The estimated cost of uprating Florida Power & Light's four existing nuclear units has risen sharply from the previous estimate because of higher-than-expected labor, engineering and other costs, FPL said in late April.

The FPL initially told Florida's Public Service Commission (PSC) its estimate for increasing the generating capacity of two nuclear units at its Port St. Lucie station and two nuclear units at its Turkey Point plant would cost between $2.32 billion and $2.48 billion. However, the utility now figures the project will cost between $2.95 billion and $3.15 billion—up by roughly $600 million, or 27%.

Terry Jones, FPL's vice president of nuclear power uprates, said the earlier estimate was developed more than a year ago, when only 36% of the project's detailed engineering had been completed; 90% has been completed now, he said.

Jones said about $110 million of the estimated hike in the project's cost is related to Nuclear Regulatory Commission requirements and approval delays. About $150 million is tied to "design evolution … [or] issues discovered during engineering design," he said, citing "structural upgrades [for] the ultimate weight and dynamic loading of new equipment."

Jones added that about $220 million of the increase "refers generally to the issues and related costs that cannot be known until designs are … at the 90% complete stage and detailed construction planning and plant walkdowns can commence."

FPL noted that the new cost estimate would have been $135 million higher, but the utility and Bechtel, the project's engineering-procurement-construction contractor, identified $89 million in "efficiencies and process improvements." Further, Bechtel agreed to $46 million in price reductions and concessions, including foregoing its incentive fee and reducing its daily living allowance.

FPL told the PSC the higher costs are mitigated in part because the uprates will now provide some 490 MW of additional capacity, or 40 MW more than initially estimated. The utility also said in its filing that despite the higher cost, "completing the project remains solidly cost-effective" and will result in an estimated $3.8 billion in fossil-fuel costs over the uprated units' operational lifetimes.

"We're very concerned about the skyrocketing costs" associated with the uprates, said Florida Public Counsel J.R. Kelly, whose Office of Public Counsel represents utility customers in the state. He said his office will examine FPL's filing in more detail.