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Crystal River nuclear plant outage costs approach $250 million

Through June 30, Progress Energy had spent $245 million on the Crystal River nuclear plant outage, including $79 million on repairs to an extensively cracked wall in the reactor building.

Progress Energy

Through June 30, Progress Energy had spent $245 million on the Crystal River nuclear plant outage, including $79 million on repairs to an extensively cracked wall in the reactor building.

The outage at the Crystal River nuclear plant has cost nearly a quarter of a billion dollars so far, and Progress Energy said Friday it plans to ask the state for approval to have customers chip in for repairs.

The utility also said it hopes to restart the plant in the fourth quarter of this year, not the third quarter, as it predicted in May.

"The scope of the work has expanded as we've gotten further into it, and we're committed to getting this work done right," Progress Energy president and chief executive officer Bill Johnson said in a conference call with stock analysts.

Through June 30, Progress Energy had spent $245 million: $79 million on repairs to an extensively cracked wall in the reactor building and $166 million on replacement power while the plant is offline.

During that time, insurance reimbursed Progress Energy for $42 million of those expenses.

Insurance is expected to cover more of those costs. But the company plans to seek state approval to charge customers for whatever insurance doesn't cover, Johnson said. He expects the Florida Public Service Commission to consider that request next year.

It is impossible now to say how much customers' electric bills could go up, Progress Energy spokesman Mike Hughes said. It's also too soon to predict what the total cost of the outage will be or exactly how much of it will be covered by insurance.

The company is trying to keep the running tab on the outage as low as possible by monitoring when it's best to generate its own replacement power and when it's cheaper to buy that electricity from other utilities. The Crystal River nuclear plant typically generates about a fifth of Progress Energy's power in Florida.

The company powered down the plant in September for a major maintenance project that originally was expected to cost $310 million and to be finished in 2009.

But soon after the job began, workers found that a large section of the reactor building's fortress-thick outer wall had separated into two layers. The discovery was made as workers cut a two-story-high hole in the wall so they could remove and replace two huge steam generators.

Somehow, the combination of easing the tension in a series of reinforcing steel tendons inside the wall and cutting the hole itself caused a gap to form, the utility says.

The gap, known as a delamination, was up to 2 inches wide. It formed about 9 inches below the outer surface of the 42-inch-thick wall and was first thought to extend up to about 30 feet from where the hole was being cut.

Progress Energy had expected the plant to be back in operation by the middle of the year, but in May it changed that estimate to the third quarter. Now it says it is targeting October or later.

That's because workers who were removing the separated layer of concrete discovered some additional cracking higher up on the wall that they had to excavate and repair.

"That's just time-consuming and precise work," Johnson said. "This is something that you need to do right and you need to take the time to do it right."

Repairs now are well underway, with workers removing the separated layers of concrete and pouring new concrete to rebuild the wall. Exactly when the plant returns to service will depend on weather, testing and reviews by regulators. The U.S. Nuclear Regulatory Commission sent a special inspection team in early October to monitor the repair.

Asked whether the company could seek reimbursement from its contractors on the generator replacement job, Johnson said he wouldn't answer definitively.

"Obviously you have recourse to contractors if they didn't do something right, didn't act reasonably," he told analysts. "This event is as complicated an event as anyone, I think, has seen in the civil (engineering) industry. It took us several months with a number of supercomputers to figure out what actually happened."

While the company might ask at some point whether its contractors should pick up some of the tab, Johnson said the focus now is on getting the plant fixed.

Richard Danielson can be reached at danielson@sptimes.com or (813) 226-3403.

Second-quarter earnings

Progress Energy reported a 2.6 percent rise in revenue to $2.37 billion, and profit of $180 million, or 62 cents per share, up from $174 million, or 62 cents per share, from the second quarter of last year.

Crystal River nuclear plant outage costs approach $250 million 08/06/10 [Last modified: Friday, August 6, 2010 9:46pm]

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