Duke Energy's Nuclear Plant Repairs
$1.3 Billion May Not Be Enough
Duke Energy’s (NYSE: DUK) CEO Jim Rogers on Thursday stated that the $1.3 billion cost estimate for renovating the Crystal River nuclear facility is probably too low.
Although Duke hasn’t figured out whether or not to permanently end operations at the Citrus County, Florida plant, a third-party evaluation of the facility’s feasibility for future functioning is due to conclude in a month.
From the Tampa Bay Times:
"The cost estimate is trending higher," Rogers said. "The repair plan appears to be technically feasible but issues remain."
In September 2009, Crystal River was shut down for routine maintenance, but the 42-inch containment building, made of concrete, developed cracks.
The cracks were worsened by an expensive repair attempt. Overall repairs began to be estimated at around $1.3 billion, not including an additional $1 billion for power replacement.
But Nuclear Electric Insurance Limited, which covers Crystal River, opened up its own investigation of the facility in 2011 and has stopped making voluntary insurance payments toward claims made by the plant, the Tampa Bay Times reports. Crystal River and NEIL will meet later this year to work out these issues.
After the successful Duke-Progress Energy merger, the broken Crystal River plant and a planned Levy County plant will require investments of several billion, but the broken plant gets first priority.
Crystal River represents Duke's sole nuclear plant in Florida. Progress Energy Florida uses natural gas to generate electricity.
Given the increasing cost outlook, it may be difficult for Crystal River to balance out the books.
But at a proposed startup cost of $24 billion, the two-reactor Levy County plant won’t exactly be a quick deal either. In fact, it would be the most expensive project of its kind.
According to Rogers, whatever happens, the new plants would come online in the 2020s. Although that could mean Florida will experience a few years without any nuclear power, the Tampa Bay Times says, there may be ways to compensate using more conventional options.