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If Crystal River nuclear power plant never comes back online, what happens to your electric bill?

Spent fuel rods at the Crystal River Nuclear Plant are arranged in a grid under about 30 feet of water. Decommissioning the plant could cost hundreds of millions of dollars.

WILL VRAGOVIC | Times

Spent fuel rods at the Crystal River Nuclear Plant are arranged in a grid under about 30 feet of water. Decommissioning the plant could cost hundreds of millions of dollars.

Progress Energy customers can expect higher electric bills if the utility's sole nuclear power plant in Florida shuts down permanently.

Shutting down a nuclear plant involves hundreds of millions of dollars in costs. Progress Energy also has already made it known that it will need another power generator to make up for the loss — also an expense the utility's customers would shoulder.

"It they decommission the plant, it could end up costing ratepayers a heck of a lot," said J.R. Kelly, the state's public counsel, who represents consumers before the Public Service Commission. "Rates would go up."

Progress Energy took the plant offline in September 2009 for a major maintenance project. Workers soon discovered a crack in the nuclear reactor containment wall. Progress later found a second crack just as it was going to bring the reactor back online.

Progress Energy now is evaluating whether it makes economic sense to continue operating the nuclear plant or replace it with a different kind of energy generator, such as natural gas. The utility says it will update the PSC by the end of June.

The St. Petersburg Times spoke with experts about the plant and the impact closing it would have.

What kind of power source would likely replace the Crystal River nuclear reactor if it had to close?

Kelly and the Public Service Commission both say the most likely replacement would be a natural gas plant because it is cleaner and less expensive than coal.

What would a natural gas plant cost to build?

Progress Energy this month completed and activated a 600-megawatt gas-burning plant in North Carolina that cost some $575 million and took about four years to develop and build.

What hurdles would Progress Energy have to clear to build a natural gas plant?

First, a new plant may require the Public Service Commission to assess whether there is a need for a primary power source and whether the proposed unit is the most cost-effective available, said Todd Brown, a PSC spokesman.

Who would pay for it?

Ultimately, Progress Energy ratepayers would pick up the tab for any new power plant through increases in their rates. The Public Service Commission would have to approve any rate increase.

Could Progress Energy charge customers in advance for construction of a natural gas plant?

No. There is no special cost recovery for a natural gas plant. The costs associated with constructing a new plant are typically added to the rate base after the plant begins service, usually as part of a rate case.

Is the trouble with the Crystal River Nuclear Plant likely to cause an increase in utility rates anytime soon?

Not for more than a year at least. There is a settlement agreement in place now that locks the base rate in through 2012. Base rates will not change before January 2013 and only after a review by the Public Service Commission.

The base rate freeze does not apply to the fuel rate, which rises and falls based on the cost of coal and natural gas. Utility companies do not make money on the fuel charge. It is a pass through fee to consumers.

Would a coal plant be an option?

Not likely. Coal raises issues of carbon emissions, new rules by the Environmental Protection Agency and opposition from environmentalists. That all amounts to higher costs for construction and operation and higher costs for ratepayers.

Could they build another nuclear plant at that site?

The lengthy development, regulatory and construction process would be major hurdles. It can take 10 years or more under most circumstances for a utility to build a nuclear plant. In the meantime, the utility might have to buy electricity from other sources.

Does insurance cover any of the costs associated with the plant going offline?

Yes. Progress Energy's insurance covers the cost of repairs and at least some of the costs associated with the loss of power from the plant. It's not clear exactly how much insurance will cover at this time.

Would Progress Energy consider solar power as a replacement?

No. For now, solar is not considered a primary power source. It is generally used to supplement main power sources like nuclear, natural gas and coal.

Is Progress Energy considering solar power at all?

Yes. The utility has contracts totaling 400 megawatts of power with third party developers, but no deadline has been set for development of those solar sites. For comparison, the lone Crystal River nuclear reactor could produce 838 megawatts before it went offline.

Will the decision about what happens at Crystal River determine whether Progress Energy moves forward with plans for the new Levy County nuclear plant?

Jon Franke, vice president of the Crystal River Nuclear Plant, said the decision about Crystal River would not affect plans for the Levy County plant.

Progress Energy has not made a final decision whether to build the Levy County plant but continues to move through regulatory hurdles. The utility is awaiting operating license approval by the Nuclear Regulatory Commission, which is expected in late 2012 or early 2013. It is not scheduled to open until at least 2021.

Times researcher Carolyn Edds contributed to this report. Ivan Penn can be reached at ipenn@sptimes.com or (727) 892-2332. Follow him on Twitter at www.twitter.com/Consumers_Edge and find the Consumer's Edge on Facebook.

About

Progress Energy

Headquartered in Raleigh, N.C., the utility has 3.1 million electric customers, 1.6 million of them in Florida. It earned $889 million in 2010 on operating revenues of $10.19 billion. Its stock price closed at $46.93 on Wednesday, just a couple dollars short of its 52-week high of $49.03. A $13.7 billion merger with Duke Energy announced in January would create the largest electric utility in the country.

Progress Energy's fuel mix in Florida*

EnergyPercent
Natural gas51
Coal31
Nuclear14
Renewable2.4
Oil0.8

* When the Crystal River nuclear reactor is operating.

Source: Progress Energy

Progress Energy's fuel mix in Florida*





















































Energy



Percent



Natural gas



51



Coal



31



Nuclear



14



Renewable



2.4



Oil



0.8

* When the Crystal River nuclear reactor is operating.

Source: Progress Energy

If Crystal River nuclear power plant never comes back online, what happens to your electric bill? 06/15/11 [Last modified: Thursday, June 16, 2011 11:16am]
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