Progress Energy Seeks to Build $17B Nuclear Plant in Fla.

Tue April 08, 2008 - Southeast Edition
CEG



TALLAHASSEE, Fla. (AP) Progress Energy Inc. needs to build a nuclear plant in Florida at an estimated price of $17 billion to meet the growing demand for electricity, and customers would see their bills go up for nine years to cover the cost, the North Carolina-based utility said.

The second-largest electric utility in Florida said more than a year ago it was considering building the facility. But a March 11 regulatory filing with the state Public Service Commission officially signals the company wants to go forward with the plan to build Florida’s first new nuclear generating facilities since 1983.

Progress Energy Carolinas, a subsidiary of Progress Energy, also said in February that it was filing an application for two other reactors to expand the existing Shearon Harris Nuclear Plant near Raleigh. The company said it hasn’t yet decided whether to build those new reactors.

The two Florida reactors would be in Levy County along the Gulf Coast, just north of the company’s Crystal River nuclear and coal-fueled plants.

Construction costs are estimated at about $14 billion, plus $3 billion for transmission facilities. Those costs would be passed on to consumers if the proposal is approved, resulting in an increase of about $9 a month for the average customer using 1,200 kilowatt-hours of electricity a month, said Progress spokesman C.J. Drake.

The cost would be passed on to consumers from 2009 until 2018. But when the plants begin operation, one in 2016 the other in 2017, the company is expected to save about $1 billion a year in fuel costs, which would also be passed on to consumers.

Progress Energy Florida serves about 1.7 million customers in Florida, with heavy concentrations in the Tampa Bay area, the Orlando suburbs and the Big Bend region stretching along the Gulf of Mexico.

The state’s largest electric company, Florida Power & Light, filed a similar request in October, seeking to build two new nuclear reactors at its Turkey Point complex south of Miami.

Progress Energy Florida, a subsidiary of Raleigh, N.C.-based Progress Energy, said the new plants would employ approximately 800 full-time workers and create up to 2,000 more jobs indirectly. At the height of construction, about 3,000 workers are expected to be employed building the plants.

Volatile spikes in the price of natural gas and concerns about carbon emissions from coal plants are driving a renewed interest in nuclear power across the nation. Gov. Charlie Crist has also been a promoter of shifting away from coal plants, and the Florida Energy Commission has suggested that the state move toward more nuclear power generation.

Electric companies have gotten away from building nuclear plants in recent decades — mainly because of cost concerns, although safety and questions about what to do with the radioactive waste have also been issues. The last new U.S. nuclear plant opened in 1996 in Tennessee after 22 years of construction, at a cost of $7 billion.

Progress said nuclear power is one of three elements in its plans for meeting growing energy needs, along with more use of renewable energy, such as hydrogen, biomass, and solar power, and increased attention to conservation.

Progress Florida CEO Jeff Lyash said in a statement that energy demand in the 35 Florida counties the company serves is expected to grow 25 percent in the next decade.

“Customer demand for electricity continues to grow, and we have an obligation to ensure that our supply remains as reliable in the future as it is today,” Lyash said. “In the same way that our state plans for more roads and schools to accommodate growth, we must also plan to meet the rising demand for electricity.”

Plans for building additional generating capacity in the past have run into concerns about the cost increase for customers. Lyash acknowledged the amount was significant, but said it would be worth it.

“The benefits are also significant,” said Lyash. “We believe that new nuclear generation is a critical hedge against the future risk of volatile and increasing fossil-fuel prices, and the likely significant future costs of emissions regulation.”

State regulators are expected to schedule public hearings on the request later this year. The company also needs approval from environmental regulators and the federal Nuclear Regulatory Commission. That process is expected to begin later this year, too.