In its latest evaluation of Duke Energy, the Fitch rating agency concludes this week that the utility probably will permanently close the crippled Crystal River nuclear plant.
In giving Duke a "stable" outlook, Fitch noted that a repair of the Crystal River plant would pose too much of burden on Duke but shutting it down would guarantee some protections provided by a settlement agreement with the state.
"Fitch believes it is unlikely management will elect to repair Crystal River 3 given the rising cost estimates, construction risks and low gas-price environment, and instead will pursue the retirement option and recovery of invested capital," the rating agency stated.
The Crystal River plant went offline in fall 2009 for a maintenance and upgrade project to replace old steam generators. During the project, workers found a crack in the 42-inch thick reactor containment building. An attempt to repair the crack and bring it back online led to more cracks.
A Duke report says it will cost $1.5 to $3.4 billion to repair the containment building plus $300 million a year to buy replacement power while the plant sits idle. Duke's board has yet to make a decision whether to repair or retire the plant.