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Staff: Duke Energy should begin Crystal River plant demolition

Staff recommended that regulators accept Duke Energy Florida's speedy decommissioning plan.

State regulators will decide Tuesday whether Duke Energy Florida can move ahead with plans to decommission its Crystal River nuclear plant early. But if regulators accept their staff’s recommendation, the utility company won’t need to include extra protections for customers.

Last year, Duke Energy asked the Florida Public Service Commission to dismantle its shuttered nuclear plant by 2027, about 50 years sooner than scheduled. It would achieve this by locking in a price with a contractor for half as much as projected. But consumer advocates said there weren’t enough measures in place to protect customers from paying even more for the process.

“The transaction is in (Duke Energy Florida)‘s customers’ best interest,” the staff recommendation said. “The (proposed protections) are unnecessary and may prevent the deal from closing.”

Related: Duke Energy’s Crystal River deal needs more customer protections, advocates say

Should commissioners approve the deal, the utility company will pay Accelerated Decommissioning Partners $540 million to tear down the nuclear portion of the plant. Duke Energy’s predecessor, Progress Energy, tried a do-it-yourself repair on the building where the reactor was kept, cracking the 42-inch-thick walls.

The decommissioning funds come from a trust that Duke Energy customers contributed to between 1977 and 2001, totaling $660 million. Much of it would be distributed to the contractor over the first five years.

For this reason, the Office of Public Counsel and the Florida Industrial Power Users Group asked the commission for more protections for consumers. If the contractor didn’t finish the job or needed additional funds to complete it, customers could be on the hook down the line.

To get an early warning if anything goes wrong, they asked regulators to require monthly progress reports, as opposed to annual reports, and to implement an independent party to monitor the progress. The Office of Public Counsel also asked the commission to release about $100 million back to customers from funds that likely won’t be used in the process.

All of those protections would be denied if the staff recommendation is accepted. NorthStar Group Services, Accelerated Decommissioning’s parent company, said the conditions would cause the deal to be renegotiated. Accelerated Decommissioning and Duke Energy agreed.

“There’s not a whole lot of consideration of what is in the best interest of the customers,” Charles Rehwinkel, lawyer with the Office of Public Counsel, said.

The commission will vote on the issue Tuesday.