January 7, 2013 / 7:46 PM / 5 years ago

Duke nearing decision to fix or retire Florida reactor-regulator

Jan 7 (Reuters) - Duke Energy officials may be near a decision on whether to invest billions to repair the damaged Crystal River nuclear plant in Florida or to shut and decommission it, a Florida regulator said on Monday.

The 838-megawatt Crystal River reactor has been shut for more than three years due to the complex nature of work needed to repair a series of cracks that occurred after the containment building walls were opened to allow replacement of the reactor’s steam generators.

Florida Public Service Commissioner Eduardo Balbis pressed the company and other parties in the case on the timing of the nuclear decision as it will affect several regulatory cases scheduled to be heard at the agency this year.

“We have a decision that’s coming soon,” said Balbis who is overseeing status conferences on Crystal River. “I‘m glad it’s coming soon, whichever way it goes, because there are things that need to happen at that point. This is an important issue.”

A technical team at Duke’s Florida utility - Progress Energy Florida - is a week or two away from submitting its draft report evaluating repair options for the Crystal River reactor to the company’s chief nuclear officer, John Burnett of Progress told the commissioner at a status meeting Monday.

The chief nuclear officer will send the report to senior management, then to the Duke board, meaning a decision to repair or retire the utility’s only nuclear plant could be made by this summer, Burnett said, declining to be more specific.

The prolonged shutdown of Crystal River and uncertainty over the cost and feasibility of its repair became a point of contention between Duke board members and former Progress Chief Executive Bill Johnson in the final weeks before Charlotte, North Carolina-based Duke finalized its $18 billion merger with Progress Energy in July.

At one point, Progress had said Crystal River might return to service in 2014 at a cost of $1.3 billion, but skeptical Duke directors ordered an independent review of the situation prior to the merger’s closing. That review revealed that the repair bill could exceed $3 billion and take eight years.

Under a settlement agreement with Florida regulators, Progress had planned to make the repair/retire decision by the end of last year, but Duke Chairman Jim Rogers said the decision would likely take longer.

Another unresolved question that will play into Duke’s decision relates to how an insurance claim covering Crystal River will be handled by Nuclear Electric Insurance Limited (NEIL), an industry-sponsored insurance company, that is facing a number of costly claims.

Burnett said a mediation process related to the insurance claims is ongoing.

He said two sessions with a mediator have been held without an agreement. While another session has not been scheduled, Burnett said neither the mediator, nor the parties have declared an impasse.

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