Progress Energy to repair cracks at Crystal River nuke facility

06/28/11 Kate Bradshaw
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As flooding in the Missouri River threatens a Nebraska Nuclear plant, and fires encroach on New Mexico’s Los Alamos nuclear laboratory, a utility company has said it will repair cracks at its Florida facility rather than permanently shutter the plant. Progress Energy’s Crystal River nuclear power plant has been out of commission since a crack was found in a containment wall there. Jeff Lyash, the company’s executive vice president, said today in a conference call, the high cost of repairing the damage beats that of permanently closing it down.

"Results of this repair vs retire analysis showed that on both a quantitative and qualitative basis it is a prudent course of action to repair CR3 using the selective repair option rather than decommission the plant."

So far, Progress has spent $214 million on repairs. Total cost estimates range between $900 million and $1.25 billion. So far the project has cost more than $210 million. Progress chief financial officer Mark Mulhern said insurer Nuclear Electric Insurance Limited, or NEIL, has covered most of that.

"To the end of May we have spent $214 million ini repair costs and have been reimbursed out of receivables from NEIL for $149 million. That leaves a balance for recovery of $65 million."

The balance he mentioned would probably show up on consumer power bills with approval of the state Public Service Commission, a regulatory body critics say heavily favors utilities. Total consumer cost for the whole project are projected at $560 million. Then there’s the cost of replacing power from the Crystal River nuke plant. Mulhern made the controversial claim that nuclear power is less expensive than other traditional sources. He said the cost of having the nuclear reactor down has added up. Insurance covers some of it, he said, but the rest, again, may get covered by higher electricity costs for consumers.

"So at Crystal River 3 the total replacement power cost differential is $375 million of which $229 million is expected to be recovered from NEIL. The balance of $146 million will be reviewed by the Florida Public Service Commission at a later date."

Bill Newton, head of the Florida Consumer Action Network, said nuclear power is actually much more expensive than other energy forms.

"We think the utilities motivation for charging customers an additional 560 million to repair this and possibly even more is that when they make these investments they get to charge the customers, they get a return on their investment of 10 to 14 percent so the more money they invest in their nuclear power plants, and the nukes are huge investments, they get to make more profits."

Vincent Dolan, head of Progress Energy’s Florida operations, didn’t say what the company would do if the PSC rejected their request for a rate hike.

"Ultimately the Commission will review prudence of all the events associated with this outage and repair. We have to really determine with them and the other interested parties how we're going to proceed on what schedule. Obviously the sooner we get moving to get the unit back in service the sooner the benefits are going to show up for consumers."

The other option would have been to permanently shutter the nearly 40-year-old facility, but Progress Energy CEO Bill Johnson said that would have cost more.

"Our overriding committment in all this is safety. Beyond that we're basing our Crystal River decisions on which course of actions will best serve the interests of our customers in Florida."

The PSC isn’t the only agency that has to sign off on the plant. Repairs or not, the US Nuclear Regulatory Commission has to grant Progress a license to operate a nuclear facility every 20 years, and the current license for Crystal River is up in 2016. The commission is holding a meeting in Crystal River this evening to gain public input. Johnson said he’s not too concerned about getting the extension.

"The commission has just issued 2 in recent weeks so there's still following their normal licensing and relicensing schedules and processes."

The Associated Press recently investigated the relationship between the nuclear industry and the NRC, and found the agency was letting aging facilities run well beyond their estimated lifespan. Paul Gunter, head of Beyond Nuclear, said the cozy relationship between the NRC and the utilities it oversees is troubling. He says the nuclear industry isn’t forthcoming when it comes to its flaws.

"The nuclear industry in general will downplay the safety significance of a lot of well-known problems and risks that are undertaken in turning these nuclear power plants on. Obviously there are lots of deteriorating conditions in those plants as they get older. Any...whether we're talking about a used car or a nuclear power plant everybody knows that the older they get the more cracks they get and the more maintenance they require."

As for the Progress plant in Crystal River, Gunter said he thinks it’s clear that the problem lies in the plant’s construction materials – something not even a billion-dollar repair job could remedy.

"It could very well be the agrigate in the concrete has been shown to be a problem. Problematic. These cracks may, in fact, not be static and a repair may very well not address crack growth in the concrete later because this is pre-stressed concrete."

Gunter said what utilities should really be doing is taking sustainable energy seriously rather than continuing to invest in a power source that could potentially wreak the kind havoc in Florida that Japan is seeing some three months out from the disaster at Fukushima Daiichi. Meanwhile, the Associated Press is reporting that officials are monitoring air quality around New Mexico’s Los Alamos National Laboratory, which was evacuated and shut down due to an encroaching wildfire. State and federal officials are testing the air for radioactive particulate matter.

Previous WMNF news coverage of nuclear power

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