1. Business

No rush on nuke plant review

Published Jul. 24, 2012

The nation's new utility titan, Duke Energy, largely blamed the broken Crystal River nuclear plant for troubles in its recent mega merger with Progress Energy.

That was the utility's defense against a barrage of questions during hearings last week in North Carolina. But while regulators in that state have the power to rescind the merger or fine the new combined company, they can't address the Crystal River problems head on. The plant is not in their jurisdiction.

That oversight falls to Florida's Legislature and Public Service Commission. But neither body appears to be in much of a hurry.

They haven't called for hearings or opened independent investigations or demanded many documents, even though the North Carolina hearings confirmed that the Crystal River plant in Citrus County is at the center of the combined utility's problems.

And they have yet to demand more specifics about why Duke Energy officials last week said a "serious situation" arose at Crystal River as recently as mid May, a new revelation Duke officials were not asked to elaborate upon during the North Carolina hearings.

Every delay in resolving Crystal River's nuclear plant troubles adds more costs to customers — as much as $300 million a year just to make up for the lost electricity.

Florida legislative and regulatory leaders appear to be pointing fingers at each other.

"The PSC is monitoring the … merger, and we must let the ongoing investigation proceed," House Speaker Designate Will Weatherford, said in an email through his spokesman.

PSC Chairman Ronald Brisé said to a large degree, the commission's hands are tied.

"Our decisions are bound by the laws set forth by the Florida Legislature," he wrote in a letter responding to questions about what his agency plans to do with the information revealed at the North Carolina hearings. "Ultimately, it is our mission to fulfill the state's interest in encouraging energy diversification while protecting Florida consumers and, in this instance, PEF customers."

The PSC has a previously scheduled "status update" on Crystal River set for Aug. 13. Prior to the status update, the PSC will meet with management of the combined Progress Energy and Duke Energy to discuss agreements the state entered regarding the power plant, according to a July 18 letter from Brisé about the merger.

"Florida Commissioners want to confirm that Duke's vision coincides with the Florida PSC's work on behalf of Progress Energy Florida's (PEF) customers," Brisé wrote.

Progress Energy CEO Bill Johnson had been slated to run the combined company ever since the merger was announced in January 2011. But just hours after the merger was completed earlier this month, Duke's board ousted him in large part because of the way he was handling the broken Crystal River plant and Progress' nuclear fleet in general, according to testimony at the North Carolina hearings. Duke officials complained about a "lack of transparency" regarding Crystal River and the status of negotiations with the insurance company that holds the policy on the power plant.

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North Carolina regulators have sweeping powers. They could even reinstall Johnson as CEO, though that appears unlikely.

The Florida PSC lacks that kind of power. For example, it has no authority over the merger — even though 1.6 million of the utility's customers live in Florida.

Weatherford, the Florida legislator, asked for patience as the details about the merger get sorted out.

"First, and most importantly, the residents of our community need to know that there are no health or safety threats to the area concerning the Progress power plant," Weatherford said. "At this time, there are rumors, innuendo, and conjecture about the merger. It is critical that we separate fact from fiction before considering legislative action."

Arnie Gundersen, a nuclear engineer with Fairewinds Associates and a consultant before utilities commissions, said PSC commissioners and legislators have the power to call hearings and challenge utility executives on their decisions, but they don't often push very hard if at all.

By shifting responsibility to the Florida PSC, legislators can effectively ignore the issues and mitigate the fallout from voters and the utilities, Gundersen said.

"My experience is the PSC in Florida is so co-opted that they aren't going to do anything, either," he said.

The Crystal River reactor went offline in September 2009 for a maintenance and upgrade project that included replacing old steam generators. During the project, the reactor's 42-inch thick concrete containment building cracked. Progress' attempt to repair the crack led to two more cracks. Repairs and related costs are now expected to reach as much as $3 billion.

"Crystal River has been on life support for two years," Gundersen said. "It's time for someone to declare it brain dead and pull the plug."

Ivan Penn can be reached at or (727) 892-332.