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Venture

Robert Trigaux

Progress Energy may invest in other's nuke plants, cites 'concept of regional nuclear'

12

February

 

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Progress Energy may buy a stake in two proposed nuclear reactors owned by other companies in South Carolina as the Raleigh-based power company considers options to finance nuclear expansion. So says today's coverage in Progress Energy's hometown newspaper, the Raleigh News & Observer, citing a Bloomberg News report.

(Photo above: In Florida, Progress Energy's Crystal River nuclear power plant undergoing repairs. Courtesy of Progress Energy.) 

Progress CEO Bill Johnson said Progress has discussed buying a stake in two proposed reactors about 25 miles northwest of Columbia. The project is jointly owned by the Scana Corp. and Santee Cooper, the state-owned electric utility that has publicly said it's looking to sell off some of its share in the project. Johnson made the comments in New York, where he spoke at a nuclear industry conference and made a series of media appearances.

If you've been reading the Venture blog (see posting here), you'll recognize those proposed South Carolina nukes as the same ones that the municipal Orlando Utilities Commission may invest in.

To be clear, Progress Energy is the parent of Progress Energy Florida which already operates the still sidelined Crystal River nuke plant in Citrus County and has proposed building a twin reactor nuclear power plant in Levy County. That plant has been pushed well into the future and Progress Energy Florida now says it will only proceed to the point of getting a federal license to build the plant. Only then it will see if the plant should go further.

Now comes Progress Energy CEO Johnson talking about investing in others' nukes, a step he claims is consistent with Progress' approach to nuclear expansion based on joint financing or co-ownership.

Progress spokesman Mike Hughes declines to say whether Progress is still interested in joint ownership of the $9.1 billion V.C. Summer nuclear project in South Carolina or whether those talks have ended without resolution. "We certainly have talked with all of our neighbors," Hughes is quoted saying.

Then Hughes delivers the most significant quote: "The concept of regional nuclear is a very important one."

That's worth repeating. The concept of regional nuclear is a very important one.

Makes one wonder if the future of nuclear power ownership will be some giant co-owned cooperative or subsidiary of the big power companies, if only to share the financial burdens and the accompanying risks? As the News & Observer notes: "Joint ownership is a necessity in an era of skyrocketing nuclear costs. Progress' twin reactor nuclear expansion in Florida is estimated to cost as much as $22.5 billion." Here's the complete Raleigh newspaper's story.

Also, check out this Forbes video interview with Progress Energy CEO Bill Johnson, who says Progress Energy is a "small company" compared to the demands for capital ahead. He says the industry is in a transformation in the coming decades with "daunting" capital outlays. Johnson also says customers are using less electricity in a time of increasing prices.

In fact, Johnson says that for the first time since World War 2, consumer demand for electricity fell (by 4 percent) in 2009. "Is it confidence? A new awareness of conservation? We really do not know," says Johnson.

Don't forget: The bigger Duke Energy is buying Progress Energy.

Some striking trend are afoot in power generation and how to pay for it. Brace yourself for higher rates ahead!

-- Robert Trigaux, Times Business Columnist

 

[Last modified: Saturday, February 12, 2011 7:41am]

    

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