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No agreement yet over who pays for Crystal River nuclear plant repairs

After their first two mediation sessions, Progress Energy Florida and its insurance company still could not reach a settlement over the crippled Crystal River nuclear plant.

The parties continue to negotiate but a final decision about the future of the nuclear plant may not come until summer.

John Burnett, a lawyer for Progress Energy Florida and its parent company, Duke Energy, told a state Public Service Commission hearing Monday that the utility and insurance company continue to seek a resolution of the Crystal River claim.

"As we sit hear today, we've had two mediations," Burnett said. "The mediator has not declared any impasse yet, neither have the parties."

Last summer, Progress told utility regulators and shareholders that the utility had set "nonbinding" insurance claim negotiations for the fourth quarter of 2012.

If those talks failed, the utility and the insurance company, known as NEIL, would then move to a formal, binding arbitration that would likely take place this spring.

Progress wants NEIL to pick up most of the tab for repairs to the Crystal River plant, which has been idle since a botched maintenance and upgrade project crippled the plant in fall 2009.

The utility says it will take at least 33 months to repair the plant, if and when work begins, and cost at least $1.5 billion to fix.

The repair cost is in addition to $300 million a year needed for replacement power while the plant remains offline.

Depending on the repair the utility pursues, the bill to fix the broken plant could reach $3.5 billion plus replacement power costs and take eight years to complete.

"It should be obvious that this is an important issue," said Public Service Commissioner Eduardo Balbis. "It is something this commission is watching closely."

Burnett said investigative teams from the utility are finalizing their reports so the company can make its decision whether to repair the 37-year-old nuclear plant or permanently close it.

Crystal River's federal operating license expires in 2016. Progress has applied for a 20-year extension, but years of the additional time could be lost to repair work.

The Nuclear Regulatory Commission, which issues the operating license, must approve any repair plan before extending the license.

The longer it takes for the utility to make a decision about the plant, the more it is costing the company's shareholders and customers.

A settlement agreement Progress reached with the state last year requires the utility to refund customers $100 million if it did not begin repairs by Dec. 31, 2012, and return the plant to service by 2016.

The $100 million is in addition to $288 million the utility agreed to refund customers for replacement power because of the outage. But the replacement power bill continues to grow along with other repair related costs.

"We're kind of watching the clock," said Charles Rehwinkel, deputy public counsel, who represents consumers before the Public Service Commission.

"I think the sooner a decision is made," Rehwinkel said in an interview, "the better."

Ivan Penn can be reached at or (727) 892-2332.

No agreement yet over who pays for Crystal River nuclear plant repairs 01/07/13 [Last modified: Monday, January 7, 2013 8:53pm]
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