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NRC decision delays Levy County nuclear plant

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Later construction means lower bills for customers

By Lou Elliott Jones

Bad news for those in Levy County who were counting on construction of a $17 billion nuclear plant near Inglis: the Nuclear Regulatory Commission has put a kink in construction plans and delayed the start by 20 months.

The good news is that customers will see lower bills for 2010 as Progress Energy, which has proposed building two nuclear generation units about 2 miles from Inglis. The company told the state Public Service Commission it would not need half as much money as previously planned for “cost-recovery” for the construction.

The NRC’s denial of a limited work authorization to allow excavation and foundation prep at the plant site while the plant’s license application is under review is expected to delay construction of the facility by 20 months.

The shift in the construction schedule will move the power production dates back by at least 20 months beyond the original 2016 date, according to a press release.

The company expects to receive the Combined Operating License for the Levy plant in late 2011 or early 2012.

"The Levy County nuclear project remains one of our company's top priorities, and we are committed to pursuing state-of-the-art new nuclear facilities in Florida, especially given the strong public policy support for nuclear energy at the state level," said Jeff Lyash, president and CEO of Progress Energy Florida, in the company press release. "Shifting this portion of the work until we have the combined operating license in hand enables us to spread some of the costs over a longer period. We believe this is in the best interest of our customers particularly during this continuing economic slowdown."

In Friday’s filing with the state PSC, the company is asking to spread the costs over a five-year period, which would see a charge of $6.69 per 1,000 kilowatt hours on customer bills in 2010, instead of the $12.63 per 1,000 kilowatt hours allowed by law.

The charge is for the proposed Levy County plant as well as improvements to increase the output at the existing Crystal River nuclear plant from 900 megawatts to 1,080, according to the company’s press release.

The Crystal River plant accounts for 30 cents of the requested amount.

Hearings on the rate proposal will be held by the state PSC in September with a decision expected in mid-October.

The company said it is too early to project a specific amount for an average customer’s January 2010 bill, or the cost of producing electricity in January 2010, as both are affected by many factors, including base rate, fuel, energy conservation programs, government-mandated environmental projects, gross receipts taxes and local government fees and taxes) that are not determined.

The PSC is expected to make decisions on the company's 2010 base rates, which make up about one-third of a typical residential monthly bill, in October. The company will file its projected fuel costs for 2010 in September. Fuel costs represent nearly half of a customer bill. Utilities earn no profit on fuel.

The NRC’s decision means the company will be adjusting the construction timeline with changes depending on negotiations with the engineering, procurement and construction vendors.

"This shift in schedule provides time for the economy to recover, which should allow for financing in a more stable market," said Bill Johnson, president, chairman and CEO of Progress Energy.   The company’s Friday press release said, the Levy County nuclear project continues to be the best generation option for Florida taking into account cost, potential carbon regulation, fossil fuel price volatility and the benefits of fuel diversification.   A complete update on this story will be in the Thursday, May 7 issue of the Chiefland Citizen.