The company expects to submit the applications in 2008, with the new capacity expected on line between 2015 and 2020.

TXU’s plan includes using its existing asset base where possible, including adding more than 2 GW of new capacity at its Comanche Peak nuclear facility.

Acknowledging that nuclear power generation capital costs are not competitive with other technologies, the company now intends to employ a technical and economic feasibility process with nuclear equipment manufacturers such as GE and Areva with the objective of driving down capital costs by 30 to 40% from average public industry estimates of approximately $2,100/kW installed.

C. John Wilder, TXU Corp chairman and CEO commented: “Nuclear generation offers the potential to deliver our customers lower, stable prices and continue to reduce Texas’ over-reliance on natural gas.”

TXU plans to forge partnerships to take advantage of scale while sharing the risk of such large investments and has held preliminary discussions with the Lower Colorado River Authority and the City of San Antonio’s CPS Energy.

By filing before the end of 2008, TXU also expects to gain in nuclear production tax credits, nuclear risk insurance and federal loan guarantees specified in the 2005 Energy Policy Act.

The news follows TXU’s recent announcement of plans to develop 9.1 GW of new coal-fired capacity in the state. However, despite this, by 2013 demand growth is expected to absorb the proposed capacity and reserve margins could again approach levels the Electric Reliability Council of Texas considers insufficient to maintain reliability.

Nonetheless, the company has been dealt a blow after judges recommended denial of an air emissions permit for its proposed 1,600 MW Oak Grove coal-fired plant, under development by TXU in Robertson County, Texas.

The judges argued that low-NOx burners and selective catalytic reduction (SCR) would not be effective with the lignite fuel TXU intended to use at its Oak Grove plant. The Texas Commission on Environmental Quality will now make a decision on the plant.

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