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Constellation Energy Employee's $50 Chargeback to the Failure of Nuclear Power Industry?

A $50 chargeback from a Constellation Energy's employee reveals something about the corporate culture of this Baltimore based nuclear power company.  This has led us to investigate the future of the nuclear power industry in the United States.  Will nuclear energy become an alternative energy source to be accepted by the public?  We believe so, but it takes time.

by Samuel Chong
December 8, 2009

Los Angeles, CA.  In June 2009, a Chinese employee from Constellation Energy sent an email from his company's email address to us, requesting to use our Chinese translation services in Baltimore.  We performed our service and was confirmed by Deb Quinones, a good immigration attorney at Morgan, Lewis & Bockius LLP for the Chinese employee at Constellation Energy on June 29, 2009.  For the deeply discounted price of $50 for providing a certified Chinese translation of a birth certificate, we received a charge back from this Constellation Energy Employee.

Why? We were puzzled. Was the employee in debt? Was he poorly paid? Still, we wanted to be paid for the services we performed.  So, we sent an email to Barbara Harbin (at [email protected]), a person in charge of Human Resources Department at Constellation Energy, asking for clarification.  No replies. With weeks without getting paid for the services we successfully performed (according to Deb Quinones, the good immigration attorney), we decided to learn more about Constellation Energy and the industry it is in.

Nuclear power is one of the most efficient sources of clean energy, according to scientists and Nobel Laureates.  However, because of the Three Mile Island Accident of 1979, American public has had a fear for nuclear accidents.  Hence, decades later, the United States has lagged behind France and a few other countries for utilizing nuclear power plants as one of the energy sources in the nation.

Constellation Energy is one of the major energy companies in the East Coast.  Constellation Energy Nuclear Group, LLC is a joint venture of Constellation Energy (NYSE: CEG) and EDF Group of France.

In recent years, because of the relative high prices of oil and the public awareness of utilizing more efficient clean energy, we have seen a resurgence of the use of nuclear power as one of the energy sources.  In September 2009, Luc Oursel, chief executive of Areva Nuclear Plants, the core nuclear reactor manufacturing division of Areva, stated: "We are convinced about the nuclear renaissance"

A nuclear renaissance in the world, except for the United States, that is to say.  The financing of nuclear power plants in the United States has been proved difficult.  As of July 2009, a proposed Victoria County Nuclear Power Plant has been delayed, as the project proved difficult to finance.  As of April 2009, AmerenUE has suspended plans to build its proposed plant in Missouri because the state Legislature would not allow it to charge consumers for some of the project's costs before the plant's completion. The New York Times has reported that without that "financial and regulatory certainty," the company has said it could not proceed.

Previously, MidAmerican Energy Company decided to "end its pursuit of a nuclear power plant in Payette County, Idaho." MidAmerican cited cost as the primary factor in their decision.

In May 2009, John Rowe, chairman of Exelon, which operates 17 nuclear reactors, said he would cancel or delay construction of two new reactors in Texas without federal loan guarantees.

Why so much concerns about the costs? Our $50 Chinese translation fee is certainly not one of the reasons.  Indeed, the costs for building a nuclear power plant have been around in dozens of billions of US dollars.  We cannot give you a precise estimate because recent actual costs of building a nuclear power plant have been about three times as large as the initially estimated costs, as construction delays add significantly to the cost of a plant.

Because a power plant does not yield profits during construction, longer construction times translate directly into higher finance charges. Modern nuclear power plants are planned for construction in four years or less as opposed to over a decade for some previous plants. However, in the United States, unexpected changes in licensing, inspection and certification of nuclear power plants have added delays and increased construction costs. After the Three Mile Island accident's partial meltdown, many new regulations were put in place in the years before and again immediately after, resulting in plant startup delays of many years. Thus, U.S. nuclear power developers are increasingly looking for new partners to share the high costs and risks of building new reactors.

China, under the rule of the Communist Party, has 10 nuclear power reactors currently in operation, 5 reactors under construction, and is planning or proposing an additional 25.  It has formed joint ventures with the French, the Japanese, and the Americans.  Would Constellation Energy be a good partner for China? We do not know.  However, we have to thank the Chinese employee at Constellation Energy, in a sense, for a $50 chargeback, resulting in "notifying" us a potentially interesting change in the energy industry in the United States.  We will put it under "theft" section of our accounting book, but it will be a loss well documented.

Any comments to this article? Please write to us.

This article can also be found at http://www.certifiedchinesetranslation.com/09/1208-Nuclear-Power-Constellation-Energy.html