UPDATE 2-Crystal River repair up to $1.3 bln, Progress says

Tue Jun 28, 2011 12:13am GMT
 

 * Repair has cost Progress about $214 million
 * Utility has spent $375 million on replacement power
 (Adds detail, company comment)
 HOUSTON, June 27 (Reuters) - Progress Energy Corp (PGN.N: Quote)
said on Monday that it will cost as much as $1.3 billion to
repair damage to the containment building wall at its troubled
Crystal River nuclear plant in Florida.
 The nuclear plant, which has been shut since 2009, is
expected to remain closed until 2014, the company told the
Florida Public Service Commission and the U.S. nuclear agency.
 Progress Energy's Florida unit, the state's second largest,
has been struggling to return the 838-megawatt reactor to
service after a gap was found in a section of the containment
building's 42-inch (107 cm) thick wall.
 The wall was opened in 2009 to allow contractors to remove
and replace the unit's steam generators, tasks originally
expected to take about three months.
 After that area was repaired, a second gap was discovered
in March in a different area of the containment building wall.
 "This would be a major repair, requiring significant
cooperation and coordination with state and federal regulators
and others," Vincent Dolan, Progress Energy Florida president,
said in a release.
 Progress said it considered shutting Crystal River, but
decided that fixing the wall would be the better option to save
customers money over the long-run.
 Dolan said the Crystal River nuclear plant is the utility's
least-cost resource to operate, saving customers $300 million a
year in fuel costs.
 So far, Progress Energy Florida said it has spent about
$214 million on the repair and $375 million to buy replacement
power to serve its 1.6 million customers, the utility said.
 The nuclear industry insurance fund has paid claims of $265
million during that period, including $103 million for repair
costs and $162 million for replacement power.
 Progress Energy said it is insured for up to $2.25 billion
per event and up to $490 million for replacement power, the
company said in a release.
 Progress, which is the target of a $13.7 billion
acquisition by Duke Energy Corp (DUK.N: Quote), said it will take a
pretax charge of $45 million in the second quarter to cover its
obligations for replacement power costs for the reactor's
minority owners, a group of public power agencies.
 Progress said outside engineering experts came up with 22
potential repair options. Its preferred repair calls for
systematically removing and replacing concrete in the
containment structure at a cost of between $900 million and
$1.3 billion.
 Progress officials will meet with state regulators next
month to discuss its plan in more detail.
 Progress determined that the initial gap was caused by the
process to release pressure on about 200 tendons. Such a gap,
or "delamination," has not been seen before at any other U.S.
nuclear plant, according to the U.S. Nuclear Regulatory
Commission.
 Depending on the repair Progress pursues, the utility may
have to amend its current NRC license. Nuclear fuel was removed
from the reactor in May and moved into the spent fuel pool.
 The 3,151-MW Crystal River station, located in Red Level,
Florida, about 85 miles (140 km) north of Tampa, includes four
coal units and the nuclear reactor.
 (Reporting by Anna Driver and Eileen O'Grady; Editing by
Robert MacMillan, Sofina Mirza-Reid and Bernard Orr)


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