Duke Energy is asking the Florida Public Service Commission for permission to issue $1.3 billion worth of a type of securitized bond, which will help reduce charges to consumers for shutting down the mothballed Crystal River nuclear plant.
John Downey of the Charlotte Business Journal reports the request is for a new bond approved by state lawmakers in 2015 for reducing Crystal River costs. The move could save Duke’s Florida customers about $790 million over the next two decades.
The utility filed the application Monday. On Thursday, the PSC announced New York’s Saber Partners will provide a financial evaluation of the request.
Initial estimates for closing down the plant put the cost at $1.4 billion. As a savings measure, Duke sold several of the plant’s assets for about $127 million, the largest of which was $100 million for nuclear fuel.
All of the savings from the bond will go to Florida customers of the Charlotte-based utility, spokesperson Suzanne Grant told Downey.
Duke will not profit corporately or save money from bonds, which are backed by select Duke assets. The state of Florida will hold no stake in or have any liability for the obligations.
Use of these low-interest secrutiziation bonds, commonly known as “rate reduction” bonds, will cost close to $1.8 billion over the 20-year life of the bonds. Duke’s application to the PSC says the 20-year cost under traditional financing could be less than $2.6 billion.
“Think of it as refinancing a house,” Grant explained. “The same term but a lower interest rate.”