Repair costs rise at Crystal River nuclear plant

Duke Energy is considering its options for repairing the cracks in the 42-inch concrete reactor containment building at the Crystal River nuclear plant.
Duke Energy is considering its options for repairing the cracks in the 42-inch concrete reactor containment building at the Crystal River nuclear plant.
Published Aug. 3, 2012

The cost to fix the broken Crystal River nuclear plant appears to be on the rise.

The previous top estimate of $1.3 billion is likely too low, Duke Energy CEO Jim Rogers confirmed in an interview Thursday.

The utility has not decided whether to repair or permanently shut down the plant. An independent technical evaluation commissioned on the facility by Duke's board is expected to be complete in about a month, Rogers said.

"The cost estimate is trending higher," Rogers said. "The repair plan appears to be technically feasible but issues remain."

Florida sits at the top of Rogers' priority list now that the merger between Duke and Progress Energy is complete. The broken Crystal River plant and a proposed plant in Levy County are multi-billion dollar issues for Rogers. Both are complex, and Rogers said in a telephone interview with the Tampa Bay Times that he's giving them careful consideration.

Crystal River is first.

The nuclear plant in Citrus County went off line in September 2009 for maintenance and upgrades. During the project, the plant's 42-inch thick concrete containment building cracked. A half-billion dollar repair resulted in more cracks.

Repairing the new cracks was estimated to cost another $900 million to $1.3 billion, plus more than $1 billion for replacement power. Both the repair and replacement power costs continue to rise.

Lynn Good, Duke executive vice president and chief financial officer, said the initial repair costs for Crystal River were developed in 2011, before engineers completed any significant analysis. She said no new costs estimates were available yet.

Crystal River's insurer, the Nuclear Electric Insurance Limited, has only made a partial payment on the initial crack. NEIL opened its own investigation of the damage last year and is no longer voluntarily paying any claims on the plant. Rogers said during Thursday's interview that the utility is set to meet with NEIL during the fourth quarter of this year in "non-binding mediation" over payment for damages to the plant.

Mark Cooper, senior fellow at the Institute for Energy and the Environment at Vermont Law School, said the growing tab on the Crystal River repair signals more cost for customers and the likelihood the plant will not return to service.

"Every day you don't reach a resolution is money out of the consumer's pocket," Cooper said. "Given slack demand, given the incredible cost of fixing it, the sooner you pull the plug, the better." But shutting down Crystal River isn't an easy calculation.

Duke's subsidiary, Progress Energy Florida, relies on natural gas plants to produce electricity. Crystal River is the utility's only nuclear plant in Florida.

"We definitely do not have the diversity we enjoy in other parts of the country," Rogers said.

Rogers could look toward the proposed Levy County nuclear project as an alternative. But that, too, isn't an easy decision.

Estimates project Levy to cost as much as $24 billion to build the two-reactor plant, which would make it the most expensive in history. Duke also has two other proposed nuclear projects in the Carolinas.

Whether to move forward with Levy will depend on such factors as customer demand, cost and energy diversity, Rogers said.

"I think the issue with Levy is really an issue of timing going forward," Rogers said. "Growth in sales have been anemic. There are a lot of key factors that we need to consider."

Whether to build any of the three new nuclear projects, Rogers said, will depend on the needs of the communities where they would produce power.

"All are in play," Rogers said. "We have greater diversity in the Carolinas, so that's not as much of a driving force. The future price of gas plays a role here as well."

Rogers said he sees any of Duke's new nuclear plants coming online in the 2020s, about a decade before existing plants shut down. For Florida, that could mean a period with no nuclear plants.

But Cooper and others who favor alternatives to nuclear say there are options to fill the void that would be left if the utility had no reactors in Florida.

"You diversify with efficiency and renewables," Cooper said. "You don't diversify with the nuclear stuff, which makes problems. That's a serious thing to think about."

Rogers will appear before the Florida Public Service Commission Aug. 13, where he is expected to talk about how the Progress and Duke merger will affect Florida consumers.