For years, Progress Energy has insisted it was in its customers' financial interest that the company repair a gap in the reactor containment wall at its offline Crystal River nuclear plant. New revelations about the company's efforts to save $15 million by performing the repairs itself raise more questions about whether that was a reasonable decision. The utility's misjudgments are resulting in repair costs that will reach at least $2.5 billion, and utility customers could be billed for about a quarter of that. The Florida Public Service Commission should thoroughly examine the situation at Crystal River and ensure that Progress Energy and its insurance carrier — not consumers — cover all repair or replacement costs. Regulators also should consider whether it would be more cost-effective to close the plant.
The nuclear plant has been offline for two years, and it won't generate power for at least another two. For a utility with 1.6 million customers in Florida, the proposed $15 million in savings was modest. As the St. Petersburg Times' Ivan Penn reported this month, Progress Energy in 2009 rejected bids from the only two companies with experience in performing the repairs Crystal River needed.
Public records filed with the Nuclear Regulatory Commission and the PSC, and depositions conducted by the Florida Office of Public Counsel, show that in-house staff thought they had the expertise to properly handle cutting into the reactor containment wall — something no other nuclear plant had attempted. They were spectacularly wrong.
Earlier this year, as Progress Energy thought repairs were nearly complete, a second gap likely caused by the repairs was discovered. But after raising the possibility that the plant could be closed, the utility now insists that the nuclear plant should be repaired and returned to service to avoid the cost of building a replacement natural gas plant. Progress Energy also is anxious that its problems in Citrus County do not cloud its efforts to build a nuclear plant in Levy County. It is asking the PSC to deem its decision reasonable so it can charge customers a share of the bigger repair bill.
Consumers are already footing part of the bill. The PSC allowed Progress Energy to assess customers $112 million for the cost of replacement fuel through last year that wasn't covered by insurance. But that decision was before the second gap was discovered and the repair process was called into question.
The PSC should hold Progress Energy accountable for the financial consequences of its risky decision to forgo hiring an outside repair firm. Progress Energy and its insurance company should pay for such serious errors in judgment, not consumers.
The latest revelations and potential repair estimates also should trigger a full reconsideration of options for Crystal River and the short- and long-term financial impact on customers. Will it be more cost-effective for consumers to restore the Crystal River nuclear plant to safe operation, or to decommission it and replace the power with a combination of other technologies? The PSC should demand that Progress Energy make a convincing case to repair the plant and force customers to pay part of the cost. So far, that case is unconvincing.