Progress Energy nuclear plant delayed by at least 20 months

Progress Energy’s $17 billion nuclear project has been delayed by 20 months, but its customers will continue to pay for it in their monthly electric bills.

The utility wants to start charging customers nearly twice as much next year for the Levy County project even though it won’t start producing power until March 2018 at the earliest, the St. Petersburg utility announced Friday morning. The delay may also increase the price of the project, but the utility won’t know the details until later this year.

Jeff Lyash, president and chief executive of Progress Energy Florida, defended the utility’s decision to continue to charge customers for the plant. The investment will save customers money in the long run, he said. Without it, the project will likely fail.

“Nuclear is critically important in helping us hit the right balance with fuel diversity, security, greenhouse gas reductions and it’s in the best interest of our customers,” Lyash said.

The utility has faced populist outrage this year against its rising rates. In January, its customers saw a monthly increase of $11.42 per 1,000 kilowatt hours to pay for nuclear projects, part of an overall 24 percent increase.

Customers rebelled, flooding their legislators with angry phone calls. Some lawmakers threatened to reverse the 2006 law that allowed utilities to bill customers for the early costs of building a nuclear power plant, years before the plant starts producing electricity.

Fearing that the threats could lead to a repeal of the law, and out of deference to the state’s financial straits, Progress Energy took a step backward. The utility lowered its rates, reducing the monthly nuclear charge to $3.62 per 1,000 kilowatt hours. Now, the utility wants to raise that charge to $6.69 per 1,000 kilowatt hours. A small portion of the charge pays for upgrades at the existing Crystal River reactor, but most of the money pays for the Levy County project.

Sen. Mike Fasano, R-New Port Richey, said Friday, “It really amazes me how shameless Progress Energy is. They have no consideration for the customer. None whatsoever. They can talk all they want about how they want to put the customers first. They have yet to put the customer first when it comes this issue.”

Fasano voted in favor of the legislation in 2006, but said he feels differently about it today. He said he wants to see the early charges for the plant suspended.

“We have already now nuclear power plants that, when they were brought to the legislature a few years ago, the cost was going to be half of what it is now. With further delays, the cost will increase. Unfortunately, it is going to be the customer that is going to pay for that.”

Fasano said that there are no guarantees that there won’t be more delays and ballooning costs. Customers should not have to bear that risk, he said.

Delays and cost overruns derailed the nuclear industry in the 1970s and 1980s, leading to a 30-year break in new plant construction. This time, the industry worked with federal regulators to streamline the years-long licensing review process. Instead of power plants that differed from project to project, this time energy companies would pick from a handful of standardized “off the shelf” designs. Instead of two licenses from the Nuclear Regulatory Commission — the first to build, the second to operate — the utility would get one combined license. The industry promised that the changes would speed projects along, and forestall the multi-billion dollar boondoggles of decades past.

However, there are early signs that all is not going smoothly. This week, the NRC said that its review of the Westinghouse AP1000 — the reactor design picked by Progress Energy, Florida Power & Light and four other energy companies -- is running 15 months behind schedule. The NRC estimates that its review will be complete by August 2011. Without approval of the design, Progress Energy and the other energy companies can not get their licenses to start construction.

The NRC said the delay in the reactor review is not expected to significantly delay plans for the seven projects that plan to build the AP1000 reactors. Adrian Heymer, director of strategic programs at the Nuclear Energy Institute, an industry trade group, agreed. From here on out, though, the NRC must maintain its schedule or risk delaying construction of several projects, each worth billions of dollars.

“I think moving out from now on everything has to mesh perfectly,” Heymer said.

On Friday morning, Progress Energy announced another hitch. The utility had hoped to begin excavation and site preparation below the Levy County nuclear site before the NRC granted its license. However, the NRC said Progress Energy would have to wait until the license is granted, which is planned for January 2012.

If the review of the AP1000 takes longer than anticipated, or if Progress Energy’s license runs into further delays, construction would likely be pushed further back.

Lyash said that work on the Levy County project continues. The utility will continue to spend money on licensing, permitting, and the transmission lines needed for the power plant. The utility can also continue to order long lead-time components, and build a barge slip and heavy haul road to bring equipment to the site.

“The project is not stopping,” he said.

So far, Progress Energy said it has invested $389 million in the Levy County project, and that approximately $80.5 million has been collected from customers.

-Asjylyn Loder, Times Staff Writer

updated at 12:57 p.m.

Comments

[jeff]

I would like to start a petition to stop this company from charging us in advance on our power bills to pay for this plant, if anyone agrees please add your comments to this blog and maybe we can start something.

