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Progress Energy defends failed Crystal River nuclear plant project in letter to state legislators

Progress Energy moved last week to calm growing concern about its idled Crystal River nuclear plant, telling state lawmakers the problems that shut down the reactor two years ago "could neither have been predicted nor prevented."

In a three-page letter to legislators, Vincent Dolan, president and CEO of Progress Energy Florida, criticized what he called "unsubstantiated claims, allegations and misinformation" about the utility's failed approach to replacing old steam generators at the plant and its subsequent repair strategies.

"While some would have you believe that we took an inappropriate approach to this work, nothing could be further from the truth," Dolan stated in the Nov. 16 letter. "Outside experts have been engaged since day one. … We have been prudent in our actions and decision making."

Dolan's letter comes as members of the state Public Service Commission are set to vote Tuesday on the fuel rate Progress will charge customers for 2012. During the meeting, the PSC will decide whether the rate will include $140 million the utility wants to charge customers for the purchase of alternative power next year while the nuclear plant continues to sit idle.

The letter also comes after the St. Petersburg Times has chronicled over the past few months many of the problems at the plant. And earlier this month, state Sen. Mike Fasano, R-New Port Richey, requested that Progress come before the Senate's Communications, Energy and Public Utilities Committee to answer questions about what went wrong at the plant.

"Progress Energy has an absolute responsibility to be honest and transparent," said Fasano, who received Dolan's letter. "Instead of letters, the easy road to take would have been to come before the Senate. … It should be done in public."

Sen. Andy Gardiner, R-Orlando, the Senate's majority leader and the chairman of the energy committee, is considering Fasano's request.

Documents filed with state and federal regulators show Progress Energy took several unusual steps in its approach to the steam generator replacement project, including eschewing the two companies that had managed all of the other similar projects in the country.

Progress Energy hired an analyst to review what caused the first crack at the plant. That "independent analysis," Dolan said in his letter, concluded that the crack would have happened to anyone working the project and the U.S. Nuclear Regulatory Commission "after months of inspection, agreed."

In an interview Saturday, NRC spokesman Roger Hannah said the agency examined Progress' analysis of the first crack in October 2010, about a year after the crack occurred. He said based on the information available from Progress Energy at that time, the NRC found that Progress' "investigation was thorough and supported their conclusion" that it could not have been prevented.

"We did not evaluate their decision from a business or financial standpoint," Hannah said.

The NRC is not doing any further review of what went wrong, Hannah said. The agency, instead, is focused on making sure that any repairs leave the reactor in safe operating condition, he said.

Progress wants its 1.6 million Florida customers to pay $670 million, or a quarter, of the $2.5 billion to repair the plant.

For that to happen, Progress will have to convince the Public Service Commission at a hearing scheduled for June that it acted in a reasonable and prudent manner in removing the steam generators.

Consumer advocates, led by the state Office of Public Counsel, say that it was Progress' missteps in handling the project that shows the utility was not reasonable in its actions, potentially costing customers hundreds of millions of dollars. Customers should not be responsible for paying any of the costs related to the repairs, they say.

"This is a complex issue in a complex industry, and not one that can be sufficiently addressed through the media or other unconventional means. Those who follow these proceedings will see that we have been prudent in our actions and decision making throughout this process."

Vincent Dolan, president and CEO of Progress Energy Florida

Progress Energy defends failed Crystal River nuclear plant project in letter to state legislators 11/19/11 [Last modified: Saturday, November 19, 2011 11:06pm]
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