Fla. project's cost increases, delays draw fire from consumer advocates

Nuclear: Fla. project's cost increases, delays draw fire from consumer advocates
Hannah Northey, E&E reporter
Published: Wednesday, May 2, 2012

Progress Energy Florida drew the ire of consumer advocates yesterday after revealing higher costs and stretching out
the construction timelines for two proposed reactors in north-central Florida.

Progress told state regulators it will cost up to $24 billion to build two 1,100-megawatt reactors in Levy County -- up from
a previous cost estimate, $22.4 billion. The utility also plans to add eight years to the construction schedule, saying the
reactors would start operating in 2024.

Progress said the rate hike is needed to bolster the amount of nuclear power generation in the state and counter
Florida's heavy reliance on natural gas for power generation.

"Overdependence on any one fuel source can expose customers to potential fuel cost spikes and supply disruptions,"
Progress Energy said in a statement. The Raleigh, N.C.-based company asked Florida's Public Service Commission to
approve its proposal to recoup $5.09 each month from ratepayers, up from $2.86 this year, representing a 78 percent
increase.

Critics say Progress is illegally collecting money from ratepayers for nuclear units that may never be built.

"It's mind-boggling to think that Progress believes that the Levy reactors are the most cost-effective energy option for
Florida," said Sara Barczak, a program director at the Southern Alliance for Clean Energy.

Progress has been recouping millions of dollars from Florida customers to pay for the reactors under a 2006 state law
that lets utilities use a "pay as you go" approach to reactor construction. Progress has touted the law as a means of
reducing the overall cost of nuclear projects but has acknowledged that ratepayers won't be reimbursed if the reactors
are abandoned (Greenwire, Feb. 24).

Vincent Dolan, Progress Energy Florida's president and CEO, said in a statement that "the 2006 Energy Act passed in
Florida makes it possible for our company to pursue new, capital-intensive nuclear investments that will help ensure
clean, affordable and reliable power for customers, now and in the future."

But critics of the project are challenging the 2006 law in the Florida Supreme Court. SACE has argued that the state's
"nuclear cost recovery" is unconstitutional and that the statute grants the Florida Public Service Commission too much
discretion to implement the law.

Opponents say Progress' proposed reactors should be scrapped because they are plagued with cost overruns and
expensive delays, all of which casts doubt on whether the units will move forward.

"These reactors are very, very unlikely to happen," Barczak said.

Tim Leljedal, a spokesman for Progress, said several state and federal courts have consistently ruled the 2006 law to be
constitutional.

Progress expects to obtain a license from the federal Nuclear Regulatory Commission next year to build and operate the
plants. Last week, NRC and the Army Corps of Engineers issued a final environmental impact statement that found the
reactors pose no threat to the environment (E&ENews PM, April 27).

Progress also asked the state for permission to collect $49 million for its Crystal River nuclear plant on Florida's west
coast, which has been offline since 2009.

Costs for repairing that facility have ballooned to $2.5 billion, but Progress has maintained that it can safely repair the
building. Critics, meanwhile, say it should be torn down and replaced (Greenwire, Nov. 21, 2011).