[Em]

Jeff -- I agree that something must be done to control Progress Energy's greedy business practices. There is absolutely no reason that we should have to pay for building their plant. They should have to offer stocks (with dividends) or borrow from a bank for additions or improvements.

But I'm not sure a petition is the most effective way to get the legislature to change the law -- and that is what is needed. That damned law needs to be changed so Progress Energy can't charge us. Perhaps a deluge of letters to individual legislators plus the same the the presidents of both houses of our legislature plus your suggestion of a petition with many, many signatures might be helpful.

We really need to address this in as many places as we can. But we really need to stress the need to change that law!!!

Em

[Frogamander]

The same "construction work in progress" law is now in effect in SC & GA. GA just passed it & 2007 in SC. It would be hard to get a legislative reversal in SC and GA, but can the law be attacked in all the states as being unconstitutional (a taking without receiving a benefit)?

[LittleBro]

I agree completely with Em. The problem, though, is that people will be outraged today and, maybe, for as long as the weekend. Then the interest will die until the next announcement. Meanwhile, the legislature has permitted the charge and "Progress" will say it has no choice since it's the law. And the legislature will ignore it because the legislators will assume (correctly) it'll all blow over in a day or two after each announcement. Besides, they'll say, it's less than $7.00 a month.

What needs to be done is for everyone who cares to start flooding their own legislator's email inbox. Then, set an alarm to remind you every two weeks at breakfast time to send it again with a demand for a response.

At the same time, start flooding the newspaper editor's inboxes with requests that the paper establish something like it's "Mugshot" page or "Hulk Hogan" archive or the "truthmeter" page that just got the Pulitzer prize to keep track of and report on what the legislature is doing about the matter.

A single petition won't have any effect at all. It's got to be a constant, serious demand directed to the people who caused the problem. And there has to be a meaningful demand for responses.

If something isn't done now, then imagine what will happen when "Progress" wants to start spending 17 BILLION dollars to build this boondoggle that will use a lot more energy in its construction than it will ever, in its entire lifetime, produce. While, during its life, it produces even more nuclear waste that someday "Progress" will say it will get rid of by loading it into a missile that will carry it to the sun.

[Paul]

If you're doing something to complain about this, use the telephone or write a letter. E-mails are deleted and very rarely taken seriously. If thousand of people jam their switchboards, the message will get through.

[Carrie]

I agree with LittleBro.Everyone is fired up today, but by tomorrow, no one will be in the mood and Progress Energy will go on about their business, charging us obscene fees for something we don't even know if they will ever be able to deliver. I can't do much alone, but I ensure my family uses as little electricity as possible; we unplug everything not in use and run the A/C on 81 degrees. We have small fans in each room that get turned off when we leave and dark curtains on all the windows. In the winter, we have extra blankets. I am happy to use as little electricity as possible just to make sure PE doesn't get to charge us for anything more than we absolutely can't function without. I hate them.

[ADS]

The pressure to change the law needs to be made. Jam the phone lines of the lawmakers who have allowed this. A for profit company being subsidized by the taxpayer. These companies have lobbied the lawmakers and we need to fight back. After all who do the lawmakers represent???

[Going nowhere… fast]

Leave it to the wackos to fight for alternatives… then fight against them.

[ctb]

I stand by my prediction this boondoggle will never be built:

"...The utility was unable to get approval from the Nuclear Regulatory Commission to begin construction before site and safety reviews were complete, said spokeswoman Suzanne Grant.The company does not yet know if the delay will add to the cost, she said...."

So they want to build BEFORE safety reviews are complete? What could possibly go wrong? & they top it off w/ a thinly veiled threat of more expense if they don't get their way?

I've a very strong suspicion this is ALL about the $$ & getting while the getting's good; Progress Energy sees the writing on the wall & has been exploiting the PSC & its own customers while they still can....

[mac]

Have you all heard of Florida Citizens for Fair Electric Rates? They have a website http://regressenergy.com/. Perhaps those of us who don't want this plant built and definitely don't want to pay for it now should try to get involved with this group. Informative website. What do you think?

[Tino]

mac,

the poor Florida Citizens for Fair Electric Rates are going to get run over by the likes of the Southern Alliance for Clean Energy and other groups that seek to triple your electric rates.

Walk away from your computer and go get your electric bill. See what you are paying on a $/kWh basis. It's probably around 12 cents. The eco-greenie groups want the utility to pay 32 cents (plus tax credits that you ultimately pay for) on your behalf for each happy, green kWh that they can buy. Over time, and with the addition of carbon taxes, your bill is going to double or triple.

You will wish that we had a nuke plant kicking out 8-10 cent power when it is completed, instead of the 32 cents plus higher taxes like in Gainesville:

http://solveclimate.com/blog/20090324/why-isnt-u-s-embracing-feed-tariffs

Look at the other articles on this blog. Most people here want you to pay HIGHER prices, not lower. I wish you the best of luck, but you are swimming upstream against a green tide.

