Monday, February 19, 2018
Business

Duke Energy sues over cost of Levy County nuclear project

Westinghouse Electric Co. wants Duke Energy to pony up almost $500 million related to the canceled Levy County nuclear project.

Duke denies it owes Westinghouse any money and has now sued for a refund of $54 million for work it says was never performed.

The case, filed on Friday in U.S. District Court in Charlotte, N.C., is the latest dispute over a project that was once estimated to cost Duke's 1.7 million customers $24.7 billion.

Duke announced plans to cancel the two-reactor project last year in part because of licensing delays by federal regulators and after reports in the Tampa Bay Times showed it would be more cost effective to build a natural gas facility.

By that time, the utility had already spent $1.5 billion on siting, planning, engineering, parts, financing costs and its own profit — expenses state regulators passed onto Duke's Florida customers in settlement agreements over the last two years.

Charles Rehwinkel, deputy state public counsel, who represents consumers before the Public Service Commission, said Monday that the $500 million that Westinghouse is demanding is not part of the $1.5 billion customers are paying.

"We don't think any litigation costs are allowed," Rehwinkel said. "It is not part of what the commission has approved. It is not part of the $1.5 billion.

"This is 'new money' that has never been part of any cost estimate that Duke has presented to the commission for recovery," he said.

Nicole LeBeau, a Duke spokeswoman, said the utility does not comment on pending litigation.

Westinghouse also would not comment on the litigation.

The lawsuit states that Duke had paid Westinghouse $54.1 million for turbine generators and reactor vessel parts that were never produced. Duke had suspended most work on the project in 2009. Duke now wants a refund.

Duke also claims that Westinghouse has demanded $482 million in reimbursement for costs related to winding down the contract. Duke says it has paid $65 million but owes Westinghouse nothing more.

If Westinghouse prevails in its demand for the $482 million, Duke's customers and shareholders could be forced to pay it.

Last August, Duke said it would cancel the engineering and construction contract for the Levy County plant as part of a comprehensive settlement agreement with the state over its troubled nuclear program in Florida.

In addition to canceling the Levy project, Duke permanently closed its sole existing nuclear plant, less than 10 miles south of the Levy site in Crystal River.

The Crystal River nuclear plant was damaged during an upgrade project in 2009. Attempts to repair it and bring it back online resulted in more damage.

Duke estimated it would cost as much as $3.4 billion to fix the plant. The utility decided instead to decommission it.

Customers also continue to pay hundreds of millions of dollars for that reactor, despite the fact that they will never receive another kilowatt of power from it.

Information from the Charlotte Observer was used in this report. Ivan Penn can be reached at [email protected] or (727) 892-2332.

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