Crystal river nuclear plant $1.3b and counting gas in dogs stomach

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Here’s the gut punch: Within days, Duke could reveal its plans for Crystal River’s future, and many expect a decision to shut it down. For its customers, that would mean paying $1.3 billion for not a single watt of power. Duke makes out better. Of that, the utility pockets about $100 million, the Tampa Bay Times has found.

Public utility executives know they must absolutely, positively provide reliable, preferably cheap, electricity. Even the off chance of disruption in fuel supply or spike in price gives them nightmares. For them, diversity of fuel types — and nuclear power specifically — is a key to a good night’s sleep.

Prior to the recession, the economy was booming, energy supplies were tight and the supply of oil from overseas was potentially unreliable, the price volatile. National and state energy policies encouraged construction of new nuclear plants, which have the strong additional benefit of emitting no carbon pollution.

• Fixing it could cost up to an additional $3.4 billion plus $300 million a year for replacement power. Duke wants the insurance company to pay for some of that; the insurer is resisting. Duke’s own study raises the specter that a repair attempt could fail.

• The price tag for safely shutting down the plant would run about $900 million. And retiring the plant would put almost all of Duke’s energy supply eggs in the natural gas basket. So closing CR3 could breathe new life into the stalled Levy County nuclear plant project, whose soaring price has reached a projected $24 billion. State regulators said customers are already paying $1.5 billion toward the Levy project, even though it may never get built.

"Our customers are represented by consumer advocate groups and the Office of Public Counsel in public hearings to determine electric rates," she added. "We’ve worked diligently to reduce spending at the plant, while determining the best long-term option for the plant and maintaining the safety and security of the facility."

It all started simply enough. Back in 2009, Progress Energy Florida, which became part of Duke Energy last July, planned to replace two steam generators at CR3 and do upgrades that would increase the plant’s generating capacity by 20 percent.

Much of the $1.3 billion total remains due. Every year, customers pay the operating and maintenance costs as well as property taxes. But, for the most part, only financing charges have been paid on the steam generator replacement and the power upgrades. It’s like putting a huge bill on your credit card and only making a minimum payment each month.

Under state law, utilities can collect only the financing charges or "carrying costs" on capital projects until the projects actually go into service. So far, that adds up to $195 million for replacing the steam generators and upgrading the reactor’s potential power output. About half of the $195 million goes to costs that include taxes and paying Duke’s investors. Duke pockets the other half.

The PSC already approved the projects to replace the steam generators and increase CR3’s power. Typically, commissioners allow utilities to pass on costs for projects that already received their blessing, even when the work has flaws or proves unsuccessful.

For example, closing the plant will reduce fees to the Nuclear Regulatory Commission, which the federal regulator says have run as high as $10 million a year. Property taxes run about $9 million a year for the nuclear plant and would drop by as much as two-thirds.

Operating and maintenance costs of about $100 million a year would fall with decreases in personnel. Interest on money for the upgrade projects would stop accruing. Conceivably, some of the parts installed as part of the upgrade could be resold.

Arnie Gundersen, a nuclear engineer and consultant on utility regulatory matters nationwide, said the spending should have stopped years ago. But, he said, Florida lawmakers and regulators rarely put up much fight against Progress Energy, and now its new owner, Duke Energy.

Gundersen points to the Maine Yankee nuclear unit in Wiscassett, Maine, which faced regulatory scrutiny and $400 million in repairs in 1994. The company that ran the plant took just two years to decide to shut it down when it became apparent it didn’t make economic sense to attempt the repairs.