Make us your home page
Instagram

Judge: Duke Energy is off the hook for $352 million for canceled Levy County nuke plant

A judge has ruled that Duke Energy doesn't have to pay $352 million to Westinghouse in connection with the shuttered Levy County nuclear plant. Cherie Diez | Times

A judge has ruled that Duke Energy doesn't have to pay $352 million to Westinghouse in connection with the shuttered Levy County nuclear plant. Cherie Diez | Times

This is one enormous bill that Duke Energy Florida customers won't have to cover.

A federal judge in North Carolina ruled last week that the Florida utility does not owe the Westinghouse Electric Co. $352 million for disputed costs associated with the 2013 cancellation of a Levy County nuclear power plant.

But federal Judge Max O. Cogburn Jr. said in a 29-page order that Duke is contractually obligated to pay Westinghouse a $30-million termination fee plus $4 million in interest.

The judge's Dec. 22 decision, after a bench trial, is a rare dose of good news for Duke over the controversial Levy project, which Duke inherited when it acquired Progress Energy in 2012. Duke's 1.7 million Florida ratepayers were forced to cover about $1.5 billion of Duke's costs in developing the project.

And the utility had been expected to seek approval from the Florida Public Service Commission to pass on the $352 million bill to its customers had Westinghouse prevailed. It remains unclear if consumers will be asked to cover the $34 million.

Duke in 2014 initially sued Westinghouse, the world's largest builder of nuclear plants, for the $54 million paid for Levy equipment that the utility said the contractor never produced. Westinghouse countersued Duke for $512 million for canceling the Levy contract. That sum was later reduced to $352 million.

Cogburn said in his ruling that Duke was not obligated to pay "full freight" for the development of an advanced reactor, noting the utility had the contractual right to opt out of a consortium of utilities partnered with Westinghouse.

The judge said Westinghouse, prior to the project cancellation, had never billed Duke for the hundreds of millions of dollars Westinghouse would later argue it had accrued.

Westinghouse "never notified Duke or its predecessors that expenses of enormous proportions were being amassed for performance of work necessary" for the project, Cogburn ruled.

J.R. Kelly, the public counsel whose office represents consumers before the Florida Public Service Commission, hailed the ruling.

"This is definitely a win win win for the whole state of Florida, Duke and ratepayers included," Kelly said.

Duke had canceled plans for two Westinghouse reactors, citing projected costs that had ballooned to $24.7 billion and delays obtaining the necessary federal licenses.

"While we are disappointed anytime we have to go to litigation with a vendor, we are pleased with the judge's decision not to award the termination cost claim," Duke spokeswoman Rita Sipe said in a written statement Thursday.

Duke Energy won't close the door entirely on building a nuclear facility in Florida years down the road, noting that the Nuclear Regulatory Commission issued a license for the Levy County site in October,

"We have not made a decision to build the plant, but the ability to add carbon-free, reliable nuclear generation is an important element of our long-term resource planning," Sipe said.

But Duke's nuclear ambitions in Florida have dimmed considerably in recent years.

Duke in February 2013 also announced the permanent closure of its Crystal River nuclear plant in Citrus County after a botched upgrade project led to repair bills that would have reached into the billions. Duke decided it would be more prudent to close the plant and build a natural gas facility.

That will cost customers $1.3 billion over the next 20 years.

Cogburn said in his ruling that the different "negotiating cultures" at Duke and Westinghouse may have needlessly escalated a dispute that otherwise might have ended amicably.

A Westinghouse official told the utility in an August 2013 meeting that the company would claim substantial termination costs should Duke cancel its Westinghouse contract. Duke took that as an affront and sign that Westinghouse was "cooking the bill," Cogburn said.

In fact, the judge said Westinghouse's statement "was more akin to posturing and bluster" common in negotiations, not something more nefarious.

"Rather than cooling off when hard positions were taken," Cogburn wrote, "these parties parted ways rather than stepping back and letting cooler heads prevail."

Contact William R. Levesque at levesque@tampabay.com or (813) 226-3432. Follow @Times_Levesque.

Judge: Duke Energy is off the hook for $352 million for canceled Levy County nuke plant 12/29/16 [Last modified: Thursday, December 29, 2016 5:23pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Allegiant Air strands 200 in Las Vegas, possibly for days

    Airlines

    What happened in Vegas will stay in Vegas — at least until Thursday for about 200 Allegiant Air passengers who were stranded Sunday when their flight to Oklahoma City was canceled.

    About 200 Allegiant Air passengers are stranded in Las Vegas, perhaps for days. Allegiant's headquarters, shown here, is located in the Las Vegas suburb of Summerlin, Nevada.
[JAMES BORCHUCK   |   Times]


  2. Cott Corp. sells beverage manufacturing business for $1.25 billion

    Business

    TAMPA — Cott Corp., a beverage manufacturer with headquarters in Tampa and Toronto, announced Tuesday it is selling its national beverage manufacturing business to Refresco for $1.25 billion.

    Cott Corp CEO Jerry Fowden
[Handout photo]
  3. Duke Energy Florida again ranks last in J.D. Power satisfaction survey

    Business

    ST. PETERSBURG — Another J.D. Power customer satisfaction survey, another last place annual ranking for Duke Energy Florida.

    Duke Energy Florida president. Can he improve the utility's customer satisfaction ratings?
[SCOTT KEELER   |   Times file photo]
  4. Trigaux: Florida's jobless rate looks great — but 25 other state rates look even better

    Economic Development

    No debate here: Florida's unemployment rate continues to drop — even as more people move to Florida and enter the workforce. What's not to like?

    Who remembers the remarkable lines of hundreds of people looking for construction work in Tampa back in March of 2010 at a job fair at the Encore construction site near downtown Tampa? Now the construction industry is struggling to find skilled workers to meet building demand. [
JOHN PENDYGRAFT | TIMES]
  5. Last orca calf born in captivity at a SeaWorld park dies

    Tourism

    ORLANDO — The last killer whale born in captivity under SeaWorld's former orca-breeding program died Monday at the company's San Antonio, Texas, park, SeaWorld said.

    Thet orca Takara helps guide her newborn, Kyara, to the water's surface at SeaWorld San Antonio in San Antonio, Texas, in April. Kyara was the final killer whale born under SeaWorld's former orca-breeding program. The Orlando-based company says 3-month-old Kyara died Monday. [Chris Gotshall/SeaWorld Parks & Entertainment via AP]