Gov. Jindal, The Shaw Group, Inc. and Westinghouse Announce Module Fabrication and Assembly Facility in LA

Press Release August 26, 2008 Economic Development, Energy and Environment BATON ROUGE – Today, Governor Bobby Jindal joined The Shaw Group Inc. and Westinghouse to announce that the companies will build the first module fabrication and assembly facility focused on constructing components for new and modified nuclear reactors in the United States. The facility, a joint venture between Shaw and Westinghouse, will be located at the Port of Lake Charles. Additionally, Governor Jindal and Shaw also announced that the company has committed to keep and grow its corporate headquarters in Baton Rouge for at least fifteen years. Shaw Chairman, President, Chief Executive Officer Jim Bernhard, Controller of Westinghouse’s Nuclear Power Plants Division James Young and Louisiana Department of Economic Development (LED) Secretary Stephen Moret were all part of today’s announcements in Baton Rouge and Lake Charles. In Baton Rouge, the group was also joined by Baton Rouge Mayor Melvin L. “Kip” Holden, and at the Lake Charles announcement, U.S. Rep. Charles Boustany, Lake Charles Mayor Randy Roach, Port of Lake Charles Director Adam McBride and Chamber Southwest President and CEO George Swift joined the group. In addition to constructing components for new and modified nuclear reactors, the new Lake Charles facility will have the capability to manufacture modules for chemical sites and petrochemical plants around the world. It will create at least 1,400 jobs in Lake Charles over the next five years at an average salary of $50,000 plus benefits. Shaw has also committed to increase its professional/non-craft jobs by 1,500 (over and above the new jobs created in Lake Charles) at an average salary of $50,000 plus benefits. With a total of nearly 2,900 new direct jobs and a total new payroll in excess of $1 billion over the first 10 years, this is one of the largest projects ever announced in Louisiana. Governor Jindal said, “This is a huge day for our state. Today we officially announce that Louisiana will be home to the first nuclear module manufacturing facility in the U.S., Shaw will retain their headquarters in Baton Rouge for at least 15 years, and Shaw and Westinghouse together will generate 2,900 new jobs in our state. This is a truly historic announcement for the people of Louisiana and our entire nation. As we continue to face rising energy prices and search for ways to decrease our nation’s reliance on foreign sources of oil, we know that we have to invest more in alternative domestic energy sources like wind, ethanol, solar and nuclear energy. This announcement does not only represent new jobs and a new, vibrant economic engine in our state, but also shows that Louisiana is harnessing the future of the energy industry and the most innovative thinking of the next generation.” It has been roughly three decades since the construction of a new nuclear reactor in the United States. This new Lake Charles facility is expected to be operational in mid-2009, pending regulatory approvals. “I want to thank Governor Bobby Jindal, and Secretary Stephen Moret, as well his Economic Development staff, and the many officials in Lake Charles who worked so diligently to site the new module fabrication and assembly facility at the Port of Lake Charles,” said J.M. Bernhard Jr., chairman, president and chief executive officer of The Shaw Group Inc. “Additionally, The Shaw Group is glad to formalize the 15-year commitment to Baton Rouge and the State of Louisiana because both decisions announced today strengthen an already strong relationship with our home state.” “The agreement to fabricate modules for the AP1000™ nuclear power plant in Louisiana again proves that the nuclear renaissance is now a reality,” said Westinghouse Sr. Vice President, Nuclear Power Plants, Dan Lipman. “Westinghouse and our consortium partner The Shaw Group are providing four new plants in China, and we have been identified for no less than 14 plants here in the United States. Other markets are fast emerging. It is imperative, therefore, that we move decisively to develop the infrastructure to meet the needs of our fast-growing and essential industry. We thank all of our partners and the state of Louisiana for the hard work and commitment that makes today’s announcement a reality. We look forward to a long and mutually beneficial relationship.” According to an economic impact analysis performed by Louisiana State University, the Shaw/Westinghouse agreement will result in $17.8 billion in new sales, $4.5 billion in new earnings and 9,205 total new Louisiana jobs, including indirect jobs, over 15 years. These benefits do not include the value of retaining the majority of Shaw’s existing jobs or the potential for Louisiana to become the national leader in nuclear component manufacturing at a time when the nuclear energy industry is expected to experience rapid growth for decades to come. “We are extremely excited about the announcement of Shaw and Westinghouse locating a new module fabrication and assembly facility in Lake Charles,” said Roach. “This is a major project for our state and our local community. It will not only bring new jobs, it will help to diversify and strengthen our local economy.“ "The Shaw Group has been a tremendous asset to the Baton Rouge community as a major employer, a contributor to our local economy and a generous benefactor to local efforts that improve the quality of life for everyone," Holden said. "From their headquarters here, they touch every corner of the world; but most of all they touch the lives of the citizens of East Baton Rouge Parish in many ways. I am extremely pleased that the Shaw headquarters will remain here in Baton Rouge, keeping our city on the map as the primary location of this international corporation." Moret noted, “Due to a recent streamlining of the federal permitting process for nuclear reactors, increasing costs for traditional energy sources and likely greenhouse gas legislation at the federal level, the nuclear industry is poised for a renaissance in the United States. Today’s announcement begins to position Louisiana as a major player in the nuclear energy sector at an exciting juncture in the industry’s development.” If all performance requirements are met, Shaw and the joint venture will receive a state incentive package worth approximately $210 million over 15 years. LSU’s economic-impact analysis indicates Louisiana will receive $480 million in additional tax revenues from this agreement. The state incentive package includes $32.5 million for infrastructure, workforce training, and dock bulkhead improvements; the Quality Jobs incentive (roughly $37.5 million over 10 years); the Industry Assistance Program (tax exemptions of up to $5 million per year for 10 years – total up to $50 million); and a forgivable, performance-based loan (drawdown of $9 million per year for 10 years). Approximately $19.5 million in local incentives are being provided, including an effective 15-year property-tax abatement at the Port of Lake Charles worth roughly $17 million; infrastructure grants of $1 million each from the City of Lake Charles and Calcasieu Parish; and a $500,000 contribution from the Port of Lake Charles toward bulkhead improvements. To protect the return on investment for the state and local governments, the incentive package includes strict drawback terms tied to capital investment and job creation requirements. ###