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Progress Energy wants to spend up to $1.3 billion to repair nuclear plant

Progress Energy wants to spend $900 million to $1.3 billion to repair its troubled nuclear plant in Crystal River rather than permanently shut it down.

The plant, which has been idle since September 2009, would not be back online until at least 2014, according to a timetable the utility filed late Monday with the state Public Service Commission and Nuclear Regulatory Commission. Progress hedged on the total cost and timing, noting the repair project will depend on "regulatory reviews, ultimate work scope, engineering designs, testing, weather and other developments."

"This would be a major repair, requiring significant cooperation and coordination with state and federal regulators and others," said Vincent Dolan, Progress Energy Florida president and chief executive officer.

"Based on our initial review, our objective is to return the plant to service to ensure that it continues to be a safe, dependable and emission-free resource to meet our customers' energy needs reliably and affordably for many years to come."

The nuclear plant is insured, and Progress Energy said much of the repair costs would be covered.

The utility says it is opting to repair the plant instead of shutting it down because nuclear energy remains one of the least expensive ways to generate electricity. With the plant in operation, Progress says, ratepayers will save $300 million a year in fuel costs.

Progress Energy already has spent about $440 million to repair damage to the plant and to acquire replacement power for the long inactive reactor. A crack was found in the 42-inch thick containment building wall in 2009 while the plant was shut down for a major maintenance project. It has remained inactive ever since.

The utility was set to return the plant to service this spring when workers found a second gap in the containment wall.

If the plant isn't restored until 2014, that adds up to five years offline — long enough that the state's consumer advocate on utility matters says Progress Energy should stop charging ratepayers for the reactor.

"If that asset is not going to be in use, ratepayers should not have to pay for it," said J.R. Kelly, the state public counsel who represents consumers before the Public Service Commission. "When they file their rate case ... we will certainly argue that it should not be in the rate base."

As Progress Energy struggles to fix the troubled nuclear plant, the utility is simultaneously going through a review by the Nuclear Regulatory Commission to renew its operating license for the Crystal River facility, which is set to expire in 2016.

The commission is scheduled to hear public comment on the license renewal during hearings today at the Plantation Inn in Crystal River.

The Crystal River plant is home to Progress Energy's sole nuclear reactor in Florida. The utility is seeking to build a second nuclear plant in Levy County costing at least $17.2 billion, but that project has yet to clear regulatory hurdles. Federal regulators have raised concerns about the nuclear reactor that Progress selected for the project, the Westinghouse AP1000.

Even if the remaining process goes smoothly, the new plant would not go online until at least 2021.

The use of nuclear-generated power has increasingly come under fire following the meltdown of Japan's Fukushima reactors when the country was struck by an earthquake and subsequent tsunami. More recently, a nuclear plant in Nebraska has been threatened by flood waters from the Missouri River.

An alternative to repairing the plant would be to shut it down permanently and decommission it, which would mean reducing the radioactivity at the site to acceptable standards as well as removing equipment and dismantling buildings.

In its report to the Public Service Commission, Progress Energy said it "performed a technical and economic analysis of whether to retire CR3" but chose "the best repair option" over decommissioning the plant.

No nuclear plant in Florida has ever been decommissioned. For years, up until 2002, Progress Energy charged ratepayers to build up a decommissioning fund, which is currently valued at $593 million. That means Progress Energy customers would have to pay for any costs that exceed the $593 million.

If the plant were decommissioned, the utility said it would need to build another major source of power generation to replace it.

Progress Energy also operates four coal plants at Crystal River and, if it were necessary, would likely replace the nuclear reactor with natural gas — a project ratepayers would have to cover.

Critics of Progress Energy say the growing price tag for the idled Crystal River facility is evidence that the company's nuclear strategy doesn't work.

"That's the problem with nuclear," said Bill Newton, executive director of the Florida Consumer Action Network. "You get these gigantic messes. We've been saying, 'nuclear power is very expensive.'"

Ivan Penn can be reached at or (727) 892-2332. Follow him on Twitter at and find the Consumer's Edge on Facebook.


What's next?

. Progress Energy will make its case for repairing its nuclear plant in Crystal River in a July 14 meeting with the Florida Public Service Commission.

. Separately, Progress is holding a pair of public hearings today as it seeks a 20-year renewal for its operating license at the Crystal River nuclear plant, which is due to expire in 2016. Both hearings will be at the Plantation Inn at 9301 W Fort Island Trail in Crystal River, one

is 2-5 p.m. and the other is 7-10 p.m.

Progress Energy wants to spend up to $1.3 billion to repair nuclear plant 06/27/11 [Last modified: Monday, June 27, 2011 11:05pm]
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