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ALLENTOWN, PA-PPL Nuclear Development LLC, a subsidiary oflocally based PPL Corp., has signed an agreement with an affiliateof Baltimore-based UniStar Nuclear Energy to prepare an applicationto obtain a license to construct and operate a new nuclear powerplant near its existing Susquehanna nuclear units in Berwick.UniStar is a joint venture between Constellation Energy, also basedin Baltimore, and EDF Group, a European energy companyheadquartered in Paris.

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The application, based on Areva's US Evolutionary Power Reactordesign, will be submitted to the US Nuclear Regulatory Commissionby the end of 2008. Although PPL has not yet decided to moveforward with construction, the application time frame helpspreserve the potential for federal production tax credits andfederal loan guarantees under the US Energy Policy Act of 2005.

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Paris-based Areva has US headquarters in Bethesda, MD. Its EPRdesign utilizes pressurized water reactor technology, which is longproven, according to Bryce Shriver, the PPL principal who overseesdevelopment of the company's nuclear strategy. In a statement, healso says the design "includes robust safety systems." Contractingwith UniStar also gives PPL the opportunity to be part of astandardized fleet of US EPR facilities that share the same designand operating procedures.

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"PPL would not undertake nuclear construction alone," saysWilliam Spence, PPL's EVP and COO, in a statement. "Because of thelarge capital commitment required, we would proceed with nuclearconstruction only as part of some type of joint-venturearrangement." PPL is in talks regarding such arrangements, butSpence says, "it would be premature to discuss details of thoseinitiatives at this time." A call to PPL wasn't returned bydeadline.

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PPL and UniStar are currently evaluating tests that have alreadybeen performed to determine the suitability of the proposedlocation on land it owns proximate to the Susquehanna plant. Aninitial reactor came online at the site in 1983, followed by asecond in 1985.

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"Given the growing concerns about global climate change and therising need for new power plants in the Northeast region, it makessense for PPL to pursue a license for a third nuclear unit," Spencesays. He also notes that the possible third unit "is just one partof PPL's comprehensive plan to grow our generation portfolio,"which also includes the possible acquisition or construction ofcoal, hydroelectric, natural gas and renewable energyfacilities.

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