TXU orders 2 Mitsubishi Heavy reactors

Japan's largest heavy machinery maker Mitsubishi Heavy Industries Ltd. said Wednesday it has received an order for two nuclear reactors from U.S. electric utility TXU Corp., the first export deal of equipment made by a Japanese company.

Mitsubishi Heavy will provide two US-APWRs, its new pressurized water reactor with 1,700 megawatt-hours of generation capacity each, for TXU's nuclear power plant in the suburbs of Dallas, the Japanese manufacturer said in a statement.

It's the first time a Japanese company has received an order from abroad for a nuclear power reactor made in Japan, said MHI spokesman Kengo Tatsukawa.

Tatsukawa said the company could not disclose the amount of the deal because of "confidentiality rule" with the client.

The Nikkei business newspaper said the combined value is estimated at 600 billion yen ($5.17 billion).

TXU, the largest power operator in Texas, formally notified its reactor selection to the U.S. Nuclear Regulatory Commission on Friday, the statement said. The U.S. power operator plans to start commercial operations at the plant with new reactors starting from 2015 to 2020, it said.

Tokyo-based Mitsubish Heavy must submit to the NRC its formal application for the reactor's design certification by the end of this year.

TXU announced Feb. 26 it had signed a deal to be acquired by private equity firms for $32 billion, in what would be what would be the largest private buyout in U.S. history. The Securities and Exchange Commission has filed a civil lawsuit in federal court in Chicago alleging illegal insider trading in connection with the $69.25-per-share buyout deal led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group.

The buyers have promised to drop plans for eight proposed coal-burning plants that were opposed by environmentalists and city leaders in Dallas and Houston. They will, however, try to go ahead with three other coal-fired plants proposed for central Texas.

The 1979 partial meltdown of the Three Mile Island nuclear plant in Pennsylvania led to a virtual halt in new plant construction in the United States. There are now about 100 nuclear plants in the U.S., producing about 20 percent of the country's electricity.

But fears of global warming and the rising cost of natural gas and coal may finally change the image of nuclear power.

In August 2005, President Bush signed an energy bill that streamlines applications and offers loan incentives, tax credits and federal insurance for new plants.

Mitsubishi estimates that "a few dozen" nuclear plants will be built in the U.S. by around 2030.