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Robert Trigaux

Courts, federal regulators deliver fresh blow to fate of Duke-owned Crystal River nuclear power plant

8

August

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Will the Crystal River 3 nuclear power plant, shuttered for years, ever produce electricity again? (Photo: Will Vragovic, Tampa Bay Times)

NOTE (Aug. 15): An earlier version of this blog posting mischaracterized the federal court decision impact on the NRC's ability to issue licenses for nuclear power plants. The version below has been corrected. 

Wake up and good morning. The Crystal River nuclear power plant in Citrus County north of Tampa Bay just can't get any respect. Built by St. Petersburg's Florida Power Corp., then owned by Progress Energy in a 2000 acquisition of Florida Power, the nuke plant's future now belongs to new owner Duke Energy. Duke inherited "CR3" after a tumultuous and, frankly, bumbling purchase of Progress Energy that featured a Machiavellian coup at the highest executive ranks that has hurt Duke's credibility as well as alienated utility regulators who will judge Duke's request for higher rates in the coming months and years.

Now comes news that CR3 just suffered another setback. This is a regulatory one. As reported by the Wall Street Journal, the Nuclear Regulatory Commission says it will stop issuing licenses for nuclear plants until it addresses problems with its nuclear-waste policy that were raised by a recent federal appeals court decision. Get more perspective on this decision here, here and here in Tampa Bay Times reporter Ivan Penn's latest report.

crystalrivernukecrackcontainmentwallprogressenergy.jpgLet's set the CR3 scene. The plant -- Duke's one and only nuclear power plant in Florida -- was shut down in the fall of 2009 after then-owner Progress Energy cut a hole in the wide of the plant's concrete containment vessel to swap out some generators. Cracks were then discovered in the interior walls (photo, right) of the containment vessel, prompting Progress Energy to try a do-it-yourself repair normally handled by outside experts. More cracks developed and -- long story made short -- CR3 has remained shut down ever since. It no awaits a decision from Duke, clearly more skeptical of CR3's fate than was Progress Energy, whether to attempt a difficult and multi-billion dollar repair of her plant's containment vessel or to simply call CR3 a loss and shut it down for good. That choice also carries extraordinary costs (no doubt to Florida ratepayers) as Duke would be forced eventually to build a replacement power plant (most likely powered this time by cheap natural gas) in order to replace the electricity no longer provided by CR3 but currently purchased by Duke elsewhere at higher cost. (Photo courtesy Progress Energy.)

The NRC decision to temporarily stop issuing licenses for nuclear power plants means CR3's request for a license renewal -- one permitting CR3 to continue operating an additional 20 years beyond its original 40-year lifespan, which it is about to reach -- is in limbo. First, federal nuclear regulators must satisfy the U.S. Appeals Court that they have a viable way to store nuclear waste safely until a national repository can be built.

Is this a big deal? It could be. Here's why:

1. The only reason Duke has to spend billions to fix CR3 and get it running again is the assurance it has a renewed license and approval to run the plant another 20 years. Why spend all that repair money if the license renewal is not forthcoming? The NRC can issue license renewals but only after convincing the federal court that it has a safe way to store nuke waste.

2. The poor handling of the repairs at CR3 -- resulting in the nuke plant's shutdown now going on three years come this fall -- is supposedly one of the biggest reasons that buyer Duke Energy soured on purchasing Progress Energy and, as agreed to in the original deal, had Progress Energy CEO Bill Johnson becoming CEO of the post-merger Duke-Progress company, the largest utility in the United States. Johnson was named CEO when the deal recently closed only to be canned by the board of directors on the very same day.

3. The feds for decades wanted to store nuclear waste under Yucca Mountain in Nevada but the rise of that state as a popular place to live has empowered Nevada politicians to successfully resist Yucca as a waste site. Bottom line? There is no quick fix for a national waste site, which could delay further approvals of both new nuclear plant licenses (heads up, Levy County) and license renewals sought by CR3 and eight other existing nuclear power plants seeking extended service.

Jim Rogers, who ran Duke as CEO and was to become chairman of the post-merger company, is now CEO and chairman in the wake of Johnson's dismissal. And it is Rogers who will appear this coming Monday at a Florida Public Service Commission hearing in Tallahassee that will focus on CR3's future.

-- Robert Trigaux, Business Columnist, Tampa Bay Times

 

 

 

 

[Last modified: Wednesday, August 15, 2012 11:43am]

    

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