Just over 1,240 days ago, in December 2006, Progress Energy Florida chief Jeff Lyash first visited the St. Petersburg Times to unveil plans for a nuclear power plant in Levy County and to utter these words:
"It's important to have a new nuclear plant in Florida."
Lyash, since promoted, said those words when the plant's original price tag stood at about $6 billion, and when the Levy plant was to begin operating in 2016.
Since then, the price tag on the Levy facility has steadily ballooned. Last week in regulatory filings, Progress Energy said the nuke plant may cost as much as $22.5 billion and be delayed until 2021.
"Slowing the work on the Levy project lowers the near-term price impact," explained Bill Johnson, CEO of parent company Progress Energy in Raleigh, N.C.
Slowing the work also buys Progress Energy more time to decide if it wants to pursue this project. The company insists yes, but says so with a lot less gusto.
Let's put the latest $22.5 billion price tag for the Levy County nuke plant in easier-to-grasp terms. The estimated cost has increased by roughly $13 million every single day since it was unveiled in December 2006. Pretty soon we'll be talking about serious money. Especially since much of those increases will be borne by Progress Energy Florida customers in the form of higher electricity rates.
Which raises a question:
At what price does a new nuke power plant become prohibitive to the Floridians it claims to serve?
Is a $10 billion or $20 billion or $30 billion plant okay? I'm pretty sure that between now and 2021, the current $22.5 billion estimate will go much higher.
In the 1970s — the last decade when we actively built nuclear power plants — the average cost overrun for a nuke plant approached 300 percent. If only the pace of escalating costs for new nukes were so reasonable.
In its infinite wisdom, the Legislature passed a measure to allow power companies like Progress Energy to raise electricity rates now to help fund the ongoing costs of building future nuke plants. That idea did not sit well with customers during Florida's severe recession. Progress Energy just readjusted its rate strategy.
Still, if covering the initial $6 billion price tag for a nuke plant seemed daunting, how on earth will Floridians ante up to cover $22.5 billion?
The market value of Progress Energy itself is just over $11 billion. So here is a company talking about spending twice that sum on one nuke facility in Florida.
Let's go out on a limb and suggest this scenario is not going to work. Somebody needs to come up with an alternative plan to revive (and finance) the next generation of nuclear power in America if such startling cost overruns and delays are common.
None of this is to contest Jeff Lyash's gung-ho remark in 2006. We probably could use new nuclear power plants in Florida, given a few million more residents coming this way, all expecting lights, air conditioning and cable TV.
But we don't need nukes with runaway price tags. It's time to rethink this project.
Contact Robert Trigaux at email@example.com.