Did problems with the $1-billion, botched repair project at the Crystal River nuclear powerplant in Florida play a role in Duke Energy's ouster of its new CEO less than 24 hours after closing a $32-billion merger with Progress Energy?
That's just one of the questions the management at Duke Energy is finding itself facing from North Carolina regulators, former Progress Energy employees, and a growing throng of national news media.
Crystal River 3 plant in Citrus County, Fla. Photo courtesy Progress Energy Florida
The Tampa Bay Times has been reporting extensively on the problems at Progress Energy's Crystal River 3 nuclear plant in Florida. In a recent report on the surprise ouster of CEO Bill Johnson—whose role as CEO was required as a condition of the merger—the Times' Ivan Penn quoted Jim Warren, with a North Carolina group that opposed the merger, who speculated that a main reason must have been that Johnson understated the repair problems at the Florida nuclear plant.
The Times further cited a "secret study" conducted by Duke that allegedly revealed the repair issues at Crystal River were more troublesome than the utility's board may have known, indicating a perception that Johnson had not been as forthcoming as possible.
The problems began occurring at Crystal River in 2009. As ENR previously reported, Progress Energy was self-managing the replacement of steam generators at the Crystal River 3 plant when contractors began removing a 27-ft by 25-ft rectangle in the containment wall. A crack, or delamination, was detected in 2009, and a second one was discovered in early 2010.
In January 2012, the state of Florida and Progress Energy reached an agreement: the state would allow the utility to proceed with its repair plan, on the condition that it refund about $288 million to customers. At that time, Progress Energy's then-CEO Johnson said the latest engineering estimates indicated repairs could cost between $900 million and $1.3 billion. (The plant has been shut down since 2009, and the cost of purchasing replacement energy has been estimated at more than $1 billion.)
According to the Tampa Bay Times, the North Carolina Utilities Commission had opted not to listen to concerns about Crystal River prior to the merger. But the topic was definitely in the mix when Duke's new CEO, James Rogers, testified before the North Carolina Utility Commission on July 10. The state's attorney general is investigating the closing of the Duke-Progress merger—due mostly to Johnson's removal as CEO—and the commission is seeking to determine whether Duke officials misled the state during its pre-merger testimony.
In its report on Rogers' testimony to the commission, the Times quotes Chairman Edward Finley Jr., who says: "Obviously, Crystal River was discussed at great length today as the rationale for what they did."