The Florida Public Service Commission (PSC) voted Oct. 17 to address certain Duke Energy (NYSE:DUK) rate issues – including terminating plans for the Levy County nuclear plant and capping the costs Duke can recover for the retired Crystal River 3 (CR3) nuclear plant.
In a four to one vote, the PSC approved a “Revised and Restated Settlement Agreement” for Duke Energy Florida (DEF). The action maintains customer base rates through 2018, terminates plans for Levy County and promotes community growth through economic development tariffs.
Commissioner Eduardo Balbis voted against the decision. “We have another viable option that is already in place,” Balbis said in a PSC statement. “Additionally, there are several critical unanswered questions that warrant additional review,” he added.
While the revised agreement supersedes DEF’s current agreement, approved last year, customer refunds contained in the 2012 agreement remain, including $129m this year, $139m in 2014, $50m in 2015, and $70m in 2016. Customers will also receive a total refund of $835m from insurance proceeds for DEF’s retired Crystal River 3 (CR3) nuclear plant by the end of 2014.
When an asset (such as a plant) is retired, the company has a right, by law, to recover the remaining costs from its customers. Under the revised Agreement, recoverable costs for CR3 will be capped at $1.4bn, with the company’s stockholders covering the first $295m and long repayment schedules also lowering costs to customers.
DEF will continue to collect fixed amounts, with no incremental bill impact, for costs associated with its discontinued Levy plant until approximately 2017.
Parties to the revised agreement, filed with the Commission on Aug. 1, include DEF, the Office of Public Counsel, White Springs Agriculture Chemicals, Inc., Florida Industrial Power Users Group, and Florida Retail Federation.
Duke announced in June that it would retire the 860-MW Crystal River 3 in Citrus County, Fla., and could replace its output with more natural gas generation. The plant has been shut down and offline since late 2009,
Duke is currently seeking more than 1,600 MW of generating capacity for its Florida market.
For now at least, Duke is shelving plans for building more than 2,000 MW of nuclear capacity in Levy County. Duke had once hoped to bring the Levy County units online in 2024 and 2025.
Duke said in August that it was cancelling plans for the Levy County project, although it will continue to pursue a license from the Nuclear Regulatory Commission. Duke filed its Levy County application with NRC in June of 2008.