[Ummm, HELLO!]

A debate over the “pre” billing structure is a legitimate one. But don’t let that cloud the pragmatics of building this new plant. It equates to sustainable economic growth, jobs, and an alternative energy source for Florida. In case you hadn’t noticed, we’re badly in need of all of those.

It’s a display of raw ignorance to rail against offshore drilling AND its alternatives. This will get built, and moreover, SHOULD get built. Anyone fighting against this is a clueless wackjob.

[lonewolf]

I am hearing more sentiment that these 2 plants will not be built. I agree with those who also say rebel and force the legislature to reverse the up front charges for the customers. Progress Energy is akin to a criminal. Stealing to line their greddy pockets. If they want it let them foot the bill. They are just going to collect a pile of money then suspend or cancel these 2 proposed plants.

[Marc]

20+ Billion dollars, + 8-10 years to permit and build it and then the destruction of millions of acres of wildlife habitat in order to route the hi-tension wires to interconnect this lump of coal. Alternatively, they could buy and connect solar and wind energy TODAY, at multple points in the existing grid and 1/10th the cost! Are they just dumb or what?

[LittleBro]

"You will wish that we had a nuke plant kicking out 8-10 cent power when it is completed, instead of the 32 cents plus higher taxes like in Gainesville:"

Tino - I don't remember seeing this idea ANYWHERE since the days of "electricity is penny cheap" in the sixties.

Ignoring all the other problems with nuclear - which should not under any circumstances even be considered - is "Progress" saying they will guarantee that rate?

And, "ummmm, hello" - you contribute nothing of value with your idea that anyone who doesn't agree with you is a "clueless wackjob." But, you might be either a "Progress" flack or a legislator. In which case, your nonsense is excused.

The reason for using an email flood rather than the mail and telephone is that it might happen. Not a lot of people are going to write a letter once or twice a month. It's a great idea but it doesn't have much of a chance of happening, I don't think. The key is to demand a response and follow that up with a phone call and/or letter.

[Concerned citizen]

Progress Energy is a greedy bunch. Go look on their website. They have 8 Senior Vice-Presidents in addition to their President and 43 count em 43 other Vice Presidents. No wonder they need all this money upfront. to pay those un godly salaries.

[Energizer Bunny]

Here is some math:

$17 billion cost for nuclear plant. Will probably cost a lot more by the time it is finished and does not include transmission ties and other infrastructure upgrades required to add a base load generation plant. Also, when will it be complete and generating power?

$40K is typical cost for 5K watt home solar with grid tie equipment.

Take that $17 billion and apply to distributed solar and you get 425,000 homes that could be equipped with solar which require NO infrastructure upgrades at all. The homes are ALREADY distributed!

How many watts is that? Lets see,
425,000 * 5000 = 2125000000 distributed watts or 2125 MW. That is a maximum and only available during the day when most energy is consumed anyway so make it 1600 MW.

How big is that $17 billion nuclear plant? Other PE nuclear plants generate between 1875MW and 2313MW.

What's so great about this alternative?
1) There is no waiting period for environmental impact, NRC approval, etc.

2) There is no real electrical infrastructure upgrade required, the power is distributed throughout the grid.

3) This will employ a huge number of people across the ENTIRE State of Florida in small businesses that are struggling and don't have a monopoly to leverage in hard times.

4) This would make Florida a LEADER in the alternative energy industry.

5) Solar generation incurs NO FUEL CHARGE on top of the bill!

6) No single point of failure, it's distributed across the state, no single hurricane, accident or other event would cause the distributed solar plant to go off-line. Oh, maybe if the sun goes out...

I'm not a tree hugger and I know we will always have a need for base load power plants but the solar option provides real potential to provide power AND help the State of Florida through this economic downturn.

[Energizer Bunny]

BTW, it's not like Progress Energy has very many new employment opportunities listed on their website. There is not one listing for St. Petersburg with only 8 new openings for the entire state of Florida! The openings all seem to be in the Carolinas, surprise, surprise...

Time to do something for the state of Florida!!!

[LittleBro]

Progress Energy CEO Bill Johnson received a compensation package valued at $6.3 million in 2008, securities documents say – down from $7.7 million in 2007.

The figures reflect the accounting charges that Progress (NYSE: PGN), the Raleigh utility, took in each year for Johnson’s compensation. They include changes in the value of Johnson’s pension.

Most of the decline in Johnson’s compensation came from stock awards valued at $3.1 million in 2008, down from $4.8 million in 2007, according to Progress.

