Progress Energy Inc.’s (PGN) Florida subsidiary has informed state and federal regulators that its Crystal River Nuclear Plant will remain shut for repairs as they have discovered a new gap in the wall of the containment building last month. The company informed the Nuclear Regulatory Commission (NRC) and the Florida Public Service Commission (FPSC) that it will restart the plant only after complete review and repair of the defect.
Progress Energy said it is now conducting a thorough engineering analysis and review of the new separation, while also analyzing the options to bring the plant back to service. However, the company said that the exact time for reopening the plant cannot be ascertained at this time.
The new gap discovered in the wall of the nuclear plant’s containment building, in mid March, forced the company to suspend the restoration work at the plant. Progress Energy said it was in the final stages of completing the complex task of tightening structural cables, which would have brought an end to the already in force 18-month plant outage. Before discovering this new gap, Progress had planned to begin the restart process in April.
Progress Energy said the plant was actually shut down for refueling and maintenance in September 2009. When the work of refueling and replacement of steam generators was in progress, in late 2009, the contractors discovered a fissure in the wall of the containment building, which was opened to facilitate the replacement of the steam generators.
This further extended the plant outage, which was originally scheduled for a three month outage. The repair effort has forced the utility to buy a replacement power to serve its 1.6 million Florida customers.
Progress Energy said it has spent about $150 million on the repair work and about $290 million on replacement power costs as of year-end 2010. Of this, the company said the insurance company has paid nearly $64 million of the repair cost and about $171 million of the replacement costs.
Located near Crystal River, Florida, the 860 MW Crystal River Nuclear Plant has been an important asset in providing carbon-free, reliable power for decades to Progress Energy’s Florida customers. The plant has been operational since March 1977. Its current license expires in 2016. The company has filed for license renewal with the NRC in 2008, requesting an additional 20 years of operation.
Raleigh, North Carolina-based Progress Energy Inc. is an energy utility engaged in regulated electricity operations in the southeastern U.S. The company also has certain non-regulated businesses. Progress Energy is a holding company, comprising two electric utilities, serving 3.1 million customers in North Carolina, South Carolina and Florida. The company primarily competes with NextEra Energy Inc. (NEE) and Southern Company (SO).
Progress Energy Inc. currently retains a Zacks #3 Rank (short-term Hold rating). This supports our Neutral recommendation on the stock.
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