear power for The Keystone Center, Keystone, Colo., says price estimates for new units are heavily dependent on how much risk a vendor takes. “You can get a relatively cheap bid from a vendor if you are willing to handle the escalation and schedule risks,” he says.

“Constructive contract negotiations” can mitigate costs and risk, Kass says. Even with higher costs, nuclear power is expected, on a levelized basis, to be competitive or cheaper than most other forms of electricity when the first plants come online in 2016-17, she says.