Analysts: TXU's Nuke Move Is A Greenhouse-Gas Play
TXU, the energy giant being acquired by Kohlberg Kravis Roberts and Texas Pacific Group, reportedly intends to shift future plant construction to nuclear from coal. Kyle Cooper, director of research at IAF Advisors, and Peter Fusaro, chairman, founder and energy analyst at Global Change Associates, discussed TXU's motives on "Closing Bell."
Fusaro told CNBC's Melissa Francis it "looks obvious" that Congress will take action on so-called greenhouse gasses -- and therefore, TXU is positioning itself as a play on that environmental policy. He notes the strict 25% fossil-fuel gas reduction mandated in California as the likely shape of things to come nationally.
Cooper agreed with Fusaro's view on coal's regulatory future, adding that overall costs are cheaper for nuclear power plants, due to their "40-, 50-year amortization." The research director conceded that disposal of radioactive waste may one day prove quite costly -- whereas with coal, the major investment is up front. However, he noted that "local politics" can have more impact than economics on the nuclear-power industry -- as some communities are resistant to what they view as a greater danger than greenhouse gases.