Saturday, April 21, 2018
Business

Duke set to profit again off Crystal River nuclear plant fiasco

Duke Energy's botched upgrade project that led to the permanent closure of the Crystal River nuclear plant is the gift that keeps on giving — to its shareholders.

For utility customers, it has become an ever-bigger lump of coal.

The latest: Duke gets to pocket roughly 7 percent of the $100 million its customers will pay to stabilize the reactor's broken concrete containment building.

Duke's latest windfall comes on top of the $100 million the utility gets to keep from the original ill-fated project to replace old steam generators and increase the nuclear plant's electricity production.

As that project began, utility workers damaged the containment building so severely it would cost too much to repair. Duke then decided to permanently close what critics now call the ''Humpty Dumpty'' plant, which it had hoped would last another 20 years.

While Duke profits from its blunders, customers will be forced to pay upward of $2 billion for the worthless upgrades, repairs, replacement power and company profits related to the Crystal River plant.

None of that makes sense to one of those customers, state Rep. Dwight Dudley, D-St. Petersburg.

"In what universe, in what reality do you make egregious mistakes — some would say rising to criminal negligence — and still make a profit?" Dudley asked.

"You have a multibillion dollar asset destroyed and we're on the hook," Dudley said. "We have an open wallet, an open pocketbook and it continues to be filched by Duke Energy."

That's not all. Duke's profits mount while:

• Almost 600 plant workers will eventually lose their jobs.

• Citrus County, home to Crystal River, suffers the loss of millions of dollars in lost tax revenue, threatening county and school budgets because the nuclear plant dropped in value when it became little more than a giant paperweight.

• Ratepayers gear up to pay for a new 1,600 megawatt natural gas plant Duke wants to build to replace the nuclear plant. The price tag for that may be $1.5 billion or so.

And yes, the utility gets to make money on that project too.

Duke would not confirm the cost estimate of the project to stabilize the busted containment building, but noted that the company is entitled to send customers a bill for the expense.

Dudley said he was told the project would cost about $100 million and the state public counsel's office confirmed that estimate as "in the ballpark."

Duke, which inherited the Crystal River mess from Progress Energy after they merged in July 2012, contracted with Precision Surveillance Corp. and BWB Maintenance Services Co. to perform the work for an undisclosed contract amount.

The work includes weather-proofing the containment building to minimize water intrusion; loosening (called de-tensioning) some of the tendons that surround the structure; regreasing tensioned tendons (to prevent corrosion); and installing a concrete restraint system to prevent any concrete from falling and to protect the adjacent pools where spent nuclear fuel is stored.

"As part of the Crystal River nuclear plant decommissioning plan, we are performing work on the containment building to prepare it for long-term inactivity," said Heather Danenhower, a Duke spokeswoman.

Charles Rehwinkel, deputy state public counsel, who represents consumers before the Public Service Commission, said settlement agreements over the disastrous upgrade project assumed some work would be needed to shore up the building.

"They can't just leave an unstable structure next to the building that houses (nuclear) fuel," Rehwinkel said. "They have to put bolts through the walls and make sure it's stable for 50 years."

Under a settlement agreement with the state, the maximum Duke can charge customers for repairs, operations, maintenance and construction related to the nuclear plant is $1.466 billion.

Anything above that "the shareholders will eat," Rehwinkel said.

The cap doesn't include the cost of purchasing replacement power nor any costs for decommissioning. The current decommissioning fund contains about $780 million. Duke estimates decommissioning will cost $1.2 billion by the time the process ends in 60 years. By then, the expectation is that the fund will grow enough to cover the gap between the existing balance and the projected cost. If the fund does not grow enough, customers could face additional payments.

The utility has scheduled a public "open house" Thursday to answer questions about the decommissioning process.

On Jan. 16, the U.S. Nuclear Regulatory Commission will hold a hearing to receive public comment about Duke's decommissioning plan.

Ivan Penn can be reached at [email protected] or (727) 892-2332.

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