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Progress Energy raises price tag, delays start date of Levy nuclear plant

Progress Energy announced Tuesday that it had raised the price tag of a nuclear plant that may never get built, and said it wants customers to pay more for an existing reactor that may never restart.

The cost of the proposed Levy County nuclear plant could reach as high as $24 billion, up from the last estimate of $22.4 billion. And the utility said it would delay when the plant comes online from 2021 to 2024 — eight years after its original projected date of 2016.

Progress' 1.6 million Florida customers already are paying $1.1 billion toward the Levy project, though the utility has not made a final decision whether to build the plant. The U.S. Nuclear Regulatory Commission must first approve its license, a process that is not expected to be completed until sometime before 2014. Progress says it will then decide whether to proceed with the project.

Critics of the Levy nuclear plant say Progress' announcement signals that it is becoming more likely that the Levy project will never get built, even if the license is approved.

Susan Glickman of the Southern Alliance for Clean Energy, which opposes the Levy project and pushes for alternative energy, said someone needs to put an end to what appears to be an unbridled spending of customers' money by Florida utilities.

"We need a hall monitor to say this doesn't make sense," Glickman said, "whether it's the speaker of the (Florida) House, the president of the Senate or the governor."

Progress announced the changes to the cost and schedule for the proposed Levy project in a statement Tuesday about its plans for nuclear power in Florida.

In addition to the changes to the Levy project, Progress wants the state to approve an increase in the amount it collects from its customers for its Crystal River nuclear plant, which has been offline since October 2009.

During an upgrade and maintenance project, the 42-inch-thick concrete containment building cracked. The utility has struggled to repair its only existing nuclear plant in Florida ever since.

Progress wants the state Public Service Commission to approve $49 million for expenses related to attempting to increase the amount of power the Crystal River nuclear plant produces. None of that money is related to repairing the plant.

If approved, that $49 million would reduce the benefit of a $288 million refund Progress agreed to pay customers as part of a settlement over the broken Crystal River plant. The PSC's staff expected such a request — only a bit higher.

It is still too early to know exactly what rates will be for next year. Based on Progress' request, customers could see their bills increase from $123.19 per 1,000 kilowatts of usage to about $127.68, subject to adjustments for fuel costs. That's significantly more than what is charged by the two other major Florida utilities: Florida Power & Light, $94.62 per 1,000 kilowatt hours, and Tampa Electric at $106.90.

Progress insists that it plans to bring the Crystal River nuclear plant back online and build the Levy project, despite critics who say completing either project is becoming increasingly unlikely because of cost and the burden they are placing on customers to pay for it all.

For example, early estimates in 2006 indicated the Levy project would cost $4 billion to $6 billion with start-up in 2016. The cost changed in 2007 to $10 billion and in 2008 to $17 billion. In 2011 it reached $22.4 billion with start-up in 2021.

Now it's up to $24 billion with it going online in 2024 for the first of the two reactors and the second 18 months later.

"Nuclear power remains a key component of Progress Energy's balanced solution strategy to meet our customers' future energy needs with efficient, carbon-free electricity," Vincent Dolan, president and chief executive officer of Progress Energy Florida, said in Tuesday's announcement.

The PSC is expected to review Progress' filing during its annual Nuclear Cost Recovery Clause in August.

Charles Rehwinkel, deputy state public counsel, who represents consumers before the PSC, said efforts to stop charges related to the Levy project have been rebuffed by the commissioners. Rehwinkel argued to the PSC last summer that the plant would not come online until well after 2021, but commissioners ignored him.

The requested Crystal River charges, Rehwinkel said, are more difficult to counter because state law allows Progress to recover such expenses.

"The costs that Progress is including for (Crystal River) are costs the statute appears to authorize," Rehwinkel said. "On one hand, though, it appears that customers are being asked to pay for a plant that's not running."

Arnie Gundersen, a nuclear engineer who testifies before state public service commissions about nuclear plants, said Progress' plan makes "no economic sense."

"The amount is so freaking huge that having a license really isn't going to matter," Gundersen said. "It's breathtaking."

Ivan Penn can be reached at ipenn@tampabay.com or (727) 892-2332.

Progress Energy raises price tag, delays start date of Levy nuclear plant 05/01/12 [Last modified: Saturday, July 21, 2012 10:38am]
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