US: Levy Nuclear Project Moved Back By Three Years


Progress Energy has put back its nuclear new build plans by three years while requesting increased rates to finance the project. The Levy development should allow Florida to avoid becoming overdependent on currently cheap gas for power generation.

The utility has been progressing a plan to build two Westinghouse AP1000 reactors at a 2060 hectare greenfield site in Levy County, Florida. It has secured a decision from regulators that the plan would result in no significant environmental impact and is looking forward to receiving its final license to build and operate the plant.

However, the company reported yesterday to Florida’s Public Service Commission (PSC), which regulates power companies in the state, that it has put back the schedule for the Levy development by three years. It now plans on having the first new reactor operable from 2024 with the second following 18 months later.

The company said: “Although the scope and overnight cost for the Levy County nuclear project – including land acquisition, related transmission work and other required investments – remain essentially unchanged, the shift in schedule will increase escalation and carrying costs and raise the total estimated project to between $19 and $24 billion.”

A cost estimate in 2008 had put a $17 billion price tag on the project – $14 billion for the reactors and $3 billion for the required 320 kilometre transmission line – when the units were slated to start in 2016 and 2017.

The reasons for the rescheduling were “lower-than-anticipated customer demand, the lingering economic slowdown, uncertainty regarding potential carbon regulation and current low natural gas prices,” said Progress. Despite these factors, the company remains committed to nuclear power: CEO Vincent Dolan said it was “a key component of Progress Energy’s balanced solution strategy to meet customers’ future energy needs with efficient carbon-free electricity.”

While current supplies of cheap gas have affected the business case for nuclear, the company noted that the state of Florida already relies on gas for some 60% of its electricity and that “overdependence on any one fuel can expose customers to potential fuel cost spikes and supply disruptions.” The PSC is concerned about this, and expanding the use of nuclear power in the long term is one response.

Accordingly, the PSC accepted the need for the Levy nuclear development in October 2009 and allowed Progress to increase customer bills to help it finance the project with less borrowing, adding $2.86 to an 1000 kWh electric bill. Progress has now asked the PSC to increase this amount to $3.45 on the same size bill from the start of 2013, and for this to be the extra charge until the end of 2017. A separate charge is also in place for uprate work at Progress’ Crystal River nuclear power plant and this is set to be raised to $1.64 per 1000 kWh bill from the start of 2013.

Crystal River has been offline since September 2009 when work to increase its capacity by 20% began. At that time a delamination problem was discovered in the reactor building. Progress is currently examining proposals from contractors to address that issue. The uprate should increase the reactor’s generating capacity from 860 MWe to over 1030 MWe when it comes back into operation.

The PSC has estimated that the additional capacity at Levy and Crystal River will save Florida power customers between $155 million and $1.5 billion compared to alternative power sources.

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