The CEO’s salary increased, to $950,000, from $807,539. Johnson became Progress Energy CEO in 2007 upon the death of former chief executive Robert McGehee.

Johnson received $929,000 in performance bonuses. The change in his pension value and nonqualified deferred compensation increased, to $1.09 million, from $947,000.

“All other compensation” increased to $304,571, from $209,445. The figure includes 401(k) contributions, life insurance, gross-up payments, and $28,224 in perks such as an auto allowance, financial planning, Internet access, and personal use of the company aircraft.

Progress Energy’s stock fell by about 20 percent in 2008, outperforming the roughly 33 percent decline in the Standard & Poor’s 500 stock index.

http://triangle.bizjournals.com/triangle/stories/2009/03/30/daily35.html

[Karl]

Progress Energy is a Raleigh, North Carolina Company, not St. Petersburg. They're willing to give $17 billion for a reactor because knee-jerk world demand sent construction prices skyrocketing. Everyone else "just has to have one" too. This reactor should only cost $6-8 billion but when you're dealing with other people's money, who cares how much it costs.

[Brian]

People don't care how much it should cost, they care how much they have to pay out of their own pocket for a publicly traded company. What Progress Energy is doing is akin to GM having everyone that owns one of their cars pay a "surcharge" for a new Hybrid manufacturing facility. Except in that scenario, the consumer would have the choice of choosing whether or not to buy a GM car and telling them to go stick it. Progress has a monopoly, the consumer can tell them to stick it, to no avail thanks to all of the politicians on both sides of the aisle who have their hands out taking money from lobbyists and catering to their every want, like some kid in a candy store.

I'm all for the very politically agenda minded St. Pete Times, putting this story on their front page and having their investigative staff do some research as to who is responsible for green lighting this project, but I doubt we'll ever see that happen. You only see the Times get involved when it fits their agenda.

Whether it's a petition, calling our legislators, etc. I'm all for taking action.

[Tino]

Energizer Bunny,

your math is atrocious. The $17 billion includes transmission infrastructure costs that would be required for any addition to baseload power, not just nuclear.

And baseload power is what is needed in the future, not intermittent power. The local grid could not handle 2,000 MW that appeared and vanished throughout the day.

That $17 billion also includes financing costs, which would be required as well for your solar scheme, unless you think that the utility could charge everyone $10,000 upfront for their fair share.

Oh, and your solar costs are off by about a factor of 4 or 5. Nuclear assets run at about a 90-94% availability over the long term. Solar in Florida will get you about 30%. I think that you are confusing capacity and energy and firm vs. non-firm power. Wind in Florida will get you about 10%, and is not considered economically viable in the state. Therefore, you are going to have to build some firm backup to your solar assets.

How about some CO2-emitting (oh no!) natural gas plants?

I am not a utility employee, but a rational ratepayer who wants lower bills. Paving over tens of thousands of acres to put up solar panels is neither the cheapest nor the greenest option.

[Energizer Bunny]

I don't even care who is at fault, I just want our legislature to reverse this disaster before it costs us any more money. Preferably something that will benefit more than one company, more than one locality, and create more than a single pocket of jobs, most of which will come from other places besides Florida!!!

With everyone fleeing Florida I can't see the urgent need for a nuclear plant. I do see the immediate need to implement an equivalent solar based system across the entire state and not wait until 2018 for any power to be generated at all.

[Bob]

Energizer - Solar is a great idea but it should be considered for additional peak load. Solar can replace oil and natural gas peaking plants - both expensive fuel sources. The nuclear plant is a base load power source. It will be what supplies power to you at night - without the pollution and carbon emmisions of coal.

I know we are all a borrow and spend society. We all love to leave the debt and problems for a our grandchildren. Quite a nice legacy. Doesn't anybody think it is about time to "pay as we go"? You know, kind of like saving up to buy a car or a computer. You pay cash and save all that interest. Sure, Progress Energy can borrow the money. When they borrow huge sums, it will make their credit rating go down. They will have to pay higher interest rates on the debt- which you will have to pay NOW anyway. For those that say "what if I'm not here in 5 or 10 years - what's in it for me?". Why would you ever bother saving for anything with that mindset? You could be dead tomorrow. It's time to bite the bullet and pay for the future now.

Remember, Progress Energy is REQUIRED to plan for and provide power in the future. They can't simply say forget the plant for now - we can't afford it.

[Energizer Bunny]

Base load power is needed? But we're not going to get the first bit of it until 2018 and that date will be WAY off I'm sure by the time NRC and all the environmental impact studies are done, not to mention evacuation zone planning. I'm not against nuclear power, I just don't like being forced to spend that much money to build a capital resource for a monopoly that I DON'T OWN!