1. Business

Trigaux: After long love affair with nuclear power, Duke Energy hints romance is ending

Duke Energy’s love affair with nuclear power appears headed toward divorce. Duke previously shuttered the nuclear plant in Crystal River. [MAURICE RIVENBARK   |   Times (2013)]
Duke Energy’s love affair with nuclear power appears headed toward divorce. Duke previously shuttered the nuclear plant in Crystal River. [MAURICE RIVENBARK | Times (2013)]
Published Oct. 9, 2015

Hard to believe, but the country's biggest power company — the same one that once swore on a stack of fuel rods that nuclear power would always be a big part of how it generates electricity — is finally having second thoughts and, notably, saying so in public.

"Nuclear will continue to be an important part of energy supplies in the Carolinas," Duke Energy CEO Lynn Good said this week in remarks to the Winston-Salem Chamber of Commerce. "But whether or not new nuclear is a part of the picture remains to be seen."

Translation? Duke Energy already owns a bunch of aging nuclear power plants in North Carolina, so they will continue to operate and provide electricity to Duke customers there. But Duke's plans for new nuclear power plants — and Duke had proposed new nuclear in North Carolina, South Carolina and Florida — are fading. Fast.

Plans for new nuclear generation near Raleigh? Off the table. Plans for two brand-new nukes in Levy County in Florida? Shelved. That leaves Duke with one sole remaining nuclear proposal, a plant at its Lee site in Gaffney, S.C. And that deal looks increasingly unlikely to happen. Duke is pursuing the Lee plant just as it did the Levy plant in Florida, spending lots of money (much of it charged to ratepayers) in preliminary work on the planned sites, seeking a federal license, but never officially committing to build the facilities.

Duke even lost ground on nuclear in Florida when it chose to close its only nuclear plant in Crystal River after botched repairs made a fix too expensive, ending the plant's electricity generation many years before the plant was intended to be retired.

This week, CEO Good explained after her chamber remarks that Duke will work to hold on to its current nuclear fleet "for absolutely as long as we can." That means looking at plants slated to retire starting after 2030 to see if their life can be extended another 20 or 40 years, which is a possibility the entire industry is considering for its nuclear assets. Good's chamber comments were covered by Charlotte Business Journal energy reporter John Downey.

Duke, Good said, will have to "look very hard at whether we can replace current nuclear with new nuclear." That's a dramatic difference from 2008 when Jeff Lyash, then the Florida CEO of Progress Energy — which would soon be acquired by Duke Energy — strongly promoted nuclear power in the company's future.

"Our investment in carbon-free nuclear power is an investment in our state's energy future," Lyash, who no longer works for Duke, stated then. But massive cost overruns — the ongoing bane of trying to build complex and horribly expensive nuclear plants — and a dramatic decline in the price of natural gas used to generate electricity have made the nuclear plant option economically absurd.

Let's take a walk in Duke Energy's shoes for a moment. The company is a huge monopoly in service territories across seven states, including west-central Florida. It charges higher electricity rates in Florida than most of its large peers. It is long accustomed to getting its way and arguably is more accomplished at politically bullying and buying state governments — including Tallahassee and its subservient Public Service Commission — than it is in keeping up with changing times. It does not like being told it is out of step and, to be sure, Duke's massive and aging investments in nuclear power and fossil fuel power plants make it hard for the company to appear nimble.

Trying to appease investors as a public corporation currently valued by the stock market at $50 billion is a full-time task. That's a huge reason Duke has been so obsessed in pressing for state laws, as it has long enjoyed in Florida, that permit the power company to shift much of the risk of building nuclear power plants on to ratepayers and away from shareholders.

It's understandable that Duke internally realizes more nuclear plants won't happen, at least given today's nuclear technology, the sky-high construction expense and a growing customer backlash to being so blatantly gouged. Good's remarks this week appear to be Duke's latest way of slowly admitting publicly what it knows privately.

That evolution is also reflected inside Duke Energy Florida. After years of dismissing alternative energy as inefficient and too expensive, Duke now claims it will add up to 500 megawatts of solar power in the Sunshine State by 2024.

Mind the language: Up to 500 MW is not the same as committing to add 500 MW.

Still Duke may want to try harder to become a 21st century utility in action as well as words.

Contact Robert Trigaux at Follow @venturetampabay.


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