Decision on Crystal River nuclear plant repair likely delayed again

Those hoping for an answer by the end of the year on whether the busted Crystal River nuclear plant will be mothballed or repaired will just have to wait some more.

Duke Energy told the state Public Service Commission at a hearing Tuesday that it may not have a decision until summer 2013 because the company continues to evaluate risks of repairing the broken plant and continues to negotiate with the insurance company about its claim.

Under the terms of a previously negotiated agreement, the continued delays in deciding what to do about the plant mean customers will get a $100 million refund if Duke ultimately decides to repair it. The utility agreed earlier this year that it would provide the refund if it decided to fix the plant but did not begin work by Dec. 31.

"It is technically possible that construction could commence" by the end of the year, said John Burnett, a lawyer representing Duke's Florida subsidiary, Progress Energy Florida. "But it is unlikely. … It is very unlikely that construction would begin in December."

The Crystal River nuclear plant has sat idle for three years after a maintenance and upgrade project. During the work, which included replacing old steam generators, the 42-inch-thick concrete reactor containment building cracked. An attempt to repair the crack resulted in more cracks.

Duke estimates that it will cost $1.5 billion to $3.5 billion to repair the broken building, plus $300 million a year for replacement power. Some of Duke's estimates have the plant offline for as long as six years, or the equivalent of $1.8 billion in replacement power costs.

The utility's insurance company, the Nuclear Electric Insurance Ltd., has not paid for damage or the replacement power since spring 2011. It opened its own investigation into what caused the cracks in the building and is scheduled to enter nonbinding negotiations with Duke in the next few weeks.

"The NEIL issue has been the source of some frustration," said Jon Moyle, a lawyer who represents the Florida Industrial Power Users Group in matters before the PSC. "This plant has been offline for some time."

Duke likely would not make a final decision about repairing the plant until after it becomes clear what NEIL will pay toward Crystal River.

If the upcoming nonbinding negotiations fail, Burnett said discussions would move to "binding arbitration." It is unclear when that process would occur.

Ivan Penn can be reached at ipenn@tampabay.com or (727) 892-2332.