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UniStar Nuclear adds U.S manufacturing partner for its planned nuclear power plants

Press Release

August 01, 2006

Expands One-Stop Shop for U.S. Evolutionary Power Reactor Fleet to Include U.S. Manufactured Major Components

August 1, 2006

UniStar Nuclear, the jointly developed enterprise of Constellation Energy (NYSE: CEG) and AREVA, today announced that AREVA NP Inc. and BWX Technologies, Inc. (BWXT), a subsidiary of McDermott International, Inc. (NYSE:MDR), have signed an agreement that will re-establish commercial nuclear power plant component manufacturing in the United States and will support the UniStar business model and future fleet of nuclear power plants in North America. The agreement between the two nuclear technology development and manufacturing leaders is a major link in the UniStar supply chain. It will result in the ability to manufacture components for UniStar's fleet of U.S. Evolutionary Power Reactor (U.S. EPR) advanced nuclear power plants, as well as commercial nuclear plant replacement components for operating North American plants.

"Adding BWXT's proven precision manufacturing capability for high-quality major plant components strengthens UniStar's one-stop shop approach to license, build and operate advanced nuclear power plants in North America," said Michael J. Wallace, co-chief executive officer of UniStar Nuclear, executive vice president of Constellation Energy, and president of Constellation Energy subsidiary, Constellation Generation Group. "Both the Bush Administration and Congress have done the nation a real service by developing, passing and carrying out the Energy Policy Act of 2005, which will enable both BWXT and UniStar Nuclear to play an important role in increasing the nation's supply of reliable electricity in the future.

"Wallace added that BWXT's position as a global leader in precision nuclear manufacturing enhances an already strong UniStar business model, particularly as U.S. EPR projects are developed. According to the Nuclear Energy Institute, there is potential for up to 18 license applications for new reactors in the United States by 2009. He said that with so much activity, global supply of forgings and major components for new plants may well become an issue.

"We're extremely proud of the fact that we're ushering in a new era of nuclear power in America. To meet the challenges associated with that effort, we must establish the necessary domestic manufacturing infrastructure to support the anticipated demand," said Tom Christopher, CEO of AREVA Inc. and co-chief executive officer of UniStar Nuclear. "BWXT is a proven, reliable supplier of both heavy and precision components of the highest quality whose facilities in the 1960s and 1970s supplied a number of nuclear components that are in use in the U.S. operating nuclear fleet today. Together with our nuclear manufacturing engineering support, we are establishing a world-class entity that fully supports the UniStar business model's vision for a fleet of U.S. EPRs to be made in America by Americans and for Americans.

"BWXT's Nuclear Operations Division facility located on the Ohio River in Mount Vernon, Ind., will manufacture the components under the agreement as a subcontractor to AREVA. The facility currently manufactures non-commercial nuclear components for the U.S. government, and it could begin manufacturing commercial nuclear components as early as 2006. BWXT has a similar manufacturing facility in Barberton, Ohio, that will continue its non-commercial manufacturing operations. Both the Mount Vernon and Barberton facilities recently received renewed nuclear accreditation from the American Society of Mechanical Engineers (ASME). Authorizations granted include the "N", "NPT" and "NA" certificates to support BWXT's participation in commercial nuclear manufacturing.

"Being involved in a re-emerging nuclear market with a world industry leader like AREVA is a strategic move forward and a great step for our company. This partnership has the potential to grow our already substantial base of nuclear manufacturing," said John A. Fees, president and chief operating officer of BWXT. "AREVA's EPR design is already under construction -- no other supplier can provide the completeness and feasibility of their design in support of long-lead procurement of heavy components for new plant construction. BWXT is excited to be working with AREVA as the American nuclear industry continues to strive for national energy security."

BWXT has designed and fabricated thousands of ASME Code pressure vessels and has been a major supplier of heavy fabrications to the nuclear industry since its inception. The Nuclear Operations Division at its Mount Vernon facility has a growing and active workforce and its manufacturing space covers 580,000 square feet. The facility recently completed extensive upgrades in equipment capabilities and capacities including multiple, large, full-contouring CNC horizontal and vertical machining centers; large gantry robotic welding centers; and state-of-the-art support equipment for machining and welding. "We are committed to delivering our high-quality, specialized nuclear manufacturing skills and resources to the commercial marketplace. This agreement demonstrates BWXT's confidence in the renewal of commercial nuclear power in the United States," said Fees.

Constellation Energy selected the advanced EPR nuclear power plant technology when Constellation Energy and AREVA formed UniStar Nuclear as a jointly developed endeavor to provide a unique, flexible business framework to develop, license, deploy and operate of an initial fleet of four advanced U.S. EPRs.

"UniStar Nuclear, our joint endeavor with Constellation Energy, and our manufacturing agreement with BWXT clearly demonstrate AREVA's substantial commitment to deploying a new generation of safe, reliable and economical nuclear power plants in North America to help ensure our energy security and independence," said Christopher.

More about...

UniStar Nuclear is headquartered in Annapolis, Md.

BWXT, headquartered in Lynchburg, Virginia, is the premier manager of high-consequence nuclear and national security operations. The Company is a proven leader in fuel development and fabrication, nuclear component manufacturing, nuclear plant design, nuclear facility operations and advanced nuclear research. BWXT has delivered the most sophisticated nuclear components ever produced and has consistently achieved excellence in the safe and efficient conduct of nuclear operations while meeting rigorous customer requirements. The Company's diverse capabilities also include decontamination and decommissioning, waste management, engineering, and project management services. BWXT has more than 11,000 employees in 11 states.

Constellation Energy, a FORTUNE 200 company with 2005 revenues of $17.1 billion, is the nation's largest competitive supplier of electricity to large commercial and industrial customers and the nation's largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of more than 100 generating units located throughout the United States, totaling approximately 12,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.


Jarret Adams
Phone: +1 (306) 343-4637
Email: jarret.adams@areva.com

Véronique Larlham
Phone: +1 (306) 343-4503
Email: veronique.larlham@areva.com