Rating agency thinks nuclear plant will be closed

In its latest evaluation of Duke Energy, the Fitch rating agency concludes this week that the utility probably will permanently close the crippled Crystal River nuclear plant.

In giving Duke a "stable" outlook, Fitch noted that a repair of the Crystal River plant would pose too much of burden on Duke but shutting it down would guarantee some protections provided by a settlement agreement with the state.

"Fitch believes it is unlikely management will elect to repair Crystal River 3 given the rising cost estimates, construction risks and low gas-price environment, and instead will pursue the retirement option and recovery of invested capital," the rating agency stated.

The Crystal River plant went offline in fall 2009 for a maintenance and upgrade project to replace old steam generators. During the project, workers found a crack in the 42-inch thick reactor containment building. An attempt to repair the crack and bring it back online led to more cracks.

A Duke report says it will cost $1.5 to $3.4 billion to repair the containment building plus $300 million a year to buy replacement power while the plant sits idle. Duke's board has yet to make a decision whether to repair or retire the plant.