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Pasco Tribune

Florida Progress' nuclear plant in Crystal River to close

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Published:   |   Updated: March 7, 2013 at 04:08 PM
TAMPA -

Progress Energy Florida will permanently shut its damaged nuclear reactor in Crystal River, capping a very public and costly embarrassment that played out over the past three years.

Progress Energy, a subsidiary of Charlotte, N.C.-based Duke Energy, said Tuesday that it will begin decommissioning the Crystal River reactor instead of making repairs, which could have cost billions.

It chose a slow decommissioning process that essentially places the reactor in long-term storage over 40 to 60 years, instead of the costlier process of dismantling portions of the plant and moving them elsewhere.

"We believe the decision to retire the nuclear plant is in the best overall interests of our customers, investors, the state of Florida and our company," Duke Energy Chairman and Chief Executive Jim Rogers said in a statement.

Progress Energy Florida provides electricity to more than 1.6 million Florida customers in Pinellas County and in an area surrounding Orlando.

The company has about $600 million set aside for the decommissioning, which should be enough to cover the costs assuming the money generates the expected return on investment, company spokeswoman Suzanne Grant said.

The permanent shutdown will hit Citrus County hard through the loss of jobs and tax revenues. "A few hundred" of the 600 full-time employees working at the nuclear plant will be retained, the company said. Roughly half are expected to remain onsite for maintenance and monitoring of the idle plant. The company said it will try to help others find work elsewhere within Duke Energy.

The reactor, known as Crystal River 3, is surrounded by four coal-fired power plants, two of which may be closed by 2018, the company said. The company may build a new natural-gas fired plant to replace the power that the nuclear reactor once generated, but a final decision has not been made, Grant said.

"We are very sensitive to the impact on our employees at the plant and on the Citrus County economy," Progress Energy Florida state President Alex Glenn said in a statement.

Crystal River 3 opened in 1977 and generated as much as 860 megawatts of electricity until it closure in 2009 for repairs and upgrades. But workers making those upgrades and repairs cracked the cement containment wall surrounding the reactor. Attempts to repair the cracks two years later resulted in additional cracks.

The company has debated ever since whether to repair the damage or close the plant.

On Tuesday, the company said its insurer, Nuclear Electric Insurance Ltd., had agreed to pay $530 million toward its insurance claim. That's in addition to $305 million the insurer already has paid. The money will go toward reducing customers' electric bills, the company said.

But the insurance payout is far too little to make the company and its ratepayers whole, said Charles Rehwinkel, an attorney with the Florida Office of the Public Counsel, whose agency is empowered by the Florida Legislature to represent utility ratepayers.

"Clearly the insurance settlement doesn't come anywhere near the cost of not having that plant in service," Rehwinkel said.

He expects the company will attempt to defray its costs by seeking more than $1 billion from ratepayers.

Duke Energy spent $338 million through the end of 2012 to repair the nuclear plant, $143 million of which was covered by payments by insurance. How much of the cost to close the plant will be covered by customers or absorbed by shareholders will be decided by the state's Public Service Commission.

Rehwinkel said customers could see an increase in their monthly electric bills of $5 to $10 if the Public Service Commission allows the company to pass along its costs.

One opponent of nuclear power hopes the Crystal River fiasco hurts Progress Energy's chances of winning approval to build two nuclear reactors in Levy County.

"I believe this is going to be further fuel on the fire for the Legislature, hopefully, to begin to question the wisdom of these high-risk investments in energy," said Stephen Smith, executive director of the Southern Alliance for Clean Energy."


Information from the Associated Press was used in the report. msasso@tampatrib.com (813) 259-7865 Twitter: @msasso

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