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Investigation sought into Crystal River nuclear plant deal

Duke Energy announced on Feb. 5 that it will permanently close the crippled Crystal River nuclear plant that has been shut down since late 2009. The damaged containment building of the nuclear plant is seen at the center of the photo.

MAURICE RIVENBARK | Times

Duke Energy announced on Feb. 5 that it will permanently close the crippled Crystal River nuclear plant that has been shut down since late 2009. The damaged containment building of the nuclear plant is seen at the center of the photo.

Consumer advocates want Duke Energy to refund its Florida customers hundreds of millions of dollars for "woefully inadequate" handling of the now shuttered Crystal River nuclear plant.

The state Public Counsel's Office, which represents consumers before the Public Service Commission, filed a petition Monday, asking the regulatory body to open an investigation into Duke's decisions about the 36-year-old nuclear plant.

The petition, backed by the 8,000-member Florida Retail Federation, is the first challenge to Duke's move earlier this month to permanently shut down the utility's sole nuclear plant in the state.

"The Public Counsel and FRF request the Commission take all necessary and appropriate actions to protect the customers … and to insure that they bear no more of the costs of the financial and economic disaster visited upon them by the CR3 outage," Public Counsel J.R. Kelly wrote in the petition.

State regulators and consumer advocates wanted Duke to repair the Crystal River nuclear plant because it provided cheap, clean electricity.

Cindy Muir, a spokeswoman for the commission, said regulators are reviewing the petition and will considered it in upcoming hearings. Sterling Ivey, a Duke spokesman, also said the utility received the petition and is reviewing it.

During an upgrade project in 2009, which included replacement of old steam generators and increasing the nuclear plant's power, the reactor's 42-inch thick concrete containment building cracked. An attempt to repair the crack and bring the plant back online led to more cracks.

The damage left Duke with a repair bill that could have reached $3.4 billion. In addition, the utility continued to amass replacement power costs of as much as $300 million a year while the reactor remained idle.

Instead, Duke decided to shut down the plant.

Duke, which took over the plant when it became the parent company of Progress Energy Florida in July, already is refunding customers $388 million for replacement power related to the outage. The utility pressed its insurance company to cover the costs of the damage. But in the end, the insurer, the Nuclear Electric Insurance Limited or NEIL, settled with the utility for a fraction of what it would take to repair the plant.

Even so, the full payment by NEIL of $835 million was the largest payout by the insurance company in its more than 30-year history.

In its petition, the public counsel and the retail federation asked state regulators to order Progress and its parent company Duke to renegotiate with its insurance company and collect a larger amount for customers or require the utility's shareholders to make up the difference.

The consumer advocates want at least $500 million more to make up for what they consider a low settlement amount with the insurance company.

In addition, the petition seeks to block Duke from recovering $111 million from customers for money it spent to upgrade the Crystal River plant — improvements that did not produce a single kilowatt of power for customers.

Duke, the petition states, "has an obligation to its captive customers to exert full efforts to provide service at the lowest reasonable costs — which, in this instance, means doing everything necessary to maximize its recovery under the NEIL policies in order to minimize costs to its customers."

Ivan Penn can be reached at ipenn@tampabay.com or (727) 892-2332.

Investigation sought into Crystal River nuclear plant deal 02/25/13 [Last modified: Monday, February 25, 2013 10:19pm]
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