Make us your home page

Many unanswered questions in Crystal River nuclear plant settlement

It's impossible to know exactly how much a recent settlement over the damaged Crystal River nuclear plant will affect Progress Energy Florida customers' rates.

Too many questions remain unanswered:

Will Progress repair the broken plant or shut it down? Will insurance pick up the repair bill or will customers and investors have to pay? Will the utility's proposed Levy County plant ever be built or will the company pursue another power source?

The settlement agreement announced last week came out of a case before the state Public Service Commission over Progress Energy's botched handling of a steam generator replacement project at the nuclear plant in Citrus County. The result was three cracks in the reactor's concrete containment building, which has kept the plant offline since fall 2009.

One thing is certain. In five years, after the settlement's initial agreements end, Progress' 1.6 million Florida customers can expect their bills to jump.

"They're kicking the can down the road," Arnie Gundersen, a nuclear engineer and consultant before state public utility commissions, said of the agreement. "There's no doubt about it."

When will customer rates increase?

Beginning Jan. 1, 2013, bills are expected to increase by about $4.93 from $123.19 per 1,000 kilowatts of usage to about $128.12. That is a smaller increase than was projected before the settlement, which required Progress to refund $288 million.

Are customers obligated to pay any more costs related to the plant's repairs?

Yes. About $380 million in costs related to buying electricity from other sources after the plant went down.

Could customers get another refund?

Yes. An additional $100 million if Progress decides to repair the Crystal River nuclear plant but does not start work before the end of 2012.

What other benefits did customers get related to the Crystal River plant?

Progress generally will not be allowed any rate increase until 2017, unless there is a significant increase in costs for things like fuel, energy conservation or environmental protection.

Any cost overruns beyond repair expenses paid for by the insurance company will be split between customers and Progress' investors up to the first $400 million. Additional amounts would require Public Service Commission approval.

Progress also agreed to freeze advance payments for the proposed $20 billion Levy County nuclear plant at $3.45 a month for five years from 2013 to the end of 2017. Progress had projected that the fee for the Levy plant — scheduled to open in two phases beginning in 2021 — would go as high as $26.05 in 2017, unless the utility found investors to become co-owners.

What happens when the rate freezes expire?

Progress could recoup costs related to the Crystal River plant, if it gets repaired. Customers could also start paying much larger payments toward building the Levy County nuclear plant, if it is still in the works. Or they could be on the hook for costs related to building other power sources, like natural gas plants.

Has Progress definitely decided to repair the Crystal River nuclear plant?

No. Progress continues to analyze cost, engineering options and insurance coverage. Answers are not expected for at least a couple of months, Progress president and chief executive officer Bill Johnson said in a conference call with analysts Monday.

How much are the repairs projected to cost and has insurance said whether the damage is covered?

Progress initially told investors last year that repair costs and alternative electricity since the plant's initial construction accident range from $2.5 billion to $2.9 billion. The utility has said it believes insurance will cover at least three quarters of the total.

The insurer, the Nuclear Electric Insurance Limited, has paid $298 million but stopped making payments last year. NEIL is reviewing the claim to determine whether it is covered. "This is a big, complex, complicated claim that NEIL has not seen the likes of before," Johnson said Monday.

If NEIL doesn't pay, are customers on the hook?

Yes, one way or another, customers would have to cover some of the costs, whether by helping to pay for repairs or to build another power source.

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

Many unanswered questions in Crystal River nuclear plant settlement 01/23/12 [Last modified: Wednesday, July 25, 2012 2:24pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Tampa Bay's Top 100 Workplaces deadline extended to Nov. 17


    Think you work at one of the best places in Tampa Bay? You've got a little more time to make a pitch.

    Penny Hoarder and Gregory, Sharer & Stuart were among those at an event in Tampa last May honoring winners of the Tampa Bay Times Top Workplaces awards. Nominations are now open for this year.  
[OCTAVIO JONES   |   Times]
  2. Tampa-based Checkers testing delivery, aims for record expansion


    TAMPA — Tampa-based Checkers Drive-In Restaurants continues to fly under the radar compared to dominant burger chains like McDonald's and Burger King.

    Checkers Franchisee Shaji Joseph, of Tampa, hoses down the front walkway of his store at 6401 Park Boulevard, Pinellas Park. The business has a new look including signage and exterior tile. One drive through has been eliminated for an outdoor dining area, right. Joseph owns nine Checkers and is planning to open his tenth in Tampa.
[SCOTT KEELER   |   Times ]
  3. City Council approves $5 million for Clearwater Marine Aquarium expansion


    CLEARWATER — The City Council on Thursday approved contributing $5 million to the Clearwater Marine Aquarium for its massive expansion project.

    Clearwater has agreed to contributed $5 million to the Clearwater Marine Aquarium 
's $66 million expansion project.. [ Clearwater Marine Aquarium] 

  4. Trigaux: Florida, Tampa Bay lagging in growth of their startups

    Economic Development

    The annual assessment of how entrepreneurs are doing across the country is out from the Kauffman Foundation — among the best watchers of the nation's startup scene. How do Florida and Tampa Bay fare?

    Lured by financial incentives, startup GeniusCentral relocated from Manatee County in 2015 to St. Petersburg, promising to creatye 40 new jobs. It took downtown space in an appropriately creative workpace for entrepreneurs. It did not last there, later moving back to less expensive space in Manatee. A new Kauffman Index report on entrepreneurship found that Florida is a good place to launch startups but a tougher place to grow them.
  5. Pleasant dreams: sleep travel site gives high marks to Tampa airport


    TAMPA — Traveling might be considered closer to a nightmare than a dream for many. But that might be different for those who travel through Tampa International Airport. It was ranked the No. 3 overall best airport in North America by Sleeping in Airports, a travel site that tracks the best airports to catch some …

    Tampa International Airport was ranked as the No. 3 best overall airport by travel site Sleeping in Airports. | [Times file photo]