It will be at least December before Crystal River 3 fate decided

An official with Progress Energy Florida (PEF) said Oct. 30 that it will be at least December, and maybe even summer 2013, before PEF and its Duke Energy (NYSE: DUK) corporate parent decide whether to repair or retire the Crystal River 3 nuclear plant in Florida.

The Florida Public Service Commission conducted a status conference on the 860-MW nuclear reactor that has been idle since the fall of 2009.

PEF General Counsel John Burnett said it is conceivable that the company might take until summer 2013 to make a decision – if the engineering scope of repair work proves more elaborate than currently expected.

The time between December 2012 and summer 2013 represent the “middle” scenario for making the decision on the future of the plant, Burnett said.

Duke Energy Senior Vice President Nuclear Engineering Garry Miller said he was leading a “technical review” of a report by the Zapata firm on potential repair of the nuclear plant. Completion of the technical report is targeted for mid-November, Miller said.

The recently-made-public Zapata report indicated that repairing the plant will likely cost in the neighborhood of $1.55bn. The “worst-case scenario,” if the scope of work is increased – including replacement of the “dome” – could put the expense at an estimated $3.43bn.

Officials said the power company’s decision-making process has been slowed by several “moving parts.” The most significant of those is upcoming non-binding arbitration between the plant operator and its insurer, Nuclear Electric Insurance Limited (NEIL). Burnett said depositions have been taken in advance of the non-binding arbitration and that binding arbitration could occur if the insurance question is not resolved in the non-binding talks.

Some depositions have been taken in advance of the non-binding arbitration. Company officials said they are aggressively pursuing the Crystal River claims with NEIL.

Duke Energy CEO Jim Rogers has said that the level of any possible insurance reimbursement will have much to do with the company’s ultimate decision on whether to repair the nuclear plant or replace it with another source of power generation.

PEF has been running more natural gas-fueled generation and more purchased power since the nuclear plant has been out-of-service, a company spokesperson said.

A settlement between the company and several intervening groups in the Crystal River nuclear case provides that ratepayers can get a rebate of fuel costs if the plant owners fail to commence repairs by the end of 2012. While technically possible, it is very unlikely that the Duke subsidiary can start repairs by year’s end.

In fall 2009, during a maintenance and upgrade project, a crack occurred in the concrete containment building that surrounds Crystal River’s nuclear reactor. The plant has been out of service since then.

In 2009 the facility was owned by Raleigh, N.C.-based Progress Energy. Progress Energy merged with Charlotte-based Duke Energy in July.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.