Utility Duke Energy announced on Feb. 5 that it is canceling previous plans to repair its damaged Crystal River nuclear plant in Citrus County, Fla. Instead, the company says it will build a new natural-gas powerplant elsewhere in the state to replace the retired 914-MW facility.

Photo courtesy Duke Energy
Progress Energy Florida initiated a project to replace generators at the Crystal River nuclear plant, but the work caused cracking in the containment dome. Attempts at repair failed.

The Charlotte, N.C.-based utility reached the decision after "an arduous process of modeling, engineering, analysis and evaluation over many months," according to a statement by Jim Rogers, chairman, president and CEO.

The Crystal River plant has been idle since 2009, when Duke subsidiary Progress Energy Florida began a project to replace its steam generators. But after contractors cut a 27-ft by 25-ft hole into the plant's containment dome to remove and replace the generator, the structure developed cracks. Attempts at repair failed, resulting in more cracking in 2011.

Duke spokeswoman Suzanne Grant said the utility has spent $338 million on repairs and $614 million to purchase replacement power.

Previously, William D. Johnson, Progress Energy's former CEO, had stated the utility would repair the damaged facility, projecting a $900-million to $1.3-billion fix. Duke Energy acquired Progress in 2011.

But last summer, Duke Energy raised suspicions that the issues at Crystal River were greater than previously announced, when its board abruptly fired Johnson—who had been slated to serve as the enlarged utility company's new CEO—less than 24 hours after the North Carolina Utilities Commission had approved the merger.

Johnson was named president and CEO of the Tennessee Valley Authority in November 2012.

In hearings held by the North Carolina commission in Raleigh, Rogers indicated that Johnson's handling of the Crystal River situation had been a factor in his dismissal.

Then, in late 2012, Duke published a report prepared by Charlotte, N.C.-based engineer Zapata Inc. that said repairing the idled plant could cost as much as $3.4 billion and carried the risk of additional cracking.

The utility's decision to retire Crystal River comes after it reached a settlement with industry insurer Nuclear Electric Insurance Ltd.

According to Duke, the insurer had paid the utility $305 million in coverage claims and, as a result of the agreement to close the plant, will pay another $530 million. Duke's Grant said the utility will use the funds to offset expenses and help lower customers' bills.

Duke says it plans to decommission the plant by using a method known as SAFSTOR, which would place the facility into a safe-storage configuration for a period of time. Under this plan, Grant said, final decommissioning of the plant would not occur until 40 to 60 years from now. Grant could not state how long the spent nuclear-fuel rods currently present at the plant would remain on-site.

Duke plans to pay for the plant's wind down from its fund for plant decommissioning, which Grant said currently totals roughly $600 million.

Last month, the North Carolina Waste Awareness and Reduction Network, an environmental and consumer watchdog group, filed notice with the state of North Carolina that it plans to file a lawsuit aimed at canceling or amending the Duke-Progress combination. In a release announcing the lawsuit, the group cites Crystal River as one of the "boondoggles" justifying its legal action.

However, Duke's decision to retire Crystal River won't stop the group from suing, says Executive Director Jim Warren.

Citing "mixed feelings," he adds, "I'm not happy to see Duke invest more heavily in natural gas. We need to be phasing out fossil fuels."

The problems at the Florida plant illustrate nuclear power's risks, adds Warren, whose group also is suing to stop the Plant Vogtle nuclear project in Georgia.

"Crystal River punctuates the fact that you can have a multibillion-dollar asset turn into a multibillion-dollar liability in a quick period," Warren says.

Grant said Duke is reviewing several sites for its future gas-fired plant, including some in Citrus County.