Duke Energy shuts down Crystal River nuclear plant permanently

Last Updated: Tuesday, February 05, 2013, 5:17 PM EST
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Duke Energy will shut down the Crystal River nuclear plant for good, officials announced Tuesday morning.

The decision was not a major surprise. Repairing and improving the plant would have cost $3.4 billion and have taken years. The 36-year-old plant has not produced power since 2009.

"The company's own report evaluating its ability to successfully repair damage to the reactor's concrete containment building concluded the risks associated with making necessary repairs could result in dramatic cost increases and extend the amount of time it would take for repairs to be completed," said Mark Cooper, a leading U.S. expert on nuclear reactor financing, in a statement.

The company, through its subsidiary, Progress Energy Florida, said it is reviewing alternatives to replace the power produced by the unit, including the potential construction of a new, state-of-the-art, natural gas-fueled plant.

It said it's evaluating a number of potential sites for new plant capacity that may be needed in the future to meet Florida customer needs, including sites in Citrus County, a news release said.

"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," said Duke Energy CEO Jim Rogers said.

"This has been an arduous process of modeling, engineering, analysis and evaluation over many months. The decision was very difficult, but it is the right choice."

Coal plants to stay operational right now

The coal-fired units and employees are not affected by the move.

As previously announced, the company expects to retire the two older coal-fired plants (units 1 and 2) in the coming years – most likely in the 2015-2018 time frame – due to changing federal regulations, but there is no specific retirement plan for the units today.

The company has invested more than $1 billion in recent years in adding advanced emission controls on the newer coal-fired plants (Crystal River units 4 and 5) and plans to continue to operate those units for many years to meet customer electricity demands.

The Crystal River plant employs about 600 full-time workers. Duke said those employees will remain on site through the closing.

Costs weigh heavy in decision

The cost of repairing the plant would have been passed onto Progress Energy Florida customers. Now, customers will receive a rebate.

Duke announced that it has reached an agreement with its insurance company and that customers will receive an $835 million payout. Progress Energy Florida became part of Duke Energy last July.

Progress Energy originally tried to repair the plant in 2009. The company started to replace two steam generators and do upgrades that would have increased the plant's generating capacity by 20 percent.

But in the fall of 2009, while the project was underway, workers cracked the reactor's 42-inch thick concrete containment building. They repaired the wall, but soon discovered their efforts had cracked the wall again. The plant has been idle ever since.

The company's decision comes after a comprehensive, months-long engineering analysis of the damaged containment structure.

A report completed in late 2012 confirmed that repairing the plant was a viable option but that the nature and potential scope of repairs brought increased risks that could raise the cost dramatically and extend the schedule.