Progress Energy says decision on fate of nuke plant still months away

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Trying to unravel questions about costs and potential damage, Progress Energy Florida said Tuesday a decision could still be months away about whether to repair or permanently shut down an idled nuclear power plant at Crystal River, reports Jim Saunders of the News Service of Florida.

Progress officials, in an update to state regulators, said the high-stakes decision could come in December at the earliest — and might not be made until as late as next summer.

The Crystal River plant has been shut down since 2009 because of cracks in a containment building, and Progress, regulators and customer groups have struggled with how to resolve what some describe as an unprecedented situation. A decision about whether to fix or shutter the plant ultimately will be made by the board of Duke Energy, the Florida utility’s parent company.

A settlement agreement earlier this year offered incentives to Progress to start repair work by the end of December, but company attorney John Burnett acknowledged Tuesday that probably will not happen.

“It’s technically possible that construction could commence, but it is unlikely,” he said during a meeting at the Florida Public Service Commission.

The 1970s-era nuclear plant faced an initial shutdown after a containment building was damaged in 2009 during a project to replace a steam generator. In early 20111, as the plant was getting prepared to operate again, additional damage was discovered in a different part of the building.

A key part of the utility’s decision centers on a wide range of cost estimates for repairing the plant.

A recent consultant’s report put the minimum cost at nearly $1.5 billion, but that amount could reach $2.44 billion if Progress determines it is necessary to replace additional amounts of concrete and a dome at the plant. A “worst-case scenario,” which would involve having to replace the additional concrete and dome after other repairs are done, would cost $3.43 billion, according to the report.

Making the cost decisions more complicated is that Progress has not been able to reach agreement with an insurer about covering at least part of the tab. Burnett said the utility is supposed to enter non-binding mediation late this year with the insurer, Nuclear Electric Insurance, Ltd. If that is not successful, the parties would go into binding arbitration.

Jon Moyle, an attorney for the Florida Industrial Power Users Group, said the insurance issues are critical and that resolving what the insurer will pay “continues to be quite elusive.” Moyle’s group, which is made up of large electricity users, often intervenes in utility cases and has been involved publicly and behind the scenes in the Crystal River nuclear issue.

The outcome of the insurance issue could affect how much money Progress customers have to pay for repair work and for what are known as “purchased power” or “replacement fuel” costs. Those costs relate to electricity needed to make up for the lost generation at the idled nuclear plant.

If Progress decides to permanently shut down the plant instead of doing repairs, it could face the prospect of needing to build another type of facility, such as a natural-gas plant, to replace the lost nuclear power.

Progress, the state Office of Public Counsel, the Florida Industrial Power Users Group and other customer organizations reached a settlement agreement early this year that addressed several major utility issues, including the Crystal River repair issue.

That agreement, in part, used the purchased-power and replacement-fuel issue as an incentive for Progress to start repair work by the end of December. It said Progress would not have to forego or refund those types of costs in 2015 and 2016 to customers if the utility started construction this year.

But with repairs unlikely to start soon, the settlement could lead to Progress refunding up to $100 million to customers in the future